Oral Answers to Questions

Richard Graham Excerpts

Monday 18th March 2024 Commons Chamber

[Richard Graham (Gloucester) (Con)]

What correlation does the Secretary of State see between children in poverty and workless families? Given that there is no age restriction on most apprenticeships, and today’s announcement that there will be 20,000 more apprenticeships and that the apprenticeship levy can be spent on greater numbers of contractors and sub-contractors, what opportunities does he see for his Department to highlight those opportunities for people who are of working age and who may have children in poverty?

[Mel Stride]

My hon. Friend refers to workless households. He is absolutely right about the correlation: a child is five time more likely to be in poverty if they are growing up in a workless household. He was right to draw attention to the announcement that has been made today about even greater investment in apprenticeships, and also the change in the way that the apprenticeship levy works so that supply chains can benefit to a greater degree.

Budget Resolutions

Richard Graham Excerpts

Thursday 7th March 2024 Commons Chamber

[Rachel Reeves]

It is interesting to have an intervention from the SNP, which is increasing taxes on ordinary working people—I would probably just stay on the Bench.

This is the only Parliament on record in which living standards are set to be lower at its end than at its beginning. The Chancellor chose to ignore all those realities, but the truth is that ordinary families cannot ignore them. As people up and down the country know, the definition of being better off is having more money. Under the Tories, people have less. People feel worse off because they are worse off.

Let us look at economic growth. Growth is critical for our success as a nation, for our living standards and for provide sustainable funding for public services, but the Tories have failed there, too. The context of yesterday’s Budget is a Prime Minister who pledged growth but has delivered recession. This economy is now smaller than when the Prime Minister took up office. Instead of bouncing back, the UK’s GDP is bumping along the bottom this year.

In his statement, the Chancellor rightly elevated the true measure of success:

“not just higher GDP, but higher GDP per head.”—[Official Report, 6 March 2024; Vol. 746, c. 837.]

I agree with him that that is the most important yardstick, so how are the Tories doing against that measure? The reality is that GDP per capita is set to shrink, not grow, this year, having shrunk and not grown last year, too. GDP per capita is now expected to be lower at the end of this year than it was at the start of this Parliament. Yesterday, we learned that forecast GDP-per-capita growth has been revised down for four of the next five years—hardly the success that the Chancellor was looking for.

The Chancellor said that it was important not to follow a path that relied on net migration to provide growth and GDP, and I agree. Has the Secretary of State for Work and Pensions seen the chart on page 29 of the Office for Budget Responsibility economic and fiscal outlook, which shows that net migration has been revised up by 350,000 over the next five years? That is the exact opposite of what the Chancellor spoke about.

Our country has gone through a difficult time over these past few years. The origins of many of the crises we have faced are global: pandemic, war, and the energy crisis. Other countries have also experienced those shocks, but each time crisis has hit, Britain has found itself acutely exposed because of the choices of successive Conservative Governments: austerity that choked off investment, then Brexit without a plan, and then the Tories crashed the economy with their kamikaze Budget.

This Tory record of economic failure has held our country back for far too long. If the UK economy had grown at the average of the OECD rate since 2010, when the Conservatives came to office, it would now be £140 billion bigger than it is today. That is equivalent to £5,000 per household every year, and would mean an additional £50 billion in tax revenues to invest in our public services. Growth matters, but the Tories are incapable of delivering it. [Interruption.] The hon. Member for Newcastle-under-Lyme (Aaron Bell) says from a sedentary position that we are doing better than the G7. There are only two G7 countries in recession today: us and Japan. That is the Conservatives’ record, and they should be ashamed of it.

This is the 12th Tory plan for growth in 14 years, and we are still in recession. Twelve plans from five Prime Ministers and seven Chancellors, with none of them succeeding. We are trapped in a Tory doom loop of low growth and high taxes, and it is working people who are paying the price.

[Richard Graham (Gloucester) (Con)]

I am struggling a bit with the right hon. Lady’s figures. My own calculations suggest that this year, pensioners will see an increase of £900 from an 8.2% increase in the state pension as a result of the triple lock. In all, I think, pensioners will be getting £3,700 more than they were in 2010. That is a huge increase in their income, alongside all the help with the cost of living and winter fuel, yet the right hon. Lady was saying earlier that pensioners are going to be worse off. I do not follow her maths; can she help?

[Rachel Reeves]

Those numbers about pensioners who pay tax are from the Resolution Foundation. They were published this morning, so the hon. Gentleman can also look at them, but it is a fact that because the tax thresholds have been frozen, pensioners who pay tax are paying more tax than they were before. That is the legacy of this Government. This is not just about lines on a graph. It is about our high streets, it is about whether businesses grow, and it is about whether we can create secure, well-paid jobs in all parts of the country, with more money in the pockets of working people, because if an economy does not work for working people, it does not work at all.

When the Tories are not pickpocketing the taxpayer, they are pickpocketing Labour policies. Having spent years defending the indefensible, the Tories have belatedly listened to Labour and recognised the importance of closing the non-dom tax loophole. I believe that if people make Britain their home, they should pay their taxes here too. The Office for Budget Responsibility says that the steady state amount of revenue raised by the non-dom policy is £3 billion per year. I first called for that loophole to be closed when it entered the public consciousness two years ago that some people were not paying their fair share of taxes, meaning that we have missed out of £6 billion in tax revenue—money that could have been invested in our public services.

If any further proof were needed that Labour is winning the battle of ideas, it is our time-limited windfall tax on the oil and gas producers. Having originally opposed the creation of such a tax, the Tories were dragged kicking and screaming by Labour to create an energy profits levy. Even after yesterday’s announcement of a one-year extension, the Tories are still leaving gaping loopholes, meaning that many energy giants will still pay less in tax. Meanwhile, the SNP opposes our proper windfall tax while, just three weeks ago, it put up taxes on working people in Scotland—on teachers, nurses, and plumbers.

Oral Answers to Questions

Richard Graham Excerpts

Monday 18th December 2023 Commons Chamber

[Mims Davies]

I thank the hon. Gentleman for raising this point. Our focus is on tackling poverty and making sure that work supports everyone across the UK. I am delighted to be coming to Northern Ireland fairly soon, when I will pick up those discussions further.

[Richard Graham (Gloucester) (Con)]

The great working city of Gloucester has a high employment rate, but we still have some people who could help to fill vacancies in both city and county. So the Gloucester opportunities fair on 23 February provides a great opportunity not just for all my constituents, including to get free advice on debt, volunteering and benefits, but perhaps for the new Employment Minister, whom I welcome to her place, to come to join us in celebrating the availability in Gloucester and the support for those working there.

[Jo Churchill]

If my diary allows, I would be delighted to join my hon. Friend.

Work Capability Assessment Consultation

Richard Graham Excerpts

Tuesday 5th September 2023 Commons Chamber

[Mel Stride]

Nothing in the consultation excludes bringing forward exactly the point that the hon. Lady makes. I hope she will do just that, and encourage others to do so as well.

[Richard Graham (Gloucester) (Con)]

The Secretary of State is quite right to refer to the 2 million additional people with disabilities who have come into work since 2010. He will recall that the first Disability Confident event, held in 2013, was in Gloucester. His Department worked closely with charities and employers to ensure that more opportunities happened. I have met many people who benefited from that programme, so I support him in the principle. Can he confirm that he will engage closely with charities and organisation such as Seetec Pluss, which has a lot of experience in helping to bring people with disabilities back into the workplace?

[Mel Stride]

I thank my hon. Friend for all the passion and intelligence he brings to these issues. I can confirm that our door will be open to Seetec Pluss. In fact, I will go further and make sure that our officials reach out to my hon. Friend to ensure that that happens.

Social Security and Pensions

Richard Graham Excerpts

Monday 6th February 2023 Commons Chamber

[Ms Buck]

I could not agree more. The Labour Government demonstrated what could be done with will, policy and investment; they brought about a dramatic reduction in pensioner poverty and child poverty. A future Labour Government will do exactly the same. Of course we will support the motion, but the Government deserve no praise—

[Richard Graham (Gloucester) (Con)]

Will the hon. Lady give way?

[Ms Buck]

I have given away enough for the moment. The Government deserve no praise for refraining from a deliberate action that they should never have contemplated taking in the first place.

It is important to recognise the limitations to the uprating order. Although the nominal value of most working-age benefits will increase by 10.1%, there will be no change to the eligible cost limits of two crucial benefits: the childcare element of universal credit and tax credits, and the local housing allowance. Do the Government think that childcare and housing costs are immune to inflation? How does allowing the erosion of the value of childcare support fit with their stated aims of encouraging work progression and helping working parents to increase their hours of work?

Yesterday, the deputy political editor of The Sunday Times reported that:

“Sunak and Hunt want a new benefits crackdown, including”

increasing the

“threshold under which people must attend regular job centre interviews/meet work coaches to be raised to 18 hours”.

If the Government are serious about helping parents to progress, they should ensure that parents are better off working more hours, rather than using the crude and unproven instruments of conditionality. As the IFS has shown, parents in the lower thirds of the earning distribution already stand to lose 58% of their additional earnings when moving from 20 to 40 hours of work a week.

Incentives to progress are already weak, so allowing inflation to erode the value of childcare support makes absolutely no sense. As evidence to the Work and Pensions Committee stated recently,

“The childcare support provided with UC is only sufficient to cover part-time hours, because the cap it is subject to has been frozen for six years”,

and

“A fixed cap amid rising childcare costs means fewer hours are eligible for reimbursement under UC today compared to Working Tax Credit in 2005—potentially restricting parents’ employment options.”

While I am on the subject, we hardly need reminding that the requirement for parents who claim childcare support to pay up front heaps the burden on to low-income parents, and contributes to the nightmare of overpayments and deductions, which contribute to the debt and destitution crisis.

The local housing allowance remains frozen for the third year in a row—at least, that is how everybody apart from the Secretary of State sees it. He said in his written statement of 17 November:

“I can also confirm that the local housing allowance rates for 2023-24 will be maintained in cash terms at the elevated rates agreed for 2020-21.”—[Official Report, 17 November 2022; Vol. 722, c. 24WS.]

Perhaps the Minister can explain how those rates, which are based simply on the 30th percentile of local rents in 2019—since when rents have risen by 8% overall according to the Institute for Fiscal Studies, and vastly more in some parts of the country—can seriously be described as elevated.

[Ms Buck]

It is absolutely impossible. Rents are such a major component of people’s expenditure. For that shortfall to first be fixed, and then to grow, is inexplicable. It absolutely eats into people’s residual income.

Nearly 1.5 million universal credit households receive the housing allowance. Of those, 844,000, or 58%, have rents above the maximum that local housing allowance will support. On average, they face a shortfall of £100 a month, which has to come out of their residual income.

[Richard Graham]

I am grateful to the hon. Lady, with whom I served on the Work and Pensions Committee a long time ago, for giving way. Have this Government not increased benefits by more than inflation, which is something that Labour never did in the 13 years it was in power? Secondly, will those on universal credit not be £1,000 better off as a result of the further reduction of the taper in the universal credit system, which she and the right hon. Member for East Ham (Sir Stephen Timms) continue to insist should be scrapped completely? Where does she think the social justice is in her party’s proposals?

[Ms Buck]

The fact of the matter is that poverty is rising —pensioner poverty is rising, child poverty is rising, and the local housing allowance and the childcare element are not keeping up with costs. That is simply a fact.

Oral Answers to Questions

Richard Graham Excerpts

Monday 23rd January 2023 Commons Chamber

[Laura Trott]

As the hon. Lady knows, the ombudsman’s investigation is ongoing, so unfortunately I cannot comment further—other than what is in the public domain—at this stage.

[Richard Graham (Gloucester) (Con)]

Of course, the other side of the coin, whether for females or males, is to not leave the workplace too soon. Will my hon. Friend therefore support my initiative to work with our excellent Gloucester Jobcentre Plus in holding an event specifically for the over-50s, both females and males, to see what opportunities our local employers can come forward with? Would one of the Ministers perhaps join me there to support that initiative?

[Laura Trott]

My hon. Friend does sterling work in his constituency. [Interruption.] The Minister for Employment, my hon. Friend the Member for Hexham (Guy Opperman), has just indicated that he would be delighted to join my hon. Friend in Gloucester.

State Pension Triple Lock

Richard Graham Excerpts

Tuesday 8th November 2022 Commons Chamber

[Mel Stride]

I thank the hon. Lady for that clarification and I accept the point she makes. I would be happy for the Minister for Pensions to meet her to discuss the issue she has raised.

[Richard Graham (Gloucester) (Con)]

The key point my right hon. Friend is stressing is that a huge amount has been done consistently by this Government to help pensioners since 2011—innovations that the Opposition opposed at the time or certainly did not come up with, including benefits for women who can claim pension years when they were bringing up children, and auto-enrolment with 20 million new people. I hope that the one-off payment my right hon. Friend just alluded to will be valid for a bit longer, and there is the increase of £3,200 per pensioner on the state pension alone. Does my right hon. Friend agree that today’s debate is largely designed for the Opposition, and about the shadow Minister who was behind the 1999 75p increase—[Interruption.]—trying to park his tanks—

[Mr Speaker]

Order. Mr Graham, when I stand up I expect you to sit down and not carry on your speech. Do we understand each other about the rules of this House?

[Richard Graham]

We do.

[Mr Speaker]

Right. So in future please sit down.

--- Later in debate ---

[Richard Graham (Gloucester) (Con)]

What a treat to be the tail-end Charlie on the Government Benches, and it is a pleasure to follow the hon. Member for Barnsley East (Stephanie Peacock) and the very thoughtful speech from the hon. Member for North East Fife (Wendy Chamberlain), which shows that on the substance of the policy we all hope to hear announced on 17 November, there are few differences among the Members of different parties in this House. It is worthwhile, particularly with my hon. Friend the Member for Sevenoaks (Laura Trott) in her place—I warmly welcome her as the new Pensions Minister, and earlier she was sat beside the former long-serving Pensions Minister, my hon. Friend the Member for Hexham (Guy Opperman)—just to run through how and why we are where we are.

The truth is that the story starts in December 2010, five months after the coalition Government were elected to take over from the previous Labour Government of some 13 years. The then Pensions Minister, the former right hon. Member for Thornbury and Yate, Sir Steve Webb, introduced it by pointing out that the first thing he was doing was reintroducing the link between the state pension and earnings—something that Labour had unfortunately failed to do during its 13 years in government. It was wrong to do so, and he was right to reintroduce it, but he went further, with the full support of the coalition parties, and linked pensions to a new triple lock of earnings growth, inflation or a minimum of 2.5%. That promise was part of ensuring that we would never again see a weekly rise in pensions of just 75p, which has been much alluded to today. No one should ever underestimate the impact that that had on pensioners around the country.

[Ruth Jones (Newport West) (Lab)]

Can the hon. Member confirm that the triple lock was introduced as the result of a commission that was appointed by Gordon Brown, and Gordon Brown was the one who set up the reasoning behind and the institution of the triple lock, but it was the Government after him who actually introduced it?

[Richard Graham]

No; I am sorry, but that is a historical rewriting of facts that does not wash. Gordon Brown was Chancellor and then Prime Minister for all those 13 years. He had many, many opportunities to reintroduce the link to earnings and spectacularly failed to do so. With apologies to the hon. Member, I do not accept that. It is true that a lot of consultation went on at that time, but the fact is that the coalition Government reintroduced the link five months after coming into government. That is important, because the link is responsible for today’s state pension being worth over £720 a year more than inflation, which was the link under Labour. The whole point of the triple lock was that Labour’s policy was inadequate and had to be corrected by the new coalition Government.

Indeed, on 17 February 2011, at the first social security benefit uprating after the triple lock was introduced—the hon. Member for Newport West (Ruth Jones) will be interested in this—what did Labour Members do? They abstained—all of them except for 11, who voted against the uprating. Those who voted against included the right hon. Member for Hayes and Harlington (John McDonnell), who was shadow Chancellor at the time of the last Labour manifesto. Not one Labour Member, including the right hon. Member for Leicester South (Jonathan Ashworth), voted in favour of the uprating that came from the triple lock. They were wrong not to do so.

There was, of course, more to it, because the basic state pension has risen considerably, and as Sir Steve Webb put it then, the strengthening of pension credit enabled the Government to

“focus resources on the poorest pensioners.”—[Official Report, 8 December 2010; Vol. 520, c. 310.]

As he pointed out at that time, when both you and I were here, Madam Deputy Speaker, this is ultimately about

“a more appropriate, consistent and stable basis that is fair to individuals and the taxpayer.”—[Official Report, 8 December 2010; Vol. 520, c. 311.]

We come to the issue today. The Prime Minister and the Chancellor have both highlighted that in their decisions to be announced on 17 November, they will act fairly and compassionately. I have no doubt that they will, and for the avoidance of doubt, that does imply, to me, maintaining the triple lock—no Minister can possibly anticipate what might be announced in the future, as my right hon. Friend the Secretary of State rightly explained.

Over the last 12 years, the record of this Government is that they have introduced the triple lock and the important new policy of auto-enrolment for almost 20 million people, whereas Labour’s legacy is the 75p a week increase. That was not done while the right hon. Member for Leicester South was an adviser to Gordon Brown, but he has two more issues to face when the announcements of 17 November are made. In the Labour party’s 2019 manifesto, it committed to £58 billion for the Women Against State Pension Inequality Campaign group. I have warned that group time and again that it will be led up the path and nothing will be delivered. The shadow Secretary of State needs to answer on that, and he also needs to answer on what Labour’s policy will be on universal credit, which it pledged to abolish in its 2019 manifesto. For today, I agree: let us keep the triple lock.

Pensions Dashboards (Prohibition of Indemnification) Bill

Richard Graham Excerpts

Committee stage
Wednesday 26th October 2022 Public Bill Committees

[Mary Robinson (Cheadle) (Con)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I am grateful to you and to Committee members for joining me to look at the detail of the Bill. I am particularly pleased to be joined this morning on the Committee by my hon. Friend the Member for Hexham, who in his many years as Pensions Minister played a pivotal role in the introduction of the pensions dashboard, and has supported the Bill from its inception.

This is a simple Bill with just two clauses, but its purpose is to safeguard the interests of pension savers, which I think we can all agree is an important and worthy cause. The need for the Bill arises from the fact that there is currently nothing in legislation backed by a criminal sanction that specifically prohibits rogue trustees or managers from using a pension scheme’s assets to reimburse themselves and to repay civil penalties that they incur for breaches of pensions dashboard legislation. The Bill addresses that problem. It is welcome to have not just Government support for the Bill but, I hope, support from Members on both sides of the Committee. I noted that on Second Reading the hon. Member for Westminster North (Ms Buck) said:

“It should never be the case that mistakes, failures or a lack of action to meet legal requirements on the part of trustees should land with scheme members.”—[Official Report, 15 July 2022; Vol. 718, c. 659.]

I agree wholeheartedly with that point, which explains in a nutshell why I introduced the Bill.

Before going on to the specific detail of the Bill, it is worth briefly recapping some of the broader context about what pensions dashboards are, and the work that the Government are doing to make them a reality. Pensions dashboards are an electronic communication service that will allow individuals to see their pensions information, including the state pension, in one place online. With the continued success of automatic enrolment, millions more are saving for their retirement, and so may have multiple pension pots with no easy way of keeping track of them. Dashboards will help individuals to be reunited with lost and forgotten pensions. They will also support people in better planning for their retirement, making it possible for people to review their pensions savings online in the same way that people might currently view their bank accounts, whether on their phone or laptop at home.

There will be an online dashboard provided by the Money and Pensions Service. Additionally, to help to cater for the varied needs of the millions of people with pensions savings, it will also be possible for other organisations to provide dashboard services. Those organisations will be regulated by the Financial Conduct Authority, which will soon consult on a regulatory framework and rules for pensions dashboard operators. Individuals will see the same information regardless of which dashboard they use.

Importantly, the technology behind pensions dashboards has been designed with the security of data at its heart. Crucially, pensions information is not stored in any central database. It will continue to be held only by the pensions schemes themselves or by a third party administering the data on their behalf, and will be displayed only at the request of the individual. Individuals will always have control over who has access to their data and will be able to revoke access at any time.

I know that the Government are committed to ensuring that pensions dashboards become a reality as soon as possible. Even since I spoke on Second Reading of the Bill in July, much progress has been made. Only last week, the Pensions Dashboards Regulations 2022 were laid before Parliament and will be the subject of affirmative debates in due course. That is a huge milestone, because those regulations will require trustees and managers of occupational pension schemes to connect their schemes to the pensions dashboards digital architecture and provide information on request. I understand that the Financial Conduct Authority expects to confirm the final rules for personal and stakeholder pensions in the near future.

In the event of non-compliance with any of the requirements in part 3 of the Pensions Dashboards Regulations, the Pensions Regulator may, at their discretion, issue compliance notices, third party compliance notices and penalty notices. If the regulator chooses to issue a financial penalty, that can be up to a maximum of £5,000 in the case of an individual or up to £50,000 in other cases, such as corporate trustees.

That brings me neatly back to the contents of the Bill. Despite amounting to just two short subsections, clause 1 provides the real substance of the Bill. Committee members will see that subsection (1) simply adds section 238G of the Pensions Act 2004 to the list of statutory provisions in section 256(1)(b) of that Act. Section 256 of the Pensions Act 2004 prohibits any amount being paid out of the assets of an occupational or personal pension scheme for the purpose of reimbursing, or providing for the reimbursement of, any trustee or manager of the scheme in respect of a penalty they are required to pay under specific pensions legislation.

[Richard Graham (Gloucester) (Con)]

There may be some people listening to this debate who are unpaid trustees of pension funds and are concerned that these provisions will give them a huge potential liability. Will my hon. Friend confirm that many pension schemes have indemnity policies arranged through insurance companies, which will prevent that from happening, and this legislation will enforce the obligation on managers and trustees to ensure that the pensions dashboard is implemented?

[Mary Robinson]

I am grateful to my hon. Friend for making that point, because he is exactly right. It is worth reinforcing that we know that the overwhelming majority of people who take on the role of trustee want to do the best thing in the right way. This legislation reflects what is already in law, to ensure that financial penalties cannot be reimbursed from pension funds. It is important that we protect those savers’ pension pots.

Section 238 of the Pensions Act 2004 relates to the compliance provisions for pensions dashboards. The Bill extends an existing prohibition set out in section 256 of the Pensions Act to include penalties under the compliance provisions in the Pensions Dashboards Regulations and future regulations made under section 238G of the 2004 Act. As a result, if a trustee or a manager were to be reimbursed out of the assets of a pension scheme for a penalty issued under the Pensions Dashboards Regulations and knew or had reasonable grounds to believe they had been so reimbursed, they would be guilty of an offence, unless they had taken all reasonable steps to ensure that they were not so reimbursed, as I have said—that is so important that it was worth saying twice. On successful prosecution, that person would be liable to receive a sentence of up to two years in prison or a fine or both. Additionally, were any amount to be paid out of the scheme’s assets in contravention of this provision, the Pensions Regulator would have the power to issue civil penalties to any trustee or manager who failed to take reasonable steps to secure compliance.

Clause 1(2) makes a similar amendment to article 233 of the Pensions (Northern Ireland) Order 2005, essentially replicating the change that I have just described, so that the same prohibition on reimbursement using the assets of a pension scheme would also apply in Northern Ireland. It is entirely sensible to ensure that relevant pension members across the whole of the United Kingdom can benefit from the safeguards that the Bill provides.

Clause 2 sets out vital but standard information on how clause 1 is to be brought into legal effect, and the territorial extent of the two subsections in clause 1. The Bill has been drafted so that its respective protections extend to England, Wales and Scotland by virtue of amendments to the Pensions Act 2004, and to Northern Ireland by virtue of amendments to parallel legislation in Northern Ireland.

On commencement, clause 2 allows the Secretary of State to make regulations by statutory instrument to appoint a day for commencement in England, Wales and Scotland. It also enables the Department for Communities in Northern Ireland to make an order, by statutory rule, to appoint a day for commencement in Northern Ireland. That provides flexibility for the provisions to be brought into force at an appropriate time.

This is an important measure that will safeguard the interests of pension savers from any would-be unscrupulous trustees. On Second Reading, the Bill received cross-party support, and I hope it will continue to do so today.

--- Later in debate ---

[Maggie Throup (Erewash) (Con)]

I congratulate my hon. Friend the Member for Cheadle on successfully navigating this short but important Bill to Committee. I should start by declaring an interest: I am one of the few people in this room likely to benefit from the Bill sooner rather than later. [Laughter.] I know that does not seem likely, but there we are.

This is a simple Bill that strengthens the pensions dashboard regulations. I will focus on clause 1, which I fully support. When the pensions dashboard regulations come into force, the pensions regulator may take enforcement action, which could include a financial penalty, if a trustee or manager of an occupational pension scheme fails to comply with the regulations. When that occurs, there is nothing in legislation to prevent them from reimbursing themselves from the assets of the pension scheme.

The provisions in the Bill will make it a criminal offence for pension scheme trustees or managers to reimburse themselves using the assets of the pension scheme in respect of the penalties imposed under dashboard regulations. It achieves that by amending section 256(1)(b) of the Pensions Act 2004. I am sure that we have all had surgery cases where constituents feel, for a variety of reasons, that they are not getting their expected pension due to inappropriate use of funds. I am sure that this Bill will go a long way to addressing those concerns.

The part of the explanatory notes detailing the impact assessment quite rightly indicates that there may be some indirect benefits of the Bill, as it should help to reassure pension savers that protections are in place to deter unscrupulous trustees or managers, therefore providing greater confidence to save for a pension, protecting our financial futures. In conclusion, I am sure that my Erewash residents will welcome the measures in the Bill, so I am delighted to support clauses 1 and 2 as they stand.

[Richard Graham]

As a trustee of the parliamentary pension scheme, I should declare a relevant interest. Today is a great moment to congratulate two colleagues. The work on creating the pensions dashboard was done by my hon. Friend the Member for Hexham. I think we all recognise what a great job he did on that as Parliament’s longest-serving pensions Minister. It is also right that we all congratulate my hon. Friend the Member for Cheadle, who has taken this forward, building on the work done by my hon. Friend the Member for Hexham, to create surely one of the shortest and least contentious Bills that this House has ever had to deal with. I am sure that the Minister will say something similar in due course.

Ensuring that trustees and managers do not effectively raid a pension fund, other people’s assets, effectively, to deal with their own errors—advertent or inadvertent; as my hon. Friend the Member for Cheadle said, most instances will be inadvertent—is absolutely right and proper. This just sensibly fills a gap. The business of insurance indemnification for trustees against inadvertent mistakes will also be reassuring to those who volunteer as trustees almost always completely free of charge. On that basis, there is a huge amount to appreciate and support in this short Bill.

Pension Schemes Bill [Lords]

Richard Graham Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Monday 16th November 2020 Commons Chamber

[Richard Graham (Gloucester) (Con)]

This is an important point and the Minister will know that there are open schemes with considerable assets which could be deployed to the advantage of this nation in investing in means of growth for the future. Where they are funded, being open, it gives them a huge advantage and of course the current situation on bond yields makes it even less helpful for them purely to invest in gilts and so on. So I strongly support what the hon. Lady is saying. Does she agree that it would be helpful if the Minister could refer to this again in winding up?

[Wendy Chamberlain]

I thank the hon. Gentleman for his endorsement of my remarks. I hope the Minister will comment on this in winding up.

Open and closed schemes are on a continuum. A scheme opens, it matures, it becomes closed, it reaches the absolute end of the range of maturity, and the risk profile varies with that maturity. However, parts of the consultation document do not seem to recognise this, which is concerning. There is an understandable desire from employers and employees for this to be clarified. There is real concern that the regulator wants open schemes to be considered as if they were on the brink of forced closure, but that means effectively crystallising their investment structure into a closed structure and preventing them from acting as they need to, as the hon. Gentleman suggested. So I ask the Minister to recommit to the House that this will not happen, otherwise our concerns will remain, and Baroness Bowles and her colleagues in the Lords will continue to press the Government on this when amendments return to the other place.

There is a huge risk to getting this wrong. Members highlighted on Second Reading the issue of railway pensions. Their campaigning has been very important in raising the potential impact of this Bill on defined-benefit schemes. I also want to highlight the charitable sector and many large charities that rely on DB schemes: Oxfam, Age UK, Cancer Research, the National Trust and the Royal National Lifeboat Institution, to name but a few. My amendment 6 would require the Government to carry out an economic impact assessment on the effect of changes to DB schemes on that important sector. We have already heard that open schemes will end up with deficits of £120 billion to £160 billion if they are treated in the same way as closed schemes.

6.15 pm

We are in the midst of a pandemic and huge economic shocks, the impact of which we cannot fully predict at this time. Is now the time to saddle companies and charities with that extra debt, and for what purpose? What of individual savers themselves? Can we reasonably expect people potentially to double their personal contributions? Surely a more likely outcome from that requirement is that people will simply cease to contribute, and that will apply further pressure to the viability of that scheme.

There is a real danger that as a result of the deficits, charities—some of which I have mentioned—will go bust, and that is not a policy that any Government should be promoting, particularly given the support that the Government have put into the sector during the course of the pandemic. That would surely be a bad policy at any time. As I said earlier, I am encouraged by the Minister’s statements in Committee, and I thank him for recommitting to those in his intervention, but I hope he appreciates that we urgently need further reassurances. I do not see why such provision could not be made in the Bill, as indeed it was when it came from the other place. It would make sure that the regulator was acting in a sensible way. I look forward to hearing the Minister’s response.

My first contribution when taking on the role of DWP spokesperson for my party was on ensuring the triple lock for the state pension. In that debate, I highlighted the need to ensure a sustainable state pension, particularly given the intergenerational divide emerging for young people in this country. We should not, through this Bill, be potentially driving more people into reliance on the state pension by making personal pension provision unaffordable for individuals or institutions.

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[Gareth Davies]

I am grateful to the Minister for his generous remarks and I thank him for his support of my campaign to bring about green gilts in this country. I agree that it is a way in which pension funds can contribute to the climate change effort in a meaningful way, moving billions of pounds of capital towards the goals that everybody across this House really wants to achieve, so I thank him for that intervention.

Finally, I fear that, although the amendment is well-intentioned, it is poorly focused. In my experience, trustees want to invest with purpose and according to their values. Likewise, fund managers have, over the past several years, moved great mountains, a lot of money and a lot of effort to incorporate ESG risk into most of their investment processes, and I do not believe that any asset manager in the future will be able to survive unless they integrate ESG climate risk as part of their investment process.

[Richard Graham]

As a trustee of the parliamentary pension fund, may I highlight that the changes on page 118 of the Bill on climate change risk are incredibly important and will help encourage trustees and pension funds in general to make investments that are pro-environment, pro-green and pro-climate change? I am absolutely in agreement with my hon. Friend that the proposed additional new clause 16, which would require pension funds to align with the Paris agreement goal, is a step too far. Does he agree that the Minister should focus on that in his summing up as well?

[Gareth Davies]

I am very grateful to my hon. Friend for his intervention. I agree that the Bill is sufficient in its current form to be able to achieve what we all want to achieve, which is to get pension funds to invest in a climate-aware way.

The last point that I will make in concluding is around this point on focus. In my experience, it is not the fund managers or the trustees whom we need to persuade or to make do anything, but the middle men and women—the gatekeepers, the investment consultants —who typically require a five-year track record and £100 million in assets held by fund managers and managed by fund managers. In my experience, that was always the issue. We were running money in a way that was really pushing things forward in terms of our climate targets. We knew that the pension clients really wanted to invest with us, but, because we could not meet the requirements of the investment consultants, we could not marry the two together. If we use the combined intellect, passion and energy of this House, from all parties, to come up with a solution to that, we could make great progress.

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[Richard Graham]

The hon. Gentleman is making a point that a number of us made earlier. I notice that in the Committee, on which the hon. Gentleman served, the Minister responded pretty clearly by saying:

“Open schemes with a strong sponsoring employer that are immature and have managed their risk appropriately should not be forced into an inappropriate de-risking journey.”––[Official Report, Pension Schemes Bill [Lords] Public Bill Committee, 5 November 2020; c. 80.]

I found that quite reassuring; what does the hon. Gentleman think?

[Neil Gray]

I was just coming on to quote that very passage from the Minister in Committee—

Oral Answers to Questions

Richard Graham Excerpts

Monday 11th May 2020 Commons Chamber

[Richard Graham (Gloucester) (Con)]

What recent assessment she has made of the effectiveness of the operation of universal credit.

[The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince) [V]]

Since mid-March, we have processed around 2 million universal credit claims. Despite that surge, the system is standing up to the challenge and demonstrating that resilience is part of its design, with over 90% of new eligible claimants expected to be paid in full and on time. There is no way that the legacy benefit system would have been able to cope with such pressure.

[Richard Graham [V]]

I am grateful to all the jobcentres, and particularly the one in Gloucester, which has done a remarkable job of registering so many of my constituents. Some people discover when they register that they lose child tax credit before any new benefits are payable. What can my hon. Friend the Minister do to help provide our constituents with better tools to assess what will happen and whether they will be better or worse off when they first register for universal credit?

[Will Quince [V]]

I thank my hon. Friend for his question and for rightly praising DWP staff for the work they are doing. That issue has been raised by a number of colleagues, and I am looking at data and exploring options. We have been working closely with Her Majesty’s Revenue and Customs to encourage people to check their eligibility before making a claim and ensure that tax credit claimants understand that when they have claimed UC, their tax credits will end, and they cannot return to legacy benefits.