Automatic Pension Enrolment

Debate between Alan Brown and Rob Roberts

Wednesday 26th January 2022 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Dowd. Like everybody else, I congratulate the hon. Member for Grantham and Stamford (Gareth Davies) on securing the debate. There have been a number of Tory Back-Bench contributions; I was worried that I would end up agreeing with all of them, but I have managed to find a couple of aspects to disagree with—I am pleased about that.

I agree completely that auto-enrolment has been a success. The hon. Member for Grantham and Stamford set out well its history and success. I agree, too, with the principle of creating larger pots for investment in infrastructure. That is an age-old argument, but we never seem to get there; I agree that that needs to change. I am slightly concerned about the talk about pension savings funding housing deposits. I know that people want access to the housing market. However, I worry that, depending on how deposits are funded, that will not take the heat out of the housing market, but will actually increase it, because more people will be chasing a smaller pot of houses. We need more affordable houses as much as new ways to get people deposits.

The hon. Member for Grantham and Stamford made the interesting point that only 12% of job adverts advertise pension contributions. If we are talking about advice and people understanding the benefits of pension contributions, we need to look at that. The hon. Member for Strangford (Jim Shannon), who would have been surprised to have been called so early, further set out the success of the scheme, and talked about his personal experience and, importantly, education—that is clearly important for everybody. It was brave of the Minister, in the current climate, to intervene on the hon. Member for Strangford to talk about cake—fair play.

We heard from the hon. Members for Darlington (Peter Gibson), and for North Norfolk (Duncan Baker). It was very good to hear the employer’s and the director’s points of view. Both Members admitted that they had concerns, but they were pleased to see how successful automatic enrolment is. It is good to have that buy-in.

The hon. Member for Clwyd South (Simon Baynes) spoke about access to advice; I will come back to that, because I agree with him on that point. The hon. Member for Delyn (Rob Roberts) made a good point about complacency. We need to make sure that people understand that they might need to increase their contributions and pay more. That is very important, and it links to the point about getting proper advice.

Finally, we heard from the hon. Member for North West Durham (Mr Holden). I, too, congratulate him on his efforts in bringing forward his private Member’s Bill. He set out his stall really well on that day, as he did, briefly, today. His key point—that for every 50p somebody contributes, they get £1 in their pension pot—sums it up perfectly; it is a great illustration.

As we have heard, auto-enrolment has clearly been a good thing, and a success in getting way more people to save for their retirement. In fact, it has been so successful that we have to ask why it took so long to bring in such a scheme. The Association of British Insurers states that automatic enrolment has brought a further 10 million people into pension saving. As we have heard, 88% of eligible employees participated in their workplace pension in 2020, which is up from 55% in 2012. That is a fantastic step forward.

However, there are concerns that an estimated 12 million people are still under-saving for retirement, and that needs to be addressed. Given what we have heard today about the success of auto-enrolment, and given that the Government think it is important that people save for retirement and believe that auto-enrolment is a success, the Government should logically ensure that as many people as possible are eligible. That means implementing the recommendations of the 2017 review as soon as possible. During the passage of the Pension Schemes Bill, Labour and the SNP worked together to introduce amendments that would do that, so it was disappointing that the Government voted those down. The Minister did commit to implementing the recommendations of the 2017 review by the mid-2020s, but rejecting the amendments does not give confidence.

We know how unstable UK Governments have been in recent years, and now the Leader of the House is threatening us with another general election, so it seems to me—without being too flippant—that there is a risk, if action is not taken sooner rather than later to get legislation through the House, that matters could slip further. As I said, the hon. Member for North West Durham has his private Member’s Bill, which we would support. I am still concerned, though, that we are looking at the mid-2020s. If we agree that this change is so good, we need to look at bringing it forward and getting things moving much quicker.

[Rob Roberts]

The hon. Gentleman makes an excellent point about bringing forward measures, but if we make these changes, is it not really important to give businesses enough lead-in time to plan properly and budget for them, rather than springing a significant change on businesses?

[Alan Brown]

There is a point there, but we have heard from an employer and a finance director that their concerns were allayed once the scheme came in, so I think that there will be fewer concerns as we go forward. Speaking of giving employers notice, we need only think about national insurance contributions. That rise was introduced in a short space of time, so we should not be too concerned about how we phase this in. If we do not do it, more people will lose out, which defeats the purpose.

Everybody here agrees that we should lower the age threshold for auto-enrolment to below the age of 22. I have said that I would rather have 16 than 18 as the threshold. I would be content with a two-stage process on that; we could review the situation with regard to 18 to 21-year-olds, just to see how successful it was, and to check that they were not opting out, but in the long term we definitely need to move to 16-year-olds, who could be in full-time employment. We also need to look at removing the lower limit of the qualifying earnings band, so that contributions are payable from the first pound earned. As we have heard, its removal would benefit the low-income workers who otherwise would have little prospect of a decent private pension.

To repeat what other hon. Members have said, the issue is particularly acute for women, who are more likely to be lower paid, in part-time work and doing multiple jobs. We have a massive gender pensions gap. In a recent report, the Pensions Policy Institute found the following:

“Men have substantially more private pension wealth than women, with disparities increasing across age groups. For those aged 65-69, median pension wealth for men is just over £212,000 compared to just £35,000 for women…Divorced women’s pensions are much lower than divorced men’s.”

The Association of British Insurers states that the average pension pot for a woman aged 65 is one fifth of that of a 65-year-old man. Women receive £29,000 less in state pension than men over 20 years. The deficit is set to continue unless further action is taken. We also need to look at expanding the contribution rates beyond the 8% statutory minimum, to allow people to maximise their pot. That builds on what the hon. Member for Delyn was saying.

As I have said, further delays are unacceptable. I hope that the Minister will say that the UK Government will set a clear timetable for their plans for expanding automatic enrolment. Morally, they should do that, given that they have made other decisions that are affecting pensioners both in the here and now and in the long term. We have a cost-of-living crisis, and I note that Tory Back Benchers are now using it as a defence for keeping the Prime Minister in his place, even though the cost-of-living crisis happened on his watch. They are arguing that there is a cost-of-living crisis that warrants our attention, but they still voted through the removal of the triple lock in the November Budget, costing pensioners more than £500 this year alone and a cumulative £2,600 over the next five years. That cut comes despite the fact that UK pensions are already the least generous in north-west Europe in comparison with the average wage.

We have just had the report on the shocking state pension underpayments, and there are comments that the system for state pensions is not fit for purpose. We have seen 118,000 people underpaid as regards benefits. We still have the injustice faced by the WASPI women—Women Against State Pension Inequality—and there are very low take-up rates for pension credit, which the UK Government acknowledge is an issue, but have not remedied.

The SNP continues to demand that the UK Government introduce a proper take-up strategy for pension credit, as the Scottish Government have done for devolved benefits. We continue to call on the UK Government to establish an independent savings and pension commission to ensure that pension policies are fit for purpose and reflect the demographic needs of different parts of the UK.

Another aspect of auto-enrolment that needs to be addressed relates to the self-employed. We have heard about the massive increase in employees in defined contribution schemes, but the trajectory for the self-employed has been the polar opposite—for them, the numbers have gone down: 48% of the self-employed contributed to a private pension in 1998, but the figure went down to only 16% in 2018.

Another key point is about professional advice. It makes no sense for people to save for retirement, or for support for when they are older, but to remain at risk when accessing their pension pots. That important matter was covered by the Work and Pensions Committee in its report “Protecting pension savers”, published last week. I support the calls for the Government to set a goal of ensuring that at least 60% of people use the Government’s Pension Wise guidance service or receive paid-for advice. That is a key consideration.

Pension Wise has proven to be a success. We need to make sure that more people access it. There should be a trial of automatic Pension Wise appointments, in order to encourage more people to access advice that will benefit them. The UK Government should initiate two trials: one in which people automatically get an appointment when they access their pension for the first time, and another in which they get an appointment at age 50, before they access their pensions—a mid-life MOT, as it has been called.

Auto-enrolment has been a good measure, but it needs further action to make it even better, so that it can benefit millions more people. Action to implement the 2017 recommendations should be a priority. I hope the Minister will agree, and will say that they will bring legislation forward at the soonest opportunity.

Electricity

Debate between Alan Brown and Rob Roberts

Tuesday 27th April 2021 Commons Chamber

[Rob Roberts (Delyn) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak on this important motion today. I do so not only as the Member for Delyn but as the chair of the all-party group on fuel poverty and energy efficiency. The motion that we are debating is one of the biggest steps that we can take towards tackling fuel poverty in our country and, as seems to be the case throughout the House, I wholeheartedly support it.

Fuel poverty is one of the most pressing issues of the 21st century, so I am proud to see that this Government are committed to doing all they can to make sure that every household is able to afford to properly heat their home. While it is positive that fuel poverty rates have fallen in recent years—around 12% of households in Wales are now classed as fuel-poor—there is still much more to be done. But with definitions and methodologies being different in all four constituent parts of the UK, it is impossible to compare which measures have been most successful in driving down those rates. One of the things that my APPG will look into is whether we can get a UK-wide agreement on a single definition of fuel poverty, so that we can get a real understanding of the depth of the issue and the disparities between different parts of the country.

Although I am pleased to see the UK Government’s ambitious plans to tackle fuel poverty, whether that is through financial support or improving the energy efficiency of homes, as a Welsh MP, I find myself once again a little disappointed by the lack of action from the Labour Government in Wales. The Welsh Government have proved once again to be all talk and no action, with Welsh Labour setting targets to eradicate fuel poverty in Wales by 2010, then again by 2012, and then again by 2018. Sadly, they have failed to meet this target time and again, not even coming close. It is the most vulnerable households in Delyn and across Wales who will ultimately pay the price for those failings. However, with covid causing further strain on household finances, I am glad to see the UK Government go beyond setting arbitrary targets and look instead to provide real support and solutions for those who need them most. Schemes such as the warm home discount, which are available to households in Wales and throughout Britain, are more important than ever and are a lifeline for many over the winter months.

[Alan Brown]

I am sure the hon. Gentleman will accept that, if someone is fuel-poor, the reality is that they probably live in a household where they are poor anyway. They are living in poverty and one of the causes of poverty is the reduction in welfare and benefits, which is clearly reserved to Westminster. Does he acknowledge that that is a problem? Also, has his APPG looked at investment in energy efficiency in Scotland, where it is four times per capita that of Westminster?

[Rob Roberts]

I thank the hon. Gentleman for his intervention, which kind of highlights one of the issues that I mentioned, which is the disparity in the definitions of what fuel poverty actually means in each of the four constituent parts. I mentioned that 12% of households in Wales are classed as fuel-poor. Although I did not note it down, I believe that the percentage in Scotland was 24%, so I am not entirely sure that trumpeting the successes of the Scottish Government would be a good thing in that case.

Quite simply, with over 2.2 million low-income and vulnerable households in Britain benefiting from the scheme each year, it is the correct and best decision to extend it for a further 12 months, but increasing the overall spending target of the scheme to £354 million will see even more households able to access the support that they need. Following proper consultation, I also welcome the changes that the Government are bringing in, which will broaden the reach of the scheme and give energy companies more flexibility, making it easier for households to participate in the scheme.

From increasing consumer protection during boiler and central heating installation and repairs to removing the restriction on energy suppliers that prevents them from providing emergency support on top of the scheme, all these small changes will make a huge difference to those who benefit from it. Although there is room to improve the scheme, I am enthused to hear that the Government have considered the importance of the industry initiatives element when looking at the future of the scheme. But it is vital that we pass these regulations now; otherwise, millions of households who are struggling due to the pandemic would be put in an even more challenging situation. I agree with the hon. Member for Southampton, Test (Dr Whitehead), the Opposition Front Bencher, on seeking more long-term clarity, rather than continued short-term measures.

I thank everyone who has put in to speak today on this important matter and welcome them all to attend our next APPG meeting towards the end of May. We will continue to work with the Government and discuss ways to improve domestic energy efficiency, to achieve affordable warmth for all homes and to eventually and finally eradicate fuel poverty. Heating a home should never be a luxury; it is always a necessity. Today’s motion and ones like it recognise the need among the most vulnerable households in our communities and ensure that they can live comfortably, secure in the knowledge that they are able to get assistance in properly heating their homes. I hope that the measures are supported on both sides of the House.

United Kingdom Internal Market Bill

Debate between Alan Brown and Rob Roberts

Wednesday 16th September 2020 Commons Chamber

[Alan Brown]

Will the hon. Member give way?

[Rob Roberts]

I will not give way to the hon. Member, who has been on his feet longer than anybody, despite not being on the call list and not considering it important enough to put in to speak.

The amendments that have been tabled would prevent the Government from achieving their levelling-up agenda for the whole United Kingdom, as any Government spending decisions would potentially be held up by the devolved nations. Wales will not lose a single penny of EU funding when the transition period ends. If anything, this streamlined approach will ensure that together, we can tackle inequality and deprivation across the UK, with less money wasted on bureaucracy.

Not only does the Bill provide for greater unity and cohesion, but it gives unprecedented powers to all the devolved nations, with over 70 new policy areas previously held at EU level now coming direct to the devolved nations. Far from being a power grab, as Opposition Members are so keen to declare, the Bill offers greater support and funding to all parts of the United Kingdom. That is what this Bill should be about: directing funding and support to the right places to support jobs, businesses and livelihoods. Today’s amendments from the various Opposition parties do the opposite and are more concerned with playing political games with the Union than supporting the needs of people in Wales, Scotland and Northern Ireland. We are here for our people.

Communities in Delyn and across north Wales will greatly benefit from the new powers that the Bill sets out. With subsidy control now being a reserved matter for the UK Government, the EU will no longer be in charge of taxpayers’ money, and instead, the UK Government will be able to invest in areas that need it most. In 2013, the Welsh Government closed Flint hospital in my constituency to reduce costs in the north Wales health board, which still sits in special measures five years later, leaving the residents of Flint having to travel on sporadic and failing public transport to other facilities to visit their loved ones. Had this Bill been in place at that time, could it have helped the people of Flint to retain their vital community infrastructure?

The Labour-led Welsh Government continue to fail the people of Wales in policy areas that are wholly devolved, such as education. Despite increases in the Welsh block grant, funding for schools is still at the same level as it was in 2006. We need a strong Wales in a strong United Kingdom. The UK Government have the financial capability to support the Welsh Government in delivering for the people of Wales, creating more jobs and improving infrastructure by upgrading the A55 to motorway standard and delivering an M4 relief road, which the Welsh Government have so far failed to do.

While Labour may claim to be the party of the Union and to support the devolved nations’ interests, this UK Government will invest directly in Wales and support Welsh communities with the clauses in this Bill, which the Labour party have spent the last few days doing everything they can to stop, denying additional powers to the Senedd and additional funding to the people of Wales. By leaving the EU, this democratically elected Government will be able to provide the support that our communities need—the new financial support system that will ensure that Wales and UK priorities are taken into account and that there is not the focus that there was previously on the specific requirements of the EU. Decades of failed European priorities led to the people of Wales rejecting EU membership more than four years ago.

While Scottish nationalist party Members are ready to rejoin the EU at the drop of a hat, their entire position is to give the 70 powers that they are about to obtain straight back to the EU. They say that this Bill is destroying the Union. I might be misunderstanding their entire raison d’être, but if they believe that to be the case, I look forward to seeing them join us in the Lobby at each stage of the Bill to vote it through, because that would seem to accord with their greatest wish. The fact is that they oppose it because they know it does exactly the opposite. It enhances, it stabilises and it reinforces the Union of the United Kingdom, and I am proud to be a member of the Conservative and Unionist party supporting clauses 46 and 47 before the Committee today.