Pension Schemes Bill

Debate between Andrew Love and Stephen Timms

Tuesday 25th November 2014 Commons Chamber

[Stephen Timms]

We welcomed the new flexibility that is being provided. I hope the guidance that we are legislating for will deliver the improvement that the hon. Gentleman describes, but we cannot yet be confident that that will be the case. This brief debate gives us an opportunity to press the Minister to give us rather more reassurance about that. I shall refer to some of the comments of JustRetirement, one of the companies that the hon. Member for Reigate (Crispin Blunt) mentioned.

The most recent Association of British Insurers data show that overall annuity sales are down 14% from the second quarter of this year, and by 56% compared with the third quarter of last year. Consumers are presumably waiting until the reforms go live in April next year before deciding how to use their defined contribution pension savings. The same ABI data show external annuity sales—that is, annuities bought on the open market—down from 49% to 35% in the third quarter of this year. Internal annuity sales, where an annuity is bought from the incumbent pension provider, have increased from 51% to 65% in the same period. The overall share of enhanced annuity sales has fallen from 28% to 22%.

The ABI data highlight the risk of the kind of consumer detriment described in the article in The Daily Telegraph on Saturday. Together, they suggest that problems will continue unless the Financial Conduct Authority intervenes actively. Just Retirement makes the point particularly strongly and effectively that there is an urgent need for a second line of defence requirement for providers. What happens if the guidance on offer is not taken up? That is not provided for in the amendments.

Legal and General has highlighted the lesson from the pilot that it undertook with public support—that in practice the guidance on offer will very likely not be taken up. As the Minister knows, the take-up was very small—2.5%—in the pilot that it set up and supported. If that happens on a significant scale when these arrangements come into force next year, it opens up the possibility of very large-scale new consumer detriment. JustRetirement, along with others, is right to argue that by introducing a second line of defence requirement, the FCA can apply a crucial brake against this potential future consumer detriment by requiring providers to check consumers’ circumstances when they come to access their DC pension savings.

The hon. Member for Gloucester (Richard Graham) asked whether the guidance would take account of other financial assets beyond DC pension savings. That is a good question.

[Mr Love]

The Minister alluded to discussions taking place between the Department and the FCA, but the formal FCA position given earlier in the consideration of the Bill was that consumer take-up would be a matter of public choice, leaving it to the person concerned. With all the emerging evidence, surely we cannot be confident that that will answer the question.

[Stephen Timms]

I fear my hon. Friend is right. If in practice only a tiny proportion of people, or even a modest proportion, take up the guidance being offered, there is every chance of very serious problems in this market in the future. The House cannot be satisfied with that likelihood.

A number of organisations have pressed vigorously for a second line of defence requirement and they make a telling case. Proceeding without that safeguard will leave many consumers exposed—we should bear in mind that this is all supposed to happen from next April—making people guinea pigs and opening up the real possibility of another mis-selling scandal in the coming months.

2012 Olympics (Legacy)

Debate between Andrew Love and Stephen Timms

Tuesday 21st December 2010 Westminster Hall

[Stephen Timms (East Ham) (Lab)]

I am grateful to have secured this debate on the last possible occasion in 2010. I want to set out some concerns, on behalf of the community that I represent, about the legacy of the 2012 Olympics. My hon. Friend the Member for West Ham (Lyn Brown), in whose constituency the Olympic stadium is located, had wanted very much to attend the debate, but her Front-Bench commitments have kept her away. I am grateful that the Minister is here. I am conscious that I shall of necessity touch on some topics beyond his brief, and I am grateful for his willingness to respond.

The 2012 Olympics are a huge opportunity for London and for Britain—and in particular for the regeneration of east London. I am delighted that my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) is in the Chamber. She led our effort to secure the games for London, and the impact of her success will be etched on the economic geography of London for generations to come.

We are already seeing important benefits in east London. When the economy has been in poor shape in the past—for example during the period of cuts under the last Conservative Government in the 1980s—east London has been hammered. I am fearful about the impact on rising unemployment of the Government’s programme of cuts during the next four years. Last week’s unemployment figures have, I fear, given us a foretaste of what is to come.

In east London, however, we shall be buttressed to some extent by the fact that £9.2 billion is being invested in the Olympic games. Today, more than 900 residents of Newham, my borough, are working on the construction of the Olympic park and Olympic village, and there are 2,300 from the five Olympic host boroughs as a whole. I am pleased that the great majority are being paid at least the London living wage, and I particularly commend efforts such as those of Bovis BeOnsite and Newham council’s Workplace initiative with Jobcentre Plus, which have successfully targeted local unemployed people to work on the project.

A couple of weeks ago, I went to Westfield Stratford—the stunning retail development alongside the Olympic park, which will be the largest urban shopping centre in Europe when it opens next September, providing jobs for 12,000 full and part-time staff. At the moment, there are 70,000 jobs in the borough of Newham, so 12,000 new ones will be an enormous boost. The idea of that centre was around before the decision to bring the games to London, but given the form in which it has been realised and the speed at which it has been implemented, it is a very important element of the Olympic legacy. I vividly remember the dismay locally when Marks & Spencer pulled out of Stratford in the 1980s—[Interruption.] My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) remembers as well, so the return of Marks & Spencer to Newham when Westfield Stratford opens will be a welcome boost.

During the next year or two, it will be very important to ensure that people who live in the Olympic host boroughs enjoy their full share of the employment and other opportunities that are created. I shall mention just one idea that I have been talking about to people. Newham is home to people with roots in every country of the world. In too many cases, people are unable to find work. During the games, we shall be hosting visitors from literally every country in the world, and I hope that we shall be able to establish a location where people living locally can set up stalls for modest restaurant businesses to provide cooked food from their home countries, which would help to make visitors to the games feel welcome and create new jobs for local residents. I hope that we can establish that food court in good time for the games and that it can become a permanent feature of the area. There are a number of locations where it might be established.

I want to refer to a particular issue that will be addressed early in the new year: the future of the Olympic stadium. I was present last night, together with the Minister and my right hon. Friend the Member for Dulwich and West Norwood, at the ceremony to switch on the lights in the Olympic stadium for the first time. It was an opportunity to admire the splendour of the stadium now that all the seats have been fitted and to appreciate—it was certainly the first time that I had been able to do so—what an extremely impressive venue it is, even when it is covered in snow.

I support the proposal submitted by West Ham United football club, together with the London borough of Newham, for West Ham to take over the stadium after the games. For more than 100 years, since not long after the club was established—it emerged in 1900 from the Thames Ironworks football club—the club’s ground has been at Upton Park in East Ham, in my constituency, rather than in West Ham. Of course, if and when it moves, we in East Ham shall miss it, but I am convinced that that is the right solution. I appreciate that the Minister has no formal say in the matter, but I hope that he will agree that the West Ham solution is the right one for the Olympic stadium.

I shall suggest three reasons why the West Ham solution is right. First, it honours our obligations to the Olympic movement and fulfils the commitment to a strong sporting legacy, which was the basis on which the London bid was successful. Secondly, it offers the best opportunities to the community in east London in which the stadium is located. Thirdly, it is a financially robust bid based on a sound business case.

I shall start with our obligations to the Olympic movement. The Minister will have seen the recent open letter from Olympic and Paralympic medallists, with more than 40 games medals between them, calling for the retention of the athletics track in the stadium. West Ham is committed to retaining it to secure a national athletics centre; the alternative bidders, Spurs, would remove it.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does my right hon. Friend agree that although there has been some confusion about the athletics legacy, it clearly is the strong viewpoint of the athletics industry, the international Olympic movement and everyone associated with this venture that athletics will continue at the stadium?

[Stephen Timms]

My hon. Friend is right. That view is strongly held by the International Association of Athletics Federations and UK Athletics. Also, when the bid was submitted, a promise was made—it was a significant element of the bid—to retain athletics in the stadium beyond the games, and that promise will be broken if the track is removed. It is very important that we do not let that happen. My hon. Friend is right to underline how strong feelings about that subject are.

An open letter from the athletes sets out their position. They said:

“One of the most compelling aspects of our bid back in 2005 was the promise of an athletics legacy in the form of a world class stadium. This promise made the idea of legacy real. It showed that the Games would continue to touch the wider community long after the Olympics and Paralympic spectacular had left town.”

The letter was signed by a bevy of famous names, including Steve Cram, Tanni Grey-Thompson, Kelly Holmes and Daley Thompson. They are right—we should not break the promise that has been made. The provision of a world-class athletics track in the stadium after the games was one reason why the UK bid secured the crucial support ahead of the 2005 decision of Lamine Diack, the president of the International Association of Athletics Federations, and it is why the West Ham-Newham bid has the support of UK Athletics as well.

The proposal offers additional sporting benefits. It has the support of Essex county cricket club, which wants to be able to use the stadium, too. It will also be used for rugby. The bid is also being supported by Live Nation, the world’s biggest live events company, which describes the stadium as

“a superb venue for hosting major concerts and other events”.

Secondly, the bid represents the right solution for the local community, which is why the local authority is supporting it. The stadium will inspire learning and achievement, with thousands of local young people visiting each year to make use of its facilities. The university of East London and Newham college of further education will also have a role. The stadium’s legacy will include a studio school focused on sport and leisure, and the West Ham Playing for Success centre will relocate there.

West Ham has a thriving community sports trust involving 3,700 local people a week, and that will be strengthened further by a move to the Olympic stadium. Its training and mentoring scheme has produced 36 fully qualified coaches, all of whom were recruited from the borough. It has delivered PE at key stage 2 of the national curriculum to more than 50,000 pupils at the club’s Beckton training centre. The Minister has visited the centre, after which he rightly praised it for

“empowering young Londoners to take responsibility through sport and education”.

West Ham’s Asians in Football project engages with more than 36,000 youngsters a year and has been recognised and acknowledged by the Football Association as a national example of effective integration practice. Its multi-sports project delivers 14 sports in addition to football across the borough, and multi-sports coaching is provided to a wide range of people with disabilities. The British Heart Foundation recognises the men’s health project at West Ham for its engagement of men in a fitness and exercise programme.

There are discussions about using the stadium to widen cultural activities in Newham—the CREATE festival, arts development for local residents, and concerts and community music events—and it potentially has rehearsal space for local groups such as East London Dance. Such a full link to the local community would strengthen the potential for the health element of the proposals on the Olympic polyclinic. The bid’s success will boost jobs locally. Half the 1,000 hospitality and safety staff at Upton Park on a match day are from the local area, and that number is likely to grow if the bid is successful.

Equitable Life (Payments) Bill

Debate between Andrew Love and Stephen Timms

Tuesday 14th September 2010 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

We very much welcome the fact that the Bill is before the House, and we shall not oppose it today. We will want to table amendments to the Bill in Committee, and this afternoon I will set out those that we have in mind. I hope that they will be widely welcomed across the House and that the Government will feel able to accept them.

However, let me first respond to the Minister’s speech. I have not previously spoken in the House on the subject of Equitable Life, so I have been able to come at the issue fresh. Let me begin by acknowledging the extent of the hardship and anxiety that all too many people have endured as a result of the failure of Equitable Life and the long process since. I want also to associate myself with the expressions of apology already made by my right hon. Friends for the contributions to that failure of successive Governments. Unlike me, the Minister has made numerous speeches in the House and elsewhere on the subject—many of them made while in opposition—but he is now the Minister. He is now supposed to be making decisions. Today, as the Prime Minister likes to say, the rubber hits the road, but the Government seem more interested in the lay-by. They have not yet made those decisions. Four months after this Government were elected and almost two months after the publication of Sir John Chadwick’s report, Equitable Life savers are still no nearer to knowing what payments they will receive.

Indeed, things are worse than that. It appears that the Minister, now safely elected, proposes to do precisely the opposite of what he said before the election that he would do. Not just he, but every Treasury Minister, signed the pledge drawn up by the Equitable Members Action Group, whose indefatigable campaigning he was right to draw attention to, and which will have won the respect of every Member. The Prime Minister, the Deputy Prime Minister and the Chancellor all signed the pledge, which committed each signatory to

“vote to set up a swift, simple, transparent and fair payment scheme—independent of government—as recommended by the Parliamentary Ombudsman.”

The previous Government took the view, which I share, that there are practical problems with the ombudsman’s recommendation. That is why we commissioned Sir John Chadwick to advise on a practical scheme. However, for EMAG, the position is clear: the ombudsman is right, the Chadwick recommendations are not. That is the issue that the Minister has failed to resolve.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

My constituent Mr Peter Waller—not a Labour supporter—wrote to me following the statement made to the House previously to say:

“Already, the Coalition government…are…showing shameful disregard to us, after so many Conservative and Lib Dem members signed a pre-election statement that we would get fair justice.”

Does that not sum up what this Government have done?

[Stephen Timms]

My hon. Friend is absolutely right. EMAG today is very angry indeed. When the Prime Minister, the Deputy Prime Minister, the Chancellor, every Treasury Minister, and the great majority of Government Members signed that pledge, EMAG thought that they meant it. Over the next couple of months, the Ministers and their hon. Friends behind them are going to find a lot of their constituents saying exactly what my hon. Friend’s constituent said, and wanting to know why Government Members have reneged on their pledge. They will have a great deal of explaining to do.

--- Later in debate ---

[Stephen Timms]

The ombudsman has said that the Chadwick approach is no longer relevant because the Government have fully accepted her recommendation, yet the Government are saying that they accept that recommendation but that Chadwick is the building block for the future scheme. There is a fundamental contradiction in the Government’s policy.

[Mr Love]

If I were Brian Pomeroy or a member of the independent commission listening to today’s debate I would be confused, especially by the Minister’s contribution, because he is trying to support both the ombudsman’s report in principle and major parts of Chadwick’s report. What is absolutely clear from the debate so far is that the response from Front-Bench Members to all questions about what the compensation pot will be is that the needs of taxpayers must be taken into account. Does that not fundamentally contradict what they were saying before the election?

[Stephen Timms]

Yes, it does. Of course it is absolutely right that the needs of taxpayers must be considered, but Government Members signed the pledge that made no reference to that, which is why they have got themselves into such serious trouble.