Pension Schemes Bill [HL]

Baroness Janke Excerpts

2nd reading & 2nd reading (Hansard): House of Lords & 2nd reading (Hansard)
Tuesday 28th January 2020 Lords Chamber

[Baroness Janke (LD)]

My Lords, the three strands of the Bill contain proposals that have been broadly welcomed across the sector and across this Chamber.

My noble friend Lord Sharkey spoke about secondary legislation and Henry VIII powers, on which large parts of the Bill are dependent. As other noble Lords have said, in this House we are suspicious of such measures. We are reluctant to delay this long-awaited Bill, but we would like assurances from the Minister that the substance of measures not included on the face of the Bill, if not the actual letter of the legislation, will be made available to us in good time. As my noble friend Lord Sharkey said, this is a skeleton Bill with random use of affirmative and negative procedures. I thank the Minister for her recognition of these issues and very much hope that the illustrative regulations she spoke about will be substantive and informative.

CDCs—collective defined contribution schemes—have been supported across the parties, and the provisions in the Bill will enable these pensions, in the first instance as requested by Royal Mail and the Communication Workers Union. The Minister suggested that other employers who still have open defined benefit schemes are watching closely. Nevertheless, she has said that the Government will wait to see how the scheme beds in. Unlike defined benefit pension schemes, there is no hard pension promise or guarantee. However, unlike a defined contribution pension scheme, there is a pension target, which makes it easier to plan for retirement. If things do not go well, everyone in the scheme suffers collectively. In retirement, longevity is pooled. As I said, there is cross-party support, and the Bill builds on legislation passed in 2015 to enable risk sharing and risk pooling in workplace pensions.

Noble Lords have raised questions about safeguarding the interests of members of the scheme, in respect of, for example, transfer of rights and the destinations of transfers in the light of poor advice. Several noble Lords raised the issue of whether this should be an opportunity to prevent fraud, for example by making such transfers conditional on advice or levels of information—the noble Baroness, Lady Altmann, and my noble friends Lady Bowles and Lord Sharkey all raised that point. Other issues include intergenerational fairness, losses caused by market fluctuations or through transfers from the scheme, and the need for a capital buffer if the employer becomes insolvent. As the ABI has said, the success of CMP schemes will depend on their financial strength, combined with robust governance and regular reporting and disclosure. Careful thought must be given to how best to communicate to scheme members the crucial difference between a guaranteed and a targeted income. These are questions that many of us will have considered when reading the Bill.

As far as increasing the powers of TPR, the question of whether those powers are strong enough has been raised by a number of noble Lords—particularly the noble Baroness, Lady Drake—as have the issues of early intervention, how TRP can become aware of issues concerning pension funds and whether there should be growing duties on the Pension Regulator to become familiar with some of these very large schemes.

On the whole business of criminality, which was raised by the noble Lords, Lord Kirkhope and Lord Hutton, and the noble Baronesses, Lady Drake and Lady Noakes, this needs to be looked at again by the Minister. On the scope, to whom do the new criminal offences apply? Is it not only directors but also trustees and any other party who may be involved in an action that could have an intended knock-on effect on a pension scheme, even though they were trying to do the right thing? Is the intention of the policy that the new criminal offences should apply to activities and events that are much wider than the “wilful and reckless behaviour” described by the previous Minister? Are they to include day-to-day business activities that get caught accidentally but which are without wilful intent? The Bill needs to be looked at again, and some redrafting needs to be done.

The noble Lord, Lord Vaux, highlighted the different treatments of the shareholders and the pension holders and whether it is appropriate to pay a dividend when there are constraints on the pension fund and questions about its viability. Noble Lords asked whether the new measures will lead to people like Philip Green facing a criminal charge. I think the general view is that it is unlikely. My noble friend Lady Bowles wanted greater penalties. I think that people would support that if it was clear that the people getting those penalties had seriously offended and, as the previous Minister said, had wilfully brought ruin or damage to the scheme.

The pensions dashboard has received a lot of attention. The noble Baronesses, Lady Neville-Rolfe and Lady Noakes, drew attention to such issues as the cost, the importance of engagement with the public and how much care there needs to be in making information available about an individual’s personal circumstances. According to the ABI, already one in five adults have lost pension pots. The DWP estimates that 50 million pension pots will be lost or dormant by 2050. People are also highly vulnerable to fraud and scams. We believed that multiple dashboards with robust regulations, as proposed within the Bill and endorsed by Which?, is the right road to take.

Obviously, consumer engagement will be key to making this work. The noble Lord, Lord Young, mentioned the whole business of accessibility and security measures—and the time that this has taken—and other noble Lords mentioned the online banking model, which has proved so successful, and whether this could be a better model.

Like other noble Lords, I wish to talk about some outstanding issues. The DWP review recommends extending auto-enrolment; the noble Baroness, Lady Neville-Rolfe, mentioned what a success this had been. The noble Baroness, Lady Donaghy, agreed that it should be extended, particularly by reducing the lower age limit to 18 and removing the lower earnings limit. This could have a powerful impact on many people.

Noble Lords, particularly the noble Baroness, Lady Bryan, have mentioned the 1950s women. Might this Bill be an opportunity for the Government to give fairness and justice to these women, who have lost out on so much as a result of government policy?

The noble Baroness, Lady Altmann, mentioned the gender pay gap, which is a matter of great importance to many of us in this Chamber. This Bill could provide another opportunity to look at that. The qualifying earnings deduction operates against workers with multiple part-time jobs, particularly low-paid workers, including woman.

The noble Baronesses, Lady Hayman and Lady Jones, mentioned the duties to climate change and the importance of investment in sustainable businesses and the duties which could be placed on pension funds, which we are very supportive of.

Finally, the noble Lord, Lord Warner, spoke about the BMA. Has the Minister considered the briefing sent to us by the BMA? Have the Government plans to address that issue as part of this Bill?

As we have all said, there is great cross-party support for the measures in the Bill but a feeling that there are opportunities for action on a broader pensions landscape which could bring significant benefit to many people. I hope they will not be missed. We support the Bill and look forward to taking some of these issues forward in Committee.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Committee stage & Committee: 1st sitting & Committee: 1st sitting : House of Lords
Monday 24th February 2020 Grand Committee

[Baroness Bowles of Berkhamsted (LD)]

My Lords, like others, I speak in favour of all three amendments. In fact, I signed Amendments 6 and 7 but too late for it to show on the Marshalled List in respect of Amendment 7. I was one of the many noble Lords who mentioned intergenerational fairness, and fairness more generally, at Second Reading because, as has been explained, a significant number of members, particularly older members but not necessarily just them, transfer out after some good times for investments in the investment cycle. That leaves others bearing the brunt of later down cycles, hence the Ponzi analogy. I am actually not quite sure what “fairness among all members” actually means—it is difficult because of, for example, the different longevities between men and women—but I signed Amendment 6 because that was the closest thing to saying, “You’ve got to look widely at everything.”

I have come to the conclusion that the only way in which you can have fairness is to have some kind of buffer, which we will come to later on, or some kind of risk margin as proposed by the noble Baroness, Lady Altmann, or maybe both. In the interests of fairness, those who are transferring out should have to take their share of the risk; otherwise, if you are a good market-watcher you could perhaps spot your moment to make your move, and then that is perhaps unfair on the rest.

I, along with others, think that something must be enabled for these measures to be required. It is nice to know that something is already envisaged for the scheme, but there needs to be something for every scheme. There should at least be a requirement for that, and actually I think there should be a permission for things such as buffers and risk margins, rather than a prohibition.

[Baroness Janke (LD)]

My Lords, I too signed Amendment 2, which my noble friend Lord Sharkey so ably introduced. I will be brief because I think all the arguments have been very well covered. The only thing that I would add is that the importance of transparency in a scheme such as this seems fundamental. I know we are talking about communications and ensuring that members are fully aware of what they are signing up to, both the benefits and the disbenefits later on, but, as part of the arguments that have been put forward in favour of this group of amendments, there is the whole issue of explanation and ensuring that members are fully aware of their position under this type of scheme. I particularly support the idea that in order for a scheme to be registered, the explicit prerequisite is to show what the strategy is to address the whole issue of intergenerational fairness. I know we will be talking about capital buffers later on, but the amendments address the interests of transparency and fairness and the welfare of all members of the scheme, and I support them.

[Lord Flight (Con)]

My Lords, it will be very important to address these issues because I suspect that CDCs will become very popular among the younger generation as they have considerable attractions. I add only that the principle of building up of reserve seems to be one way of evening out fairness.

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I strongly urge the Minister to take heed of the advice of the DPRRC and to let the House have a schedule of the appropriate arguments for each proposed first-use affirmative. There are many of these cases. Rather than letting us have a schedule of the arguments, perhaps it would be better and simpler for the Minister to agree to replace all first-use affirmative procedures with straightforward affirmative procedures. I beg to move.

[Baroness Janke]

My Lords, I support the amendment. My noble friend Lord Sharkey raised this matter at Second Reading and in subsequent briefings. I alluded to transparency earlier; there is also the issue of accountability. We have heard about the recommendations of the DPRRC. I note that the Constitution Committee agrees with the DPRRC that the use of Henry VIII powers is inappropriate in this Bill, regrets the inclusion of skeletal provision and notes that

“complexity is not an excuse for taking powers in lieu of policy development”.

It is an august committee, so we should treat its recommendations seriously. I support the amendments and would like to the hear the Minister’s response to the recommendations of the DPRRC.

[Viscount Eccles (Con)]

My Lords, perhaps I might make a general comment. I support the way in which the noble Lord, Lord Sharkey, introduced his amendment. This is a problem with framework Bills. Why do we have framework Bills? It is because we do not know the answers to the problems posed, in this case by a particular kind of pension scheme. The results, if the Bill goes ahead as it is, will be quite worrying. I would not wish to be a trustee of this pension scheme. Why not? Because I would not have any powers. At any time, my efforts to play a proper role as a trustee of this pension scheme could be upscuttled by the Government changing their mind and introducing another piece of secondary legislation. All the fundamentals of this pension scheme—particularly in Clause 18, which the noble Lord referred to—are entirely in the hands of the Government of the day.

We have talked about all sorts of things that I am also thinking about from the point of view of the trustee. As a trustee, it would be my responsibility to try to ensure I had some sort of capital buffer, if I needed it. I would have to talk to the employer in a way that would give me some chance of success. With the Bill as it is now, the position of trustees is impossible or near to it.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 26th February 2020 Grand Committee

[Lord Flight]

My Lords, I want to point out that Amendment 28 is important because members of pension schemes do not generally have much knowledge or understanding of how their assets are invested and managed. This clause places a reporting duty on the Pensions Regulator to publish statements of investment principles under Section 35 of the Pensions Act. The amendment would also place a requirement on the Pensions Regulator to create an SIPP repository, accessible to the public through its website, so that all scheme members could check their scheme’s investment strategy.

It will be interesting to see how investment strategies are described. I think that it will be necessary for them to be described in a way that is readily understandable by all citizens.

[Baroness Janke (LD)]

My Lords, my Amendment 89 relates to the occupational pension schemes regulations in the statement of investment principles. Again, it is about compliance with the Paris Agreement, particularly to hold the global average temperature increase to well below 2 degrees centigrade. Other amendments in the group seek compliance in this area.

It is clearly very important to protect the interests of savers and the economy. I am grateful to the Minister for her amendments on climate change risk, her speedy response and her awareness of issues arising in this area. I have also supported Amendments 75 and 92. I certainly support Amendment 28 from the noble Baroness, Lady Altmann, on the register and publication of the SIPPs from all pension schemes, and understand the administrative problems of smaller ones.

As we have heard from others, the size of the pension fund is hugely influential, particularly in transforming the economy into a green economy. I believe that pension schemes have had enormous effects in other areas. My own recollection is of South Africa, where schemes exerted very strong influence. In my city of Bristol, when creating a smoke-free city, we sought to get the pension schemes and their investors to support it. This can be a very powerful instrument in changing behaviour and thinking; I hope that it will be.

The noble Baroness, Lady Hayman, mentioned that her amendments extend to all pension schemes. Again, I am not clear what the differences are. I note that the briefing from the ABI suggests that the PRA and the FCA are better placed to deal with the smaller pension schemes, but I would like to hear the views of the Minister on this. I very much support the spirit and content of most of the amendments in this group.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I shall speak to Amendments 52, 74, 75, 76 and 92 to which I have added my name. As the noble Baronesses have said, these amendments refer to the need to strengthen the obligations on pension funds to play their part in meeting the challenge of the climate emergency. We accept that the issue goes wider than this Bill, but we will succeed only if every part of government, including the DWP, industry and the economy play their part, so this pensions Bill does have a part to play.

In relation to pensions, it is vital that a consistent approach is taken across the pension scheme market with the DWP, the Pensions Regulator and the Financial Conduct Authority all requiring contract-based pension schemes and trust-based occupational schemes to demonstrate the same levels of compliance with our climate change objectives; otherwise, there could be adverse competition between the different funds, which we do not support.

I add my thanks to the Minister for acknowledging the importance of these issues when we raised them at Second Reading, arranging to meet us to discuss them further and tabling the Government’s amendment today. As the noble Baroness, Lady Hayman, said, it happened very quickly, and we were very impressed by that. It is fair to say that it is a start, but we do not think that it goes far enough. However, I am sure that we will have a good dialogue on this issue. In the meantime, we have tabled amendments.

I shall be brief as I do not want to echo what other noble Lords have said. Amendments 74 and 76 take out the specific reference to occupational pension schemes so that the requirement would apply to all pension schemes. This is important because, although occupational defined benefit and defined contribution schemes comprise a large part of the pensions market, there is a gradual shift taking place towards contract-based personal schemes. As one model is regulated by the Pensions Regulator and the other by the Financial Conduct Authority, it is vital that we take this opportunity to provide alignment and consistency on the climate change action that they require across that sector.

In the Minister’s helpful letter to Peers explaining the purpose of the government amendments, it did not seem to me that she addressed this lack of consistency. Perhaps she can do that now. Does she accept the need for a joint approach across the regulators to ensure that investment decisions have parity, so that one cannot take advantage of the other or lead to the detriment of members by requiring higher standards of one than another?

Secondly, our Amendment 75 explicitly spells out that the Government’s reference to climate change means the need to align with the objectives of the Paris agreement to hold temperature rises well below 2 degrees centigrade. It is important to have that wording in there because we bandy around the expression “climate change” but it means different things to different people, and we are concerned that it could otherwise be loosely interpreted. That is why we set out a more explicit requirement. We set out the reasons for that requirement at Second Reading. As other noble Lords have said, we are currently on track for 2 to 4 degrees centigrade of global warming by the end of the 21st century, and we know that that will have a profoundly negative impact on the global economy and therefore upon the investments and the financial returns of pension schemes. So it is important that we have a requirement to deliver our Paris agreement commitments. It is not just about us being fluffy and caring about the planet; it is a more hard-nosed issue about the direct interests of savers and our economy. That is why pension funds have such critical role to play. I hope that the Minister will accept the intent and the importance of that amendment.

Thirdly, I was pleased to add my name to Amendment 92, which provides a timescale for the consultation on implementing the recommendations of the Task Force on Climate-related Financial Disclosures. It requires that the consultation will commence within one month and be completed within one year. Obviously we welcome the Government’s intention to consult widely on this issue, and we understand some of the complexities that lie behind all that, but meanwhile the clock is ticking on our Paris commitments and we are failing to step up to the mark on that, so this is one of the many areas where we need to take urgent action but also where we could deliver the biggest impact. I hope that the Minister understands and accepts the need for that consultation and follow-up to take place within a specific timeframe.

Finally, our Amendment 52 returns to the issue that we raised at Second Reading about the need to inform pension savers via the dashboard of the actions being taken by their trustees to deliver on climate change as set out in the UK Stewardship Code 2020 and to align with the Paris agreement. This amendment would add these factors as information that may be required to be provided by regulation. I know that at Second Reading there was some argument—maybe there will be again today—about the information on the dashboard needing to be kept simple in the first instance. We understand that issue, but we also have to acknowledge, as the noble Baroness, Lady Hayman said, that pension savers are concerned about their pension funds propping up fossil fuel extraction, and they are keen to have information so that they can be empowered to take action on these issues. Our amendment has been tabled to explore how best we can achieve that by providing information in a simple and meaningful way to pension savers.

I hope that the Minister will agree that savers need to have access to this information and that the dashboard could be a meaningful way of achieving that objective. I look forward to her response.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd March 2020 Grand Committee

[Baroness Janke (LD)]

I have some amendments which we will come to later concerning similar issues. I very much support this amendment. The briefing that we had from the ABI gave us quite an insight into the way that women suffer as a result of not having a proper pension settlement. I very much welcome Amendment 78, which seeks to get the spouse’s permission for the transfer of a pension.

[Lord McKenzie of Luton]

My Lords, there are three amendments in this group. Amendment 78, in the name of the noble Baroness, Lady Altmann, focuses on the evidence of a member’s spouse’s consent when a transfer is to be made. We believe that this amendment has considerable merit and are supportive of it. Quite what the technicalities that come to confront us might be remain to be seen, but certainly we should seek to make progress on it.

Regarding the other two amendments in this group, Amendment 99 is simply the Northern Ireland equivalent of Amendment 77, which, as we have heard, deals with unfunded public service DB schemes. I am alarmed to hear that without this amendment they would be attacked by some source. That is rather worrying. Regarding the prescribed conditions that must be satisfied for the purposes of the provision, can the Minister outline what those might contain?

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th March 2020 Grand Committee

[Lord Warner (CB)]

My Lords, Amendment 86 is in my name and those of the noble Baronesses, Lady Altmann and Lady Janke. It is a rather simple amendment for tackling a complex problem that is, as the noble Baroness, Lady Neville-Rolfe, has said, causing a great deal of damage to the NHS and to patients.

I will not go into the intricacies of the interrelationship between pensions and tax policy, or repeat the data that I laid out at Second Reading about how this is affecting doctors. The noble Baroness, Lady Neville-Rolfe, has given a reprise of some of that data. There is plenty of data showing the impact on doctors and the NHS; you do not have to look very far to find it. Noble Lords will therefore be relieved to hear that I will not go over that ground again.

The point of this amendment is to address what is happening on the ground now in our NHS. We have arrived at a situation in which doctors can neither control their pension growth nor predict their tax bills; that is where we have got to. Tax bills cannot be calculated until the end of the tax year in which the tax has been incurred; by then it is too late for doctors to adjust their earnings. In some cases, the tax bill exceeds the entire take-home pay that the doctor would earn in a given tax year. We are getting to the point where doctors have to pay to work: that is the situation we have created.

The only way that they can avoid the tax bills is to reduce their work in anticipation, which is what they are doing. I have previously set out the implications of that form of workload reduction, so I will not repeat them, but they include, in many cases, taking early retirement. The serious implications this has for patients and the running of the NHS needs no exaggeration. Suffice it to say that there has been a very large decrease in NHS medical clinical capacity, with very serious implications for patients and the functioning of the NHS. The latest BMA survey of 6,000 doctors shows that even more doctors, in this year and in the past, are planning to reduce their work commitments in the tax year, which is only a month or so ahead. This is why the situation is incredibly urgent.

This problem was so serious that NHS England acted to take the unprecedented step of agreeing to cover annual allowance payments for NHS doctors for the current tax year to try to ease the significant winter pressures on the NHS. At present, as far as I know, there is no plan to suggest that this short-term mitigation will continue into next year, let alone the longer term. It is all very well for the Government to pass last week an NHS Funding Bill, but if there is a serious shortage of doctors, it will not do patients much good.

The Government have been reviewing this problem for some time, but my information from the BMA and others is that they have not so far offered any worthwhile mitigation scheme. All that is available is the option of paying these large tax bills from future pensions by generating a loan against your pension which attracts a high rate of interest and effectively reduces your pension. This option will not reduce the outflow of doctors. Amendment 86 requires the Secretary of State to extend the NHS England scheme on a permanent basis. It also prevents doctors incurring any interest-bearing loans that will reduce their eventual pensions. It has been prepared with the help of the clerks, for which I am grateful, and discussed and agreed with the BMA and other professional bodies.

I am not saying that my amendment is the only solution to the problem—the noble Baroness, Lady Neville-Rolfe, has given some other options—but it is an attempt to apply an urgent response to stop more doctors leaving the NHS or reducing their capacity. If the Government can come up with a better solution, I will be delighted. So far, there is no sign of a solution acceptable to the profession that would stop the NHS haemorrhaging doctors.

Let us remember again that the new tax year starts in a month, and that the coronavirus epidemic threatens all of us. I listened yesterday to the Prime Minister and the Health Secretary referring to bringing back retired doctors; that seems to be an important part of their emergency plan for dealing with a potential epidemic. I wonder how aware they and their No. 10 special advisers are of this own-goal lurking in the bureaucracy. We can ill afford to lose doctors from our NHS through a self-inflicted government muddle when a solution is to hand.

[Baroness Janke (LD)]

My Lords, I too have signed both amendments which, as has been said, relate to the current situation of the punitive pension taxation on doctors in the NHS. The annual allowance means that retired doctors working additional hours may incur large tax bills even if they have had only a modest rise in pensionable pay; and the taper results in a further problem, as there is an effective tax cliff edge where people can incur additional tax bills of up to £13,500 if they cross the threshold by as little as a pound.

This huge disincentive to retired doctors who are working to fill staff shortfalls in the NHS has exacerbated the existing pressure. As the noble Lord, Lord Warner, said, the impact was such that NHS England took the step of agreeing to cover the annual allowance payment for NHS doctors for this tax year as a temporary mechanism. As he also said, it seems that so far there are no plans for this to be a long-term solution.

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[Earl Howe]

My Lords, my answer to my noble friend and the noble Lord, Lord Warner, has to be exactly the same as that which I have already given. I can do no other than urge all noble Lords to wait for the Budget announcement. I cannot comment on what ideas the Chancellor has in front of him on this issue. Those ideas may or may not include those that have been articulated by my noble friend and the noble Lord—I do not know. I suggest that we get past next week and then take stock. No doubt noble Lords will consider how best to approach this on Report, if they feel that to be necessary.

[Baroness Janke]

The Minister said that these two reviews will be reported in the Budget. Is he talking about the intention to conduct a review or saying that the outcomes of reviews that have already been conducted will be announced in the Budget?

[Earl Howe]

The reviews are under way. They have not yet been concluded, but the conclusions will be announced on Budget Day.

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Moved by

[Baroness Janke]

87: After Clause 128, insert the following new Clause—
“Automatic enrolment age
In section 3(1)(a) of the Pensions Act 2008, for “22” substitute “18”.”

[Baroness Janke]

My Lords, I have three amendments in this group. Amendments 87 and 88 relate to auto-enrolment to reduce the lower age limit to 18 and introduce a review of auto-enrolment which could also examine the possibility of removing the lower earnings limit.

As many noble Lords have said, the success of auto-enrolment is clear, with 87% of eligible employees participating in a workplace pension in 2018. However, by reducing the lower age limit to 18 and removing the lower earnings limit, a further £2.5 billion could be added to savings.

There would also be advantages for younger people in starting to save for pensions earlier in their working lives. It is estimated that the average 18 year-old will end up with a pension pot at retirement around £18,000 lower if they have to wait until 22 to be automatically enrolled. Given that we want people to start saving for a pension as soon as possible, an age limit of 22 seems increasingly hard to defend. Even employers would generally have a simpler system were they to enrol everyone, rather than having different rules for those above and below different age thresholds.

Moreover, further extending the coverage of auto-enrolment by reducing the earning threshold to the national insurance primary threshold would bring 480,000 people, mostly women, into pension-saving. It would also help to improve the gender pensions gap, which is the subject of Amendment 96 in the same group and a growing matter of concern. A woman aged 65 has one-fifth of a 65 year-old man’s pension.

Private pension schemes seem to be the main reason for the gender gap, placing women at a disadvantage, mainly due to domestic roles and lower pay. Among 65 to 74 year-olds, median private pension wealth is £164,700 for men and £17,300 for women, who have just over 10% of the private pension wealth of men. Among the population as a whole, women’s median pension wealth is £4,300, less than a quarter of the £19,800 held by men.

Although auto-enrolled private pensions include all employers, they exclude low-paid employees. Like other private pensions, they make no allowance for periods of caring, hence they perpetuate further the pensions gender gap. New modelling has shown that a family carer top-up in an auto-enrolled pension would substantially boost women’s private pension wealth. Also, the suggestion of a voluntary earnings-related state pension addition—a fully portable auto-enrolled option that allows carer credits—would be simpler and would better meet women’s need for extra pension savings. Amendment 96 provides the opportunity for an early review of issues affecting the pensions gender gap in CMP schemes.

I support the amendments in the group in the name of the noble Baroness, Lady Drake, which address similar and related issues. I beg to move.

[Lord McKenzie of Luton]

My Lords, Amendment 95 in this group is in my name. It seeks to press the Minister to make three important changes to the current auto-enrolment scheme—there are some overlapping issues in this. The changes are: to remove the threshold requirement for earnings over £10,000 to be auto-enrolled; to remove the qualifying earnings deduction; and to extend the threshold down to the age of 18 for workers. As NOW: Pensions points out, these would be positive steps in helping to narrow the pensions gender gap and would be a significant step in boosting participation in pension saving. This should be uncontroversial, as it goes with the flavour of the deliberations of the 2017 automatic enrolment review.

However, on timing, the Government’s ambition is to phase in the abolition of the LEL, with broader changes to the framework, until the mid-2020s. We suggest that this is a weak ambition and urge the Government to reconsider. We recognise that the changes cannot all happen overnight, but the longer we wait, the more difficulty there will be in getting younger people into the savings habit. Abolition of the LEL and making contributions payable from the first £1 of earnings will help to build financial resilience. If implemented, these measures would eventually—I stress “eventually”—bring an additional 910,000 workers into auto-enrolment with, as we have heard, an additional £3.8 billion of pension savings. It would be a good first step in addressing the pensions gender gap.

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[Earl Howe]

I understand from officials in the Ministry of Justice that there has been a relatively small number of cases where the pension scheme member has taken advantage of the pension freedoms to act in a way that frustrates the intention of an attachment order. However, I would like to establish what evidence there is of the scale of the wider problem, as outlined by my noble friend Lady Altmann and the noble Baroness, Lady Drake, in our debate on Monday, before deciding on the appropriate government response. I can tell the noble Baroness that my officials will work with others across government to gather the available evidence.

[Baroness Janke]

I thank the Minister for his assurances and for the information he gave. I am sure that the Government want to pursue the evidence-based approach, but the actual situation is very hard for many women at this moment. I welcome his offer to work with the Government on this. As the noble Baroness, Lady Drake, said, many groups will be interested in doing so; I hope that we can engage them in positive working on this issue.

A much larger proportion of those now in pensioner poverty are women because their caring responsibilities were never represented in the past. I feel that there has to be a recognition of the current situation while agreeing that we must move forward and take people with us on this.

On the amendments in the name of the noble Baroness, Lady Altmann, it is not only a question of spousal consent to an attachment order. It is often not possible to make a pension settlement because it takes place before the process reaches that stage. Spousal consent is essential because, as others have said, once the money has gone, it is extremely difficult to recover it. The ABI has written a briefing on divorce and pensions; I recommend it to the Government. Pensions in divorce is another issue that is extremely important to women.

Again, I thank the Minister for his response. I beg leave to withdraw the amendment.

Amendment 87 withdrawn.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 30th June 2020 Lords Chamber

[Baroness Janke (LD) [V]]

I took my name off the list.

[The Deputy Speaker]

I did not have a note of that. I call the noble Lord, Lord Balfe.

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[Lord Blunkett (Lab) [V]]

My Lords, I will not detain the House for very long. I draw attention to the interchange and interface between the insolvency legislation that has now passed into law, on which I spoke a short time ago, and this Bill. The reason for that is that we are at a moment of the trigger events being more likely than in our recent history. The noble Baroness, Lady Altmann, referred to the pension freedoms. It struck me as I was listening to the debate today how relevant that is because five years ago the then Chancellor decided to provide a stimulus to the economy as PPI out-payments were drawing to a close, and he did so with an understanding that that would not destroy the pension entitlement or, as provided in Amendment 32, the balance of fairness between generations.

I am supporting both Amendment 8, moved extremely well by my noble friend Lady Drake, and Amendment 32. Anything that puts people and the wider scheme at risk, including these CMP schemes, is dangerous not only to the individuals concerned but in the dislocation of something broader—that is, the commitment that I commenced when my noble friend Lady Drake, along with John Hills and the chair of the commission back in 2005, Adair Turner—the noble Lord, Lord Turner—proposed auto-enrolment.

We are at a moment when, following the withdrawal of the furlough schemes, we face enormous unemployment, great insecurity and risk. At this moment we need to be able to secure not just the present but the future, and that future has to be about those young people contributing, as has already been said in relation to Amendment 32, and the danger that those who find themselves in temporary need of funding will withdraw funds at a moment that is deeply inappropriate for the viability of the programme as a whole. I hope that the Minister will respond positively and, if not, that we will press Amendment 32 to a vote.

[Baroness Janke [V]]

My Lords, I support Amendment 8 but I will address my remarks to Amendment 32. The amendment seeks to ensure fairness for all members of CDC schemes, especially between different generations who may stand to gain or lose from future circumstances, as noble Lords have already referred to.

In Committee we debated this issue at length and a number of issues emerged. The Bill states that the scheme provides for intergenerational fairness among its members, specifically in connection with the amount of benefits paid to pensioners, proposed adjustments to annual benefits and cash-equivalent values provided to members wishing to transfer out of the scheme. A requirement of collective money purchase schemes requires outperformance or underperformance to be reflected in the benefits paid to all members. However, there is usually a reluctance to deliver pension cuts, as in the Netherlands example that the noble Lord, Lord Vaux, described in Committee: when the Government intervened temporarily to avoid a cut in pensions, younger members of the scheme lost out as pensions were kept higher than the scheme could afford.

CDC schemes are required to agree a pension target rather than a firm outcome, and the expectation of pensioners may be different in the event of the underperformance of investments over time. So unless pensions were to be cut, which is a decision that is largely avoided, younger members of the scheme could lose out in the interests of existing pensioners. In the instance of a large number of people choosing to cash in their pensions, as others have said, there is a risk to new and younger entrants to the scheme, particularly if the value of the scheme is significantly reduced.

Our Amendment 32 seeks to press the Government into being more explicit and much clearer in their commitment to fairness across the board to all members of the scheme by requiring the trustees to make an assessment of the fairness of the scheme. The amendment addresses the interests of transparency and fairness and the welfare of all members of the scheme, and I support them.

[Lord Naseby]

I think the amendments have been extremely well aired and I await the response from my noble friend on the Front Bench.

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[Baroness Bennett of Manor Castle [V]]

My Lords, I rise—at least metaphorically—to speak to Amendment 34. I will also refer to Amendments 73 and 79, to which I have attached my name. I pay tribute to the Minister, who has been very generous with her time on those two later amendments addressing the climate emergency. Her department has paid a great deal of attention to them; this is an area on which progress has been made, which is appreciated. It is a positive sign.

However, Amendment 34 addresses the fact that the climate emergency is only one of the critical factors facing our society today. “Environmental, social, and governance” is one of those buzz-phrases that does not exactly trip off the tongue. It means this: how does a company perform as a steward of the natural world and as a part of the society from which it makes, hopefully, its profits? What is its impact on its employees, suppliers, customers and the community in which it operates? We are talking about systems thinking of the kind that lies behind the sustainable development goals, to which this Government and most others around the world have signed up. It means having a decent life within the physical limits of this one fragile planet.

You might say that that is a pretty good goal that we should write into pensions legislation anyway. Even if you do not think that it is something this legislation should try to achieve, if you consider the narrower situation of the direction and risks of investments, there is increasing awareness in the investment community that environmental, social and governance issues are also a very good measure of risk. In some of the great financial and natural disasters of recent times, such as the BP Deepwater Horizon oil well blow-out in 2010 that had such enormous environmental impacts and the Volkswagen “Dieselgate” scandal, we have seen a problem with a company’s actions, but with a narrow focus on the climate emergency and not considering other factors that proved to be a real issue.

On the technicalities of this amendment, I stress that it has taken on board the Minister’s comments in Committee. The amendment then suggested that this information be included in the pensions dashboard; it now proposes that it could be included elsewhere when supplied to the Pensions Regulator—perhaps on its website or the SIP repository.

I know that the noble Baroness, Lady Ritchie of Downpatrick, will say later in the debate on this group of amendments that some of the amendments relate to Northern Ireland and that pension Bills have previously been left to the Assembly. I would appreciate it if the Minister would address that in her response. I would also appreciate a response on the fact that, while the climate emergency is one of the critical issues we face, we are in an age of shocks. There are many others: the nature crisis, the social emergency and the big impacts some of our largest companies are having around the world, as we see in the protests and extreme distress in garment factories in countries such as Bangladesh, India and Cambodia. Pension investors should be able to take account of these issues.

I suggest to your Lordships’ House and the Minister that taking account of the climate emergency is a necessary condition in this Bill, but for the Bill to be sufficient for the 21st century, we also need to include the broader environmental, social and governance issues. I beg to move.

[Baroness Janke [V]]

My Lords, I thank the noble Baroness, Lady Bennett, for her speech and her amendment. I also thank the noble Baroness, Lady Hayman, for her work on this issue and the Minister for all her work in achieving the government amendments on this important matter. While I recognise the major progress that has been made, I shall speak in support of Amendments 72 and 74, which are signed by my noble friend Lord Sharkey and myself. I shall speak also in support of Amendments 73 and 79 from the noble Baronesses, Lady Hayman, Lady Jones and Lady Bennett. I had also intended to sign these amendments and I apologise for not doing so.

In Amendments 72 and 74, the intention is to strengthen the obligation to ensure that the regulations of the scheme reflect the importance of the issue. Replacing “may” with “must” in the amendments to the Pensions Act strengthens the requirement on trustees to ensure that there is effective governance of the scheme with respect to the effects on climate change.

Amendment 73 strengthens the regulations and adds to our Amendments 72 and 74 by ensuring that relevant information in relation to climate change must be considered as part of the regulations.

Amendment 79 aims to ensure that the regulations place an obligation on trustees or fund managers to report on and publish how they have taken into account relevant treaties and other government commitments on climate change. The improvements to the Bill already made are very much welcomed, and we support these amendments today in the spirit of strengthening them. It has been well documented that more and more savers are keen that their savings should serve to strengthen ethical policies, particularly on climate change. As a result, they require more transparency on how their savings are invested.

Pension funds have huge economic power and must play their part in meeting our 2050 targets. UK pension funds hold more than £1.6 trillion in assets. The size and influence of pension schemes means they have a vital role to play in ensuring that the UK meets its climate commitments. It is essential that the Bill enables that to happen.

[Baroness Hayman (CB)]

My Lords, I remind the House of my interests as a co-chair of Peers for the Planet. I should perhaps also declare that my son works for a new campaign, Make My Money Matter, which is being launched today by Mark Carney and Richard Curtis. It encourages all of us to be more active to ensure that our pension schemes reflect our values and that they protect both our financial and environmental future—an indication perhaps that consumer pressure on issues like climate change in relation to pensions is on the rise from that described by the noble Lord, Lord Balfe. In that context, perhaps I should warn the noble Lord, Lord Naseby, that as a pensioner under the parliamentary fund, I may come and discuss these issues with him later.

As the noble Baroness, Lady Janke, said, I have Amendments 73 and 79 in this group, which are cross- party. I will also speak to government Amendments 75, 76, 77 and 78, which cover the same ground—I know that the Minister would say “cover that ground more comprehensively”.

At this stage, it is appropriate that I join others in thanking and praising both the Minister and her officials for the amount of work and careful consideration they have given to these issues and for their responsiveness to the issues that have been raised. We have moved some distance from the start of the Bill, from a position where there was no provision on climate risks to provisions for a regulatory framework that takes into account our objectives under the Paris agreement and which will ensure that trustees and managers are required to assess and report on their scheme’s alignment with the objective to keep global warming to 1.5 degrees centigrade. That includes assessing and reporting on how their schemes are exposed to the effects of climate change and on how the assets of the scheme themselves contribute to climate change.

Improving disclosure in this way is essential for consumers, who need to understand the risks attached to their personal investments. It is also essential for trustees, as greater transparency will help drive their behaviours and decisions, and trustees will need clarity on what is required of them and a clear signal of the long-term trajectory that the sector will need to follow if we are to achieve our net zero targets.

The two amendments that I have tabled are drafted very simply—some might say simplistically. They are broad and would apply to any regulations made under the Bill. Amendment 73 ensures that, in making regulations, the Government take account of international climate change treaties of which the UK is a signatory. It also ensures in turn that regulations require trustees or managers to take account of such treaties in addition to the existing general provisions to secure effective governance of a scheme with respect to the effects of climate change.

Amendment 79 ensures that regulations can place requirements on trustees or managers to publish information about how schemes have taken into account the objective to keep global warming well below 2 degrees centigrade or any other future targets under international treaties. That is critical, because disclosure will create pressure on trustees to reduce schemes’ contribution to climate change.

As I have said, the Minister has been extremely responsive, and we have had a constructive dialogue about these amendments. She has put down Amendments 75 to 78, which are, I hope, more comprehensive but slightly less comprehensible to the lay person. I will ask a couple of more technical questions, which I would be very grateful if she could respond to.

The first question is on Amendment 75 and addressing climate risk. Although the most significant climate-related risks which pension schemes face long-term are not idiosyncratic to particular companies, sectors or geography, they arise from system-level macroeconomic and financial stability risks caused by the impacts of climate change and a disorderly transition. Yet in fact the three material climate risks to portfolios that managers identify tend generally to focus on the risks associated with the transition to a low-carbon economy over the physical risks of climate change. I therefore hope that the Government will confirm the broadest possible definition of the risks in the Bill, meaning transitional, physical, financial and systemic.

On Amendment 76, I would be grateful if the Minister could confirm that proposed new Clause 41A(4A) and (4B) apply across all the regulations to be made under the Bill, rather than applying only to regulations referred to in new Clauses 41A(3)(b). That is essential if consideration for international and other climate change goals is to permeate the regulatory framework as it should.

On Amendment 76, again I would like some confirmation. There is reference to

“or other climate change goal.”

Can the Minister confirm that that includes our domestic net zero target—I think that was very much the intention—and that there will not be any diminution of our targets?

On Amendment 77, again, the reference is to Article 2(1)(a) of the Paris agreement, but does that encompass provisions in Article 2(1)(c) as well, which relate to financial flows and therefore seem to be relevant?

Lastly—the Minister will be glad to know—on technical issues, can the Minister assure me that Amendment 78 does not limit publication requirements to information on the effects of climate change on schemes but that it also covers the contribution of the assets of schemes to climate change?

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[Baroness Neville-Rolfe [V]]

My Lords, as noble Lords know, I am as concerned as anyone with consumer protection. I therefore welcome the amendment which we have agreed to during the passage of the Bill to ensure that the Money and Pensions Service provides a public-owned dashboard. That was a great step forward, and we will come on to that on the next amendment.

However, I fear that this amendment could stop commercial experimentation, which is desirable if properly regulated. As I understand it, any organisation providing a pension dashboard must achieve authorisation from the FCA. Innovation is important and can help consumers and pensioners. If the amendment were passed, it could have a chilling effect and prevent innovation until another Bill had cleared Parliament—not, I suspect, a welcome prospect for HMG after the extent of the amendments made to this Bill.

I have a question for the Minister. I am a little concerned about compliance with GDPR, which obviously is important in securing equivalence in the EU context, where portability is a key requirement. I wonder if the amendment could run us into any trouble on that aspect of regulation.

[Baroness Janke [V]]

My Lords, I support Amendment 52. I also support the other two amendments tabled by the noble Baroness, Lady Altmann, as a result of the matter being much debated in Committee, I am very grateful to the noble Baroness, Lady Drake, for her clear analysis of the issues involved.

Many would say that pensions dashboards are long overdue. They enable people to plan their future finances taking account of existing pensions, and to take a long-term view of future financial provision. However, the challenge of producing a dashboard that will adequately cover the complexity of the pensions landscape should not be underestimated. We are talking about millions of people, and the enormous number of lost pensions that we hear about shows both the need for and scope of the task. Given the level of complexity, the scope for scams and fraudulent actions increases and it is therefore essential that members of the public are sufficiently protected.

As many noble Lords have said, the vulnerability of many people means that they can be much more susceptible to scams and bogus claims and apparently attractive offers from the commercial sector. The additional factor that digital literacy and access can be problematic for some people also needs to be considered. That and the lack of sound advice can lead to bad decisions and life-changing, irreversible mistakes, as we heard from the noble Baronesses, Lady Drake and Lady Altmann, in Committee.

Pensions is a complicated subject; it is not easily accessible by everyone. Lack of engagement, which has already been talked about, is a result and, as the noble Baroness, Lady Drake, said, people often take the line of least resistance and take wrong decisions that they are unable to change. I hear the arguments made by the noble Baroness, Lady Neville-Rolfe, about innovation. Certainly, it is an important factor, but I feel that the protection of pension holders is more important. Measures to provide full protection should be the subject of further primary legislation rather than secondary legislation, as indicated in the Bill.

[Baroness Sherlock [V]]

My Lords, I will deal first with the data issues. There are known to be problems with data quality in many pension schemes that need to be addressed. The regulator has rightly been pushing trustees to improve the accuracy of their data and to evidence that they are doing so. But as we move to a world of pension dashboards, with a consumer’s savings all being displayed in one place and the expectation that behaviour will be influenced by it, data accuracy and standards are key, so I hope the Minister will take to heart the issues raised today.

On transactions, done well, a pensions dashboard can be a really useful service, helping savers to locate lost pots and see all their different pensions in one place—state and private—and work out if they are saving enough for retirement. But there are big risks, especially because the Bill leaves almost every aspect of the dashboard service wide open. In Committee, we tried to put some boundaries around this. We tabled an amendment to insist that there must be a public dashboard from the outset, and I am delighted to see the government amendment now requiring that. Another of our amendments required the FCA to regulate the provision of dashboard services; again, Ministers confirmed that that would happen. Another of our amendments proposed that using the dashboard to see your own data must be free, and Ministers confirmed that it would be. We have come a long way and I am really grateful to the Government for engaging with our concerns.

But two important issues are still outstanding, and they are addressed in this and the next group. As my noble friend Lady Drake explained so well, Amendment 52 would stop delegated powers in the Bill being used to authorise commercial dashboards to engage in transactions. We simply believe that the risks of this are such that Ministers should have to come back to Parliament and seek further authorisation before going down that road. Remember, we still do not know how many dashboards there will be, who will run them or what information can be put on them. We do not know where liability will lie for each link in the chain or how consumers will be compensated if they lose out. We do know that there will be a public dashboard and that the Government want commercial dashboards running alongside it from the start.

But let us think for a moment. If a company cannot charge to look at a dashboard, why would they create one, unless they can profit from it in some other way? How might that be? Could a company show a consumer their data and say, “Look, you’ve got all these different pots. Wouldn’t it be tidier if your brought it all over into this fund here, which my firm happens to run?” Could they fund it by taking advertising? Could a consumer log on to a commercial dashboard and see an advert popping up, inviting her to connect with an adviser, or saying, “Have you ever thought about equity release?” There are even risks just in presenting data in a way that could privilege some kinds of assets over others, depending on who is running the scheme.

This is a risky market—a point that my noble friend made very well. Those who sell complicated pension products generally know and understand a lot more about them than those who buy them. Let us remember the history of financial services mis-selling—from personal pensions through to endowment mortgages, to the PPI scandal, as a result of which, firms are likely to end up repaying up to £50 billion to consumers. The average pension pot is worth rather more than the average PPI policy. The dashboard project could extend to some 22 million people. It is a powerful tool.

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[Baroness Neville-Rolfe [V]]

I welcome my noble friend Lord Young’s probing amendments on verification and timing, and I look forward to hearing from the Minister. I was very struck by the summing-up on the previous amendment by my noble friend the Deputy Leader of the House, who showed just how strong the Bill is on consumer protection and to what lengths the Government have gone to meet the House’s concerns. But others have just tried to use the Bill to bring in yet more burdensome measures.

For me, Amendment 63 takes the biscuit, because the Government have agreed to bring in a Money and Pensions Service dashboard so that there is a government, public-funded version that includes people’s various pension pots and the old-age pension. The proponents of this amendment are then trying to exclude the trail-blazing commercial version, which was behind the Bill in the first place and is designed to help savers, building on the good practice that exists out there in the best pension funds and elsewhere. The amendment would lead to a delay of a year for those dashboards, yet they will all be properly regulated and monitored and MaPS would be in the lead. Competition from others will be an incentive to quality and speed, helping to identify the bugs that the noble Baroness, Lady Drake, who knows so much about pensions, referred to.

I cannot support this amendment. It is worrying that the Government are losing on a series of inappropriate amendments because noble Lords are not coming to the House to speak and listen, but can vote from their garden benches.

[Baroness Janke [V]]

I support Amendment 63 and am not voting from a garden bench. The case for this amendment has been very well stated and I will therefore not take up time by repeating it here. I support Amendment 63 and will vote for it if there is a Division.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Tuesday 19th January 2021 Lords Chamber

[Lord Vaux of Harrowden (CB) [V]]

My Lords, as there are no counterproposals to these Commons amendments, I shall try to brief, but there are a couple of points I would like to make in relation to Commons Amendments 1, 2 and 3.

Throughout the passage of the Bill, we have had lengthy discussions around the risk of unfairness, intergenerational or otherwise, that is inherent to collective money purchase schemes, or CDCs as they seem still to be called. I regret that the Government chose not to accept the amendment which required trustees to make an assessment of the extent to which a scheme is operating in a manner fair to all members; it has been removed by Commons Amendment 1. That seemed a fairly uncontroversial concept. However, the Minister has been very clear that the Government acknowledge the risk of unfairness, that they intend to learn from experiences in other countries, such as the Netherlands, and that they intend to deal with this issue in the regulations that they will publish in relation to Clause 18.

Commons Amendments 2 and 3 remove the amendments your Lordships agreed to in relation to pensions dashboards which required that there should be a period during which pensions dashboards are initially restricted to the MaPS dashboard and that they should not become transactional platforms without primary legislation. On the second point, I remain quite uncomfortable with the idea of a pensions dashboard becoming a transactional platform without very serious thought and experience. However, these matters will also be dealt with by regulations and I am confident that the Minister has heard the concerns that have been raised, even if she does not agree with the proposed method of dealing with them.

The Minister has been very generous with her time and commendably willing to meet to listen to and discuss concerns throughout the passage of the Bill. As a result of changes made to the Bill as it passed through your Lordships’ House, most of the regulations that will follow will be subject to the affirmative procedure. However, even under the affirmative procedure, it will not be possible to amend regulations. I therefore urge the Minister to continue her constructive and collaborative approach in relation to the regulations that will now follow by consulting across the House before draft regulations become set in stone. That way she will be able to take advantage of the very deep pensions knowledge and experience in this House and the regulations will be all the better for it.

[Baroness Janke (LD) [V]]

My Lords, I thank the Minister for her clear presentation and her response to the issues raised during the passage of the Bill, as expressed in these amendments, which were based on concerns about protecting members of the public from criminal scams and malpractice and about minimising potential risks and threats to the value of pension schemes.

The amendments sent to the other place for consideration related, first, to the wish to ensure fairness, particularly to younger and newer members of the new CMP schemes; and, secondly, to the protection of pension scheme members from scams and exploitation in the operation of the dashboard by preventing financial transactions on it and by allowing the operation of the public dashboard for one year before allowing private sector models.

I understand from the Minister’s opening remarks that the concerns of the movers of those amendments have been at least partially addressed by Ministers. However, I support the proposal from the noble Lord, Lord Vaux, about consultation across the House before the regulations are drafted for consideration. Once the Bill is passed into law and these measures come into operation, we expect that they will be closely monitored and that if further concerns arise they may be reconsidered during the passage of regulations at a later stage. In view of this, we are not proposing to pursue these amendments further.

The fourth amendment concerns the need for different treatment of open and closed schemes and is the subject of further amendments today. My noble friend Lady Bowles will address the important issues raised when this amendment is considered in the next group.

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[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

I call the noble Baroness, Lady Janke, whose name was left off the list inadvertently.

[Baroness Janke (LD) [V]]

My Lords, it is a great pleasure to follow the noble Lord, Lord Davies. No doubt we will welcome his expertise and experience into what is already a considerable group of experts and knowledgeable people in your Lordships’ House.

I support the amendment of my noble friend Lady Bowles. I pay tribute to her for the way in which she has pursued this matter with great skill and tenacity by working across the parties and seeking agreement on a way forward. There is clearly a problem for open DB schemes, as has been expressed to us already, particularly by the railway workers’ union but also by other pension funds. Clearly, as my noble friend has said, it is unrealistic and wrong for the same restraints to be imposed on open DB schemes that are not destined for closure in the immediate future as those imposed on closed schemes. As others have said, if that were to be the case, currently open DB schemes not on the path to maturity would suffer and may close as a result, with dire effects for their membership and a considerable impact on the wider economy.

I very much welcome the Minister’s opening statement, in which she indicated her willingness to ensure that open schemes not on the path to maturity should not be prevented from making more beneficial investments. I hope the five points clearly outlined by my noble friend Lady Bowles will form the basis of the future operation of these healthy open schemes, as the noble Lord, Lord Davies, referred to.

I too record my thanks to all those who have contributed to the Bill, such as the ministerial team, who have provided information and expert advice, and noble Lords who have demonstrated their knowledge, experience and expertise in considering the Bill. They have shown how this House has not only provided scrutiny and challenge but enabled improvements to the legislation and benefits to those who will depend on this in future.

I thank the Minister and her colleague in the other place for their willingness to keep an open mind and not only to listen but to take on board suggestions and use their best endeavours to address the issues raised by Members. I also thank all the teams supporting Members, particularly Sarah Pughe in the Lib Dem office, who has provided us with marvellous support. I very much look forward to the Minister’s response and hope that it will reassure my colleague that she is able to let this matter move forward and that her concerns will be listened to and acted upon.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

Does anyone else in the Chamber wish to speak? I think probably not.