Bereavement Services

Baroness Stedman-Scott Excerpts

Thursday 13th February 2020 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, I know that this issue is very close to the noble Baroness’s heart, and I am pleased to have been able to meet with her to discuss it. It is absolutely right that we provide people with easily accessible support to help them through the difficult period following bereavement. The Tell Us Once service was introduced to develop effective partnerships and deliver linked services across local and central government. Noble Lords will be pleased and interested to hear that a survey showed that 98% of people who used the service were willing to recommend it to others, and that 98%, again, had an overall good experience.

[Baroness Ludford (LD)]

I thank the Minister for that reply and for kindly meeting me beforehand, but I do press for real action. People who have lost loved ones—who are emotionally low and needing good, compassionate support—are too often faced with inefficient and slow services, increasing their stress at a time when many are prone to depression, as the charity Sue Ryder reports. The charities Cruse and Macmillan include in their reproaches financial firms with their disparate documentary demands, utilities firms and, I am afraid, the DWP. HMRC makes you fill out an inheritance tax form even when there is no such tax to pay. Should there not be one department or Minister to take responsibility, get a grip on all this, work with the campaigners I have cited, insist on slimming down and streamlining “bereavement bureaucracy” and deliver a much better deal for grieving people?

[Baroness Stedman-Scott]

I fully appreciate the impact of a bereavement on individuals; I am sure that all noble Lords have had that at some point in their lives. We have talked about the Tell Us Once service. The noble Baroness—I am saying this respectfully—in true spirit raises a challenge. It is not one that we should dismiss, although people are saying that it cannot be done. I talked to Cruse yesterday after our meeting. It has a campaign called Bereaved Customers First, and it is trying to get banks, building societies, utility companies and other organisations to collaborate and to have what my pension friends would call a dashboard. I would like to speak to Cruse further. I urge the noble Baroness to carry on with this thinking. If it would help, I would be very happy to meet with her to take that forward.

[Baroness Sherlock (Lab)]

My Lords, in the Pensions Act 2014 the Government rather controversially reformed bereavement payments to families who had lost a parent. However, last Friday they lost a case in the High Court in which the court ruled against them, saying that the policy was in conflict with the Human Rights Act because it did not extend bereavement support payments to fathers who had been living with the mother of their children for many years but were not married. I am interested in what the Government are going to do about this. They lost an equivalent case on the old system, Widowed Parent’s Allowance, 18 months ago and we have been waiting for a response to that court case ever since. Yesterday at PMQs, the Prime Minister had this case raised with him. He described the latest case as an injustice and said that

“we will do all we can to remedy it.”—[Official Report, Commons, 12/02/20; col. 852.]

When are we going to get a review both of the new bereavement support arrangements and, crucially, of the position of cohabiting couples?

[Baroness Stedman-Scott]

I am not one to contradict the Prime Minister, and I am not going to try to do that. [Laughter.] I was really trying hard not to make fun of today, given the subject matter, but noble Lords are spot on. We have the judgment on the Jackson case, and officials are considering it. The Prime Minister has said more than I have been allowed to, so let us just let what he has said stand. The McLaughlin case that the noble Baroness has referred to is a bit more complicated—this is not an excuse—and our officials are working with Northern Ireland officials to see what can be done.

[The Lord Bishop of Winchester]

My Lords, the number of pauper public health funerals has risen by 70% since 2015. Churches perform half of all funerals in the United Kingdom and offer ongoing bereavement support to all. Recognising that other faiths also offer bereavement support, will the Government commit to encouraging local public health departments to work with faith communities to improve bereavement support and ensure that every person receives adequate funeral provision that includes care for the bereaved, who are often excluded?

[Baroness Stedman-Scott]

We must pay tribute to the Church of England and faith organisations, which come into their own in these very difficult times and provide invaluable support. I will take the right reverend Prelate’s request to officials and write to him with a response.

[Baroness McIntosh of Pickering (Con)]

My Lords, will the Minister use her good offices to ensure that the public are more aware of the bereavement support payment, which I do not think is widely understood at present?

[Baroness Stedman-Scott]

Again, it is important that people understand the support that is available to them. I will go back to the policy officials and see if we cannot do something a little more robust to up the ante on the campaign.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, I congratulate the Minister on doing exactly what a Lords Minister should: listening to what Members of this House say and then taking it back to her department and asking it to consider that. Could she give some advice to those sitting around her?

[Baroness Stedman-Scott]

I learned everything that I do at this Dispatch Box from these colleagues.

[Baroness Janke (LD)]

My Lords, the noble Baroness mentioned the charity Cruse Bereavement Care. Is she aware that in October 2019, Cruse commissioned research from YouGov about people’s experiences on being bereaved? Some 44% described their experiences as time-consuming, 39% stressful, 30% upsetting, 24% complicated and 16% traumatic. In the light of this and the experience of my noble friend Lady Ludford, will the Minister commit to taking a lead on addressing the needs of bereaved people? Will she provide some form of practical support for Cruse, a charity with very limited resources, in its campaign to treat bereaved customers first?

[Baroness Stedman-Scott]

I thank the noble Baroness for reminding us of those statistics, which should give us cause for concern. I have already pledged to go with the noble Baroness, Lady Ludford, to talk to Cruse; we will take up the points that the noble Baroness raised.

Disability Employment Gap

Baroness Stedman-Scott Excerpts

Wednesday 12th February 2020 Lords Chamber

[Lord Touhig (Lab)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my interest as a vice-president of the National Autistic Society.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, the employment rate for disabled people stands at 53.2%, having increased by 9.8 percentage points over the past six years. The employment rate gap between disabled and non-disabled people has fallen by 5.6 percentage points over the same period.

[Lord Touhig]

I welcome, as I am sure the whole House does, the improvement the Minister just told us about, but there has been no increase whatever in the number of autistic people in work—for the last 10 years. Just 16 in every 100 people who are autistic are in full-time employment. Addressing the lack of understanding about autism across business and industry is key to trying to solve this problem. Will the Government establish an information hub, providing employers with support and information to improve recruitment of autistic people? Could I tempt her to be even more daring and perhaps consider creating an autism accreditation scheme so that participating companies get full recognition for the efforts they put in?

[Baroness Stedman-Scott]

The noble Lord makes very accurate and real points. I spoke to the National Autistic Society this morning. Some 16% of autistic adults are in work and 32% of them are in some kind of paid work, but the real statistic is that 77% of unemployed autistic adults want to work. The noble Lord rightly pointed out that we must get to that figure. The disability hub is a great idea. I will go back to the department with yet another idea—their eyes roll now when I walk in, but I will do it. I will not be put off by that. I can confirm that the Government are also working with the Supported Business Alliance and the British Association for Supported Employment to help them develop a new quality mark for supportive businesses and develop a long-term element of access to work to continue the support. However, there is no doubt that we have a lot more to do and I will take both those ideas back to the department.

[Baroness Thomas of Winchester (LD)]

My Lords, we do not have any flesh on the bones of the national disability strategy yet. There are many issues involved in closing the disability employment gap: suitable housing, adequate care and better education opportunities, to name but a few. Will the Minister consider hosting a round table with Members of this House who have expertise in this subject, so that we have as much consensus as possible going forward?

[Baroness Stedman-Scott]

How can I say no to the noble Baroness? That is another great idea. It fits very well with the national disability strategy, which will, I am pleased to say, be developed with disabled people and disability charities and organisations, and will cover the areas outlined by the noble Baroness—housing, education, transport and jobs—so that people can improve their lives. I will be delighted to go back to the department, not to suggest a round table but to say that we are having one.

[Lord Shinkwin (Con)]

My Lords, can I add another idea to my noble friend the Minister’s list? It is testament to the influence of your Lordships’ House that only last week I introduced a Bill on exactly this issue, which already has the backing of major corporates such as EY and Enterprise Holdings. They know that there must be a level playing field for rewarding and incentivising best practice. Will the Minister take this idea back not just to her department but to the Government as a whole, for incorporation in the forthcoming employment Bill, so that the mandatory gender pay gap reporting duty is extended to other protected characteristics, including disability?

[Baroness Stedman-Scott]

I am going to start singing “I’ve Got a Little List” in a minute. I congratulate the noble Lord on his tenacity in this area. His work on Able to Excel and his Private Member’s Bill were excellent. In 2018, the Government published a voluntary reporting framework on disability, mental health and well-being in the workplace, aimed at large employers—those with more than 250 employees. In November, we announced the new level 3 of Disability Confident. We must work with businesses to crack that 77% of people who want to work. Employers create jobs; we must work closely with them. My noble friend’s work will help with this. I will arrange for him to come in and do the sell on that one.

[Lord Laming (CB)]

My Lords, in following up the point made by the noble Lord, Lord Touhig, about information for employers, does the Minister agree that often we are not asking for something profound or difficult? It is just tackling basic information about the subject. We could do a great deal with very little effort.

[Baroness Stedman-Scott]

I could not agree more with the noble Lord. I was on a project recently where a young girl with bags of potential who had epilepsy thought she would never get a job because she thought that nobody would risk having her in their establishment. The people running the project found a lady who ran a business and who was epileptic. She said, “You send her down to me.” She is now employed as a legal secretary. That did not take a great deal of effort. The way for us to make headway with those statistics is by remembering that everybody is an individual and by spending time working out a strategy for the individual.

[The Lord Bishop of St Albans]

My Lords, in this important area Britain is proud to be a leader in many ways—in technology, computing and so on—and many of these projects, which are transforming the lives of some people with certain kinds of disabilities, have been run across Europe, so there are worries that some of these projects may not continue. Can the Minister assure the House that priority will be given to helping this world-leading development continue? It is making an impact on people with disabilities not only in our own country but right across the world as the technology is rolled out.

[Baroness Stedman-Scott]

Whether our people have a disability or they are well able, the jobs that we want them to get into will focus on technology in the future. I cannot give a categoric assurance that those projects will continue, but I can give a categoric assurance that we will continue to focus on the tech industry. I will go back and ask another question and, if I survive that, I shall write to the right reverend Prelate and let him know the outcome.

Pension Schemes Bill [HL]

Baroness Stedman-Scott Excerpts

Tuesday 4th February 2020 Lords Chamber

Moved by

[Baroness Stedman-Scott]

That it be an instruction to the Grand Committee to which the Pension Schemes Bill [HL] has been committed that they consider the bill in the following order:

Clauses 1 to 6; Schedule 1; Clauses 52 to 57; Schedule 4; Clauses 7 to 17; Clauses 58 to 68; Clauses 18 to 23; Clauses 69 to 74; Clauses 24 and 25; Clauses 75 and 76; Clauses 26 to 30; Clauses 77 to 81; Clauses 31 to 44; Schedule 2; Clause 45; Clauses 82 to 95; Schedule 5; Clause 96; Clause 46; Clause 97; Clause 47; Clause 98; Clause 48; Schedule 3; Clause 99; Schedule 6; Clauses 49 to 51; Clauses 100 to 116; Schedule 7; Clause 117; Schedule 8; Clauses 118 to 120; Schedule 9; Clauses 121 to 123; Schedule 10; Clauses 124 to 128; Schedule 11; Clauses 129 to 131; Title.

Motion agreed.

Universal Credit

Baroness Stedman-Scott Excerpts

Tuesday 4th February 2020 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given to an Urgent Question in another place on the extension to the universal credit implementation date. The Statement is as follows:

“Mr Speaker, the Secretary of State and I informed Parliament yesterday that we have revisited our forecast for universal credit and are extending its completion date to 2024. Our planning for universal credit relies on assumptions about the number of people whose circumstances will change each day, thereby naturally migrating. Our forecasts to date have relied on 50,000 households experiencing a change in circumstances each month. Based on this, we had predicted that the process of natural migration across to universal credit would be completed by December 2023.

However, the information collected on changes to people’s circumstances suggests that natural migration is happening less frequently than we expected. This suggests broad stability in people’s lives and can be attributed to a number of reasons, including the robustness of the labour market. We now estimate that 900,000 fewer households will naturally migrate between now and December 2023 than we had forecast. Given that we expect to manage around 100,000 households to universal credit each month, it necessarily follows that if we are to protect the interests of claimants and move them to universal credit safely, it will take a further nine months to complete the implementation of universal credit.

I can assure colleagues that claimants will not lose money from their universal credit award due to this forecasting change. We will always put the best interests of our claimants first and, as we move into the managed migration phase, protecting the vulnerable will be our utmost concern.”

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Answer. Universal credit should have been rolled out by April 2017. It will now be September 2024—seven and a half years late. There have been many delays. After each one, Ministers normally get up and say something like: “We’d rather be right than on time.” At this stage, I would settle for either. We are not very close to either of these happening.

We were told in the Statement and the noble Baroness’s letter that the reason for the delay this time was that fewer people had had a change in their circumstances that meant they moved across to universal credit early rather than waiting for their benefits to be shut down. That was due to good news, like the labour market. Alongside the official Statement, yesterday the BBC—which is filming in DWP for a series on universal credit—filmed the director-general in charge of universal credit, who said this:

“We’ve got a lot of anecdotal evidence of people being scared to come to universal credit.”


This is another way of thinking about the delay.

People are scared, but in the Commons today the Minister blamed the Opposition for scaremongering, which I find disappointing. I am relieved to be in the House where I know the Minister will not try out a line like that. People are scared because universal credit is full of problems. They are especially scared because you wait five weeks for your first payment. You can get an advance, but that is just debt that gets taken off your universal credit week by week. People can only live on it as it is, so they are scared of that as well. I have only one question for the Minister: will the Government please abolish the five-week wait in universal credit once and for all?

[Baroness Stedman-Scott]

My Lords, the five-week wait is a cause for concern for many people; I am not denying that at all. I have been out on visits and spoken to various work coaches and Jobcentre Plus staff, and I am assured that if people come with the right paperwork—I accept that some do not—and need an advance there and then, they will get it. I accept that it has to be paid back. At the moment, many people are raising the five-week wait. I hope all noble Lords believe that we are listening. We are aware of the vulnerability of the client group, but our work coaches are doing a great job. We are listening and hearing.

[Baroness Janke (LD)]

My Lords, I do not know whether Ministers are aware, but Macmillan Cancer Support has observed that the five-week wait is preventing cancer patients taking up their entitlement to universal credit. It is not that they would not have a loan—of course they would—but, as a result of their circumstances, they do not have the savings and resources to pay the money back when they have to. People lose a lot of money when they have cancer. They would like to know what the Government will do to look into the causes of this delay, what they will do to look into the five-week wait, what evidence they will provide us of the need for it, and what analysis has been done on the rollout of the universal credit managed migration period altogether. I would be grateful for her answers.

[Baroness Stedman-Scott]

I accept that people with cancer have enough on their minds without having fiscal worries. If the noble Baroness could give me the details of someone at Macmillan, the best I can do is invite them to the department to have a full and frank discussion about the issues. We will incorporate the remaining questions that she raised. All I can say again and again is that the department is reviewing these matters daily. I know that it cannot come quick enough for people, but we are listening and really researching the points the noble Baroness made, which are valid.

[Viscount Hailsham (Con)]

My noble friend said that those seeking a loan have to bring the appropriate papers. Would my noble friend be good enough to say what those papers are?

[Baroness Stedman-Scott]

I am not able to give my noble friend a list off the top of my head but I am very happy to write to him. If people do not have the paperwork, they are not just sent away to get it—the work coaches actively try to help them to get it.

[Baroness Lister of Burtersett (Lab)]

My Lords, the Minister’s helpful letter to Peers ends by saying that the Government have always said they will proceed with each new phase of universal credit only when it is safe to do so. Civil society organisations working with claimants are clear that it is not safe to proceed further with natural migration because of the recurring problems with it and with universal credit itself, which might explain reports that many people are scared to move to UC. Will the Minister, who I know does listen—I am grateful to her for listening to me this morning—take the message back to the department that it should be using this delay constructively to pause, address these problems and, if necessary, delay further in the best interests of claimants to get it right?

[Baroness Stedman-Scott]

The noble Baroness knows that I will certainly take that point back to the department. However, I would like to share something with noble Lords. I have been making lots of visits and meeting lots of clients, not just work coaches. We know there are issues with resolving universal credit. That is why we are extending the period, because we are not in the business of going full blast ahead with something that will go wrong and make life more difficult for people. However, one of the things that comes up time and again—I promised that I would say this to noble Lords when I got the chance, but I did not realise that I would get it so quickly—is that work coaches are saying to us that, while there are issues, a lot is going right with universal credit. It is making a difference to people’s lives and getting them into work, it is personal and one to one, and it is really doing well, so please can you help by trying to balance the observations made about universal credit? As to a further delay—I never thought I would get that today—it is best to say that I am unable to commit to one and I jolly well hope that it will not be necessary.

[The Lord Bishop of Durham]

My Lords, can we honour the DWP staff for allowing the BBC in? Many of us look forward to seeing what comes out. They have been very brave; many departments do not do that. I understand that the Minister does listen but some of these things have now been going on since the system’s very inception. Yes, many people at food banks and people who talk locally say that the work coaches are doing a wonderful job. That is great, but it is the most vulnerable who are suffering. Could we please listen to their voice and make some changes very rapidly?

[Baroness Stedman-Scott]

I can give a commitment that we are listening to the most vulnerable. We will make changes as soon as we can, once they have been agreed. There is nothing in it to delay things or to make life worse for people. I certainly do not want to be a Minister who is known for that.

On food banks, I have no doubt, and the previous Secretary of State confirmed it, that usage of food banks was up due in part to universal credit. I do not run away from that point. Last Thursday I sat down in a food bank in Hastings called The Pantry. I will arrange it for any noble Lord who wishes to go there, because it is a most dignified example of a food bank. I asked them: “Why do people use it?” Relationships break down, or people’s priority is to fund their addiction. When their money comes through from universal credit, they are at the cashpoint at 1 am or 2 am to get the next fix or the next drink. One person left a job on a Friday, went to a new job on Monday and by Monday evening it was all over. He found himself in a very difficult position. All credit to the food banks for what they do, but please, do not lay the increase completely at the door of universal credit.

[Baroness Watkins of Tavistock (CB)]

My Lords, are we collecting any central statistics on the increasing rent arrears for some people on universal credit? There is a real challenge, particularly for people in London, where rents are high in relation to universal credit. We are very concerned that some people are going without food in order to pay their rent.

[Baroness Stedman-Scott]

I thank the noble Baroness for raising what is another very valid point. Rent arrears is a problem, but the majority of arrears were incurred with the legacy benefits. It is not just universal credit. I am not saying that there is not a contribution, but 12% of social-rented households are on universal credit. It cannot be laid entirely at that door, but the issue is live, and we are on it.

Pension Schemes Bill [HL]

Baroness Stedman-Scott Excerpts

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

Moved by

[Baroness Stedman-Scott]

That the Bill be now read a second time.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, I take this opportunity to thank all noble Lords for the positive engagement and feedback they have provided over the past couple of weeks and since the Bill was originally introduced in October last year. From the conversations I have had with many noble Lords, I believe there is a genuine desire across the House to tackle the matters addressed by the Bill. It is my sincere hope that we can continue to engage in this way as the Bill progresses through this House. Should any noble Lord wish to discuss any part of the Bill between its stages, our doors are always open.

It is unlikely to have escaped noble Lords’ attention that this is not a small Bill, partly because we have also legislated for Northern Ireland. Now there is a functioning Assembly again we have been in contact with Northern Ireland Ministers to establish whether they are content in principle for Westminster to legislate on their behalf in this Bill. I believe it is important to ensure that the people of Northern Ireland also benefit from the changes and safeguards put in place for the rest of Great Britain.

Although the Evening Standard referred to the Bill in October as a morsel of “fresh legislative meat,” it is far more than that. It has been built on consensus across the pensions community and political spectrum and has consumer protection at its heart. It focuses on a range of key measures that are a priority today, not just for those who are already receiving a pension, but for record numbers who are now saving for their retirement. This Bill will help people plan for the future, provide simpler oversight of pensions savings and protect people’s savings by providing greater powers for the Pensions Regulator to tackle irresponsible management of private pension schemes.

Before I talk a little more about the measures in this Bill and why they are so important, I would like to touch on delegated powers. I know from talking to noble Lords that there are some concerns about the number of delegated powers in the Bill and how they may be used. There are a number of good reasons why we have structured the Bill the way we have, and we will respond fully to any concerns the DPRRC may have when we reply to its report. However, I have listened to what your Lordships have said to me and have asked my officials to prepare illustrative regulations under Part 1 before we reach Committee. I hope that they will help your Lordships understand the way delegated powers in that part are intended to be used and the limitations in pre-empting their use.

The measures in this Bill build on the reforms of the past 10 years, and I shall take a few moments of noble Lords’ time to explain how. On Part 1, which relates to collective defined contribution schemes, which are known as CDCs, current UK pensions law defines all private pension benefits as either money purchase, where investment and longevity risks are shouldered by the individual member, or as non-money purchase, where all risks are born by the sponsor, usually an employer or insurer. Current pensions legislation means that new types of pension schemes have to fit within those two definitions. This stifles innovation and prohibits new kinds of risk sharing.

Part 1 sets out the regulatory framework for new collective money purchase schemes. These are more commonly known as collective defined contribution schemes or CDCs. In developing these measures, I welcome the cross-party and external stakeholder support for the methodology and the legislative approach that the Government have used. The measures facilitate, and build upon, the initiative between the Royal Mail and the Communication Workers Union which have concluded that a CDC scheme would best suit their needs for the future. I put on the record our thanks for the constructive and supportive way in which both Royal Mail and the Communication Workers Union have engaged in developing these measures. It is right for us to support employers and unions working together to bring about such a positive outcome. The scheme will be the first of its type in the UK, and it offers a model for other employers and other workforces to launch their own schemes.

There has been some interest in CDC provision from other unions and large commercial master trusts. However, we believe that this new type of provision and the supporting regulatory regime need time to bed in before a decision is made on whether multiple employer, sector-specific or commercial CDC provision should be facilitated. Nevertheless, the Bill provides for us to adapt the legislation, where appropriate, to extend the framework in the future.

These new schemes will enable contributions to be pooled and invested to give members a target benefit level. They aim to deliver for members an income in retirement without the high cost of guarantees and without placing unpredictable future liabilities on the employer, and they will give employers new options for managing their pension obligations.

In its press release on the Bill’s introduction in October, the Pensions and Lifetime Savings Association said that CDC schemes

“offer employers increased flexibility and choice in how they structure schemes to benefit savers.”

Further, Hymans Robertson commented:

“Providing a framework for collective money purchase schemes … will offer the clear benefits that can be derived from pooling of these risks across individuals.”


I hope that we can all welcome these measures, which enable employers and workers to come together in a way that will benefit both.

I move on to CDCs in Northern Ireland and shall focus briefly on Part 2 of the Bill. As noble Lords know, private pensions are a devolved matter for Northern Ireland. Throughout the development of this Bill, Ministers and officials have worked closely with the Northern Ireland Office and the Department for Communities, Northern Ireland. In the absence of an Assembly, the Department for Communities has asked the UK Parliament to include provisions for Northern Ireland in the Bill. This will ensure regulatory alignment across the UK and parity for pension schemes and their members in Northern Ireland. Part 2 and other clauses embedded in each part of the Bill therefore make provision for corresponding Northern Ireland legislation.

Moving on to the Pensions Regulator, several recent high-profile insolvency cases in relation to defined benefit pension schemes have weakened confidence in the pensions system. They have highlighted that the existing regulatory regime is not always an effective deterrent to serious wrongdoing. Doing nothing will mean that more people are likely to be affected by employers not taking their responsibilities seriously, and the existing fines that the Pensions Regulator can pursue are an ineffective deterrent to more serious wrongdoing. In order to amend the existing powers and provide the regulator with new powers, changes and additions must be made through primary legislation. Not doing so will mean that the current gaps and problems continue to exist.

Part 3 addresses that and fulfils a commitment that we made in 2017. It places a requirement on those responsible for corporate transactions to set out in a statement how they will mitigate any adverse effects on the pension scheme. The measures will improve the regulator’s information-gathering powers, enabling it to enter a wider range of premises and require individuals to attend an interview. This will boost the regulator’s ability to ensure that those responsible comply with pensions legislation. There will also be new civil and criminal sanctions to punish those who wilfully or recklessly harm their pension scheme, including a maximum seven-year prison sentence and a civil penalty of up to £1 million.

I know that some noble Lords have expressed concern about the adequacy of the sentences outlined in the Bill and have advocated even tougher ones. We have set the maximum level of the financial penalty at a level similar to equivalent sanctions in the financial sector for financial crimes. However, we also recognise that there might be a need to increase this maximum amount in the future to ensure that the financial penalty continues to provide suitable levels of deterrence and punishment. The Bill therefore includes a regulation-making power enabling the maximum amount of the financial penalty to be increased if needed in the future.

Charles Counsell, the chief executive of the Pensions Regulator, said of these measures:

“Fines and criminal sanctions, combined with improved avoidance powers, have the potential to act as a strong deterrent in respect of behaviour that represents a risk to savers.”


The Pensions and Lifetime Savings Association was also clear, saying:

“While most pension schemes are well-run and managed, high-profile cases like Carillion and BHS damage confidence in the pensions system. We support new powers for the Pensions Regulator to take action sooner, impose significant fines, and have more oversight of risky corporate transactions in order to prevent reckless behaviour and protect savers’ hard-earned money.”


Cumulatively, the improvements to the regulator’s powers outlined in this Bill will help the regulator to meet its aim of being “clearer, quicker, and tougher”. In turn, this will afford increased protection for defined benefit scheme members’ savings.

Part 4 of the Bill delivers on our commitment to provide for pensions dashboards. Many savers worry that they do not have adequate information or knowledge to enable them to plan and make decisions about their saving for retirement. This can be exacerbated by the fact that it can be hard for savers to keep track of pension savings where they have had multiple jobs. Dashboards will provide an online service allowing people to view all their pension information—including state pension—in a single place.

The measures in this Bill set out the legislative framework to define what a qualifying dashboard service is, along with requirements that must be met by potential dashboard providers. Importantly, they will compel occupational, personal and stakeholder pension schemes to present an individual’s pension information to them through a qualifying dashboard service. To make sure that they do, the measures also introduce compliance powers for enforcement of this requirement through the Financial Conduct Authority and the Pensions Regulator. Finally, Part 4 also provides for the Money and Pensions Service to oversee the development of the dashboard infrastructure.

As I said earlier, there is broad support for pensions dashboards. For example, Aegon has commented:

“Millions of individuals have multiple pensions in which they’ve built up benefits over their working lives and Pension Dashboards will for the first time allow them to see all of these, online at the touch of a button. This offers a huge opportunity to help millions of individuals better engage with their retirement planning”.


I turn now to Part 5 of the Bill. The measures within this part cover four important areas. Clause 123 and Schedule 10 relate to defined benefit scheme funding. The defined benefit landscape is changing, with many schemes now closed to new members and future accrual. As more schemes reach maturity, with fewer contributing members and more members receiving their pension benefits, it is important that we act now to ensure that trustees manage their funding and investment in a way that is appropriate to the specific characteristics of their scheme.

The measures in the Bill will enable the Pensions Regulator to enforce clearer scheme funding standards in defined benefit pension schemes. They will support the regulator’s risk-based regulatory approach by introducing a requirement for trustees to have a funding and investment strategy for the scheme, and for the statutory funding objective to be achieved consistently with this strategy. The measures also require trustees to explain their approach to the regulator in a statement of strategy. The measures can require trustees to send this statement to the regulator at such occasions and intervals as may be prescribed.

These provisions seek to help trustees to improve their scheme funding and investment decisions, and to better manage potential risk. They enable the regulator to take action more effectively to protect members’ pensions, mitigate risks to the Pension Protection Fund, and take account of the sustainable growth of the employer.

Clause 124 introduces new powers to protect individuals’ pensions savings by helping trustees to prevent transfers to fraudulent schemes through restricting the statutory right to transfer a pension. This will protect members from pension scams by helping trustees of occupational pension schemes to ensure that transfers of pension savings are made to safe, not fraudulent, schemes.

Clause 125 rectifies some of the unintended outcomes of a High Court judgment. It retrospectively restores the policy intent with regard to the calculation of Pension Protection Fund compensation payments. The measure will provide statutory cover for past payments and will ensure that there is no question of vulnerable members being asked to repay any overpayments.

Clause 126 updates the definition of “administration charge” to make clear which costs are in scope of the overarching definition contained in the Pensions Act 2014.

I beg to move.

--- Later in debate ---

[Baroness Stedman-Scott]

My Lords, this has been an excellent debate with excellent contributions. I thank noble Lords for the time they have spent preparing and delivering those contributions. I thank everybody who has taken part. It has been encouraging to hear the positive responses to the measures this Bill proposes. Noble Lords have certainly laid down the challenges we need to address.

The noble Baroness, Lady Sherlock, asked me about our confidence in the Bill. We will have confidence in it if we all work together and turn every stone to make it fit for purpose. I pledge that the Government will do that, and I see no dissention from us working together to achieve that.

I shall deal first with delegated powers and the commitment I made to your Lordships that we will bring forward some examples in relation to Part 1. I do not use the word “trepidation” in conjunction with my noble friend Lady Fookes—it is quite the other way round—but I have her point about Part 3 and the point made by the noble Baroness, Lady Sherlock, about Part 4. We have a wonderful Bill team who are working incredibly hard, and if they tell me they will have them, they will have them.

I understand the concerns raised by some noble Lords in this debate that there are important legal principles at stake before the proposed delegated powers can be exercised properly. In many instances the Government have promised to consult further on the technical substance, particularly in relation in Part 1. There are also instances where there may be a statutory requirement to consult because of a connection to existing legislation. Where there is an intention, promise or legal requirement to consult on the substance of secondary legislation, the legal position is clear: the Government cannot prejudge the outcome. In opening this debate, I said that I have listened to what noble Lords have been telling me, and we are preparing illustrative regulations relating to Part 1 which will be available before Committee. I also pledge to meet noble Lords before Committee to discuss them and all the questions that I will not have time to answer. Noble Lords can see that I have them, so I am not trying to get out of doing the job.

I want to put to bed very quickly the question asked by the noble Baroness, Lady Bryan, about whether we have any plans to increase the state pension age to 75. This is not government policy. The recent independent report recommending raising the state pension age to 75 is not a government report. I hope that gives her comfort.

The multiple dashboard point was raised by numerous noble Lords. The noble Lord, Lord McKenzie, made the point that there should be a single, government-run, non-commercial dashboard to protect consumer interests. We agree that there should be a dashboard that has no commercial aspect. The Money and Pensions Service has made a commitment to deliver such a dashboard.

The noble Lord, Lord McKenzie, asked whether the CDC is just a backdoor to allow employers to close defined pension schemes and impose collective pensions. CDC schemes are unlikely to work well unless the employer and employees are comfortable with the approach. I am sure that employers with open defined benefit schemes are well aware of that. The CBI’s response to our consultation on CDC makes interesting reading. It said that CDC has advantages for both employers and employees and welcomes the opportunity that CDC presents to help fill the gap between defined benefit and current defined contribution schemes.

The noble Lord, Lord McKenzie, was very busy in this debate. He asked why we have not implemented the 2015 Act. Our approach to CDC schemes has developed since, and after much scrutiny we concluded that new primary legislation is necessary to ensure that we get the CDC exactly right for the United Kingdom.

The noble Lord, Lord McKenzie, and the noble Baroness, Lady Warwick, asked why our superfund is not in the Bill. Developing the new regulatory framework for superfunds is a complex task and we are working hard across government and with relevant stakeholders to build consensus on the right approach. We aim to publish shortly our response to the consultation which will set out in more detail our proposals for a future legislative framework. Once this work is completed, we will legislate as soon as we can.

The noble Lords, Lord Sharkey, Lord McKenzie and Lord Vaux, and the noble Baronesses, Lady Donaghy and Lady Janke, raised intergenerational fairness. Fairness between age cohorts has been one of our key considerations from the beginning of our work on CDC schemes. That is why we intend to bring forward scheme rule requirements using regulations under Clause 18. This will ensure that all members, whether active, deferred or pensioner, will share the effects of investment outperformance and underperformance in the same way every year. Should a scheme’s rules not be compliant, it will not be authorised to operate by the regulator.

The noble Lord, Lord McKenzie, and my noble friend Lady Noakes asked how many employers are considering CDCs. It is true that only one company is, namely Royal Mail. However, others are interested. We want to make sure that CDCs work before any future increase.

The noble Lord, Lord McKenzie, asked about automatic enrolment and what the Government are going about the gender pensions gap. Automatic enrolment has been a great success and is already having an impact on the gender pensions gap. Participation in pension saving among eligible women in the private sector has risen from 40% in 2012 to 85% in 2018, which is equal to the figure for men. We have made great progress on that.

[Baroness Drake]

The Minister is accurate. I do not disagree with her description of what is happening with women in the eligible population for auto-enrolment, but it is the millions not in the eligible population for auto-enrolment whom we are particularly concerned about and whom those figures do not address.

[Baroness Stedman-Scott]

The noble Baroness, Lady Drake, is absolutely correct and I am glad that she pointed out the difference to me. I would like to meet her before Committee to address that issue, if she is happy to do so.

The noble Lord, Lord McKenzie, asked why the Government have not legislated for the measures in the 2017 automatic enrolment review in this Bill. The Government have set out their ambition to lower the age at which people are automatically enrolled from 22 to 18 and to abolish the AE lower earnings limit in the mid-2020s. Our approach will be to expand the coverage and increase the amounts put into retirement savings by millions of working people, focusing on younger people and lower earners.

The noble Baroness, Lady Donaghy, and the noble Lord, Lord McKenzie, raised the subject of the self-employed. The 2017 automatic enrolment review concluded that the current automatic enrolment framework is not suitable for the self-employed. They are a highly diverse group and one solution will not necessarily fit all. The Government have committed to carrying out research trials to form the evidence base and future policy.

The noble Lord, Lord Sharkey, asked what the Government are doing to tackle investment scams—an issue raised by other noble Lords. These scams are outrageous. The Government are committed to raising awareness about pensions scams to help protect consumers. As part of this, the Financial Conduct Authority launched its ScamSmart campaign to raise awareness of the steps that people can take to avoid investment scams. During the campaign, 173,000 users visited the ScamSmart site, and 376 users were warned about an unauthorised firm.

The noble Lord, Lord Sharkey, raised the need for a stronger nudge towards guidance, as provided for in Sections 18 and 19 of the Financial Guidance and Claims Act 2018. In that Act, we committed to test different approaches to providing a stronger nudge towards Pension Wise guidance. Pension Wise began this work on Royal Assent of the Act and it was picked up at the launch of the Money and Pensions Service. Trials commenced in October 2019. We are on course for those trials to finish and for qualitative work to be undertaken ready for the publication of the evaluation report in the summer.

Many noble Lords raised the question of whether there should be one dashboard or multiple dashboards, and the views on that were mixed. My noble friend Lady Fookes asked why there should not be just one, but I was interested to hear the noble Lord, Lord Sharkey, say that multiple dashboards will give consumers more choice in where they access pension information. Multiple dashboards will help to meet the varied needs of the 24.5 million people with pensions and wealth. I am sure that this is a topic on which we will have extensive discussions prior to and during Committee.

The noble Lord, Lord Vaux, made the point that the payment of dividends will not be a notifiable event. It would be disproportionate to require every dividend payment to be notified to the regulator. Hindering dividend payments could affect pension schemes, as many are shareholders in companies with DB schemes.

The noble Lord also raised the Dutch scheme. Despite communication issues in Holland, for generations the Dutch scheme worked as though it were a DB scheme. Where adjustments needed to be made, these came as a surprise. We will ensure that in communications to members, particularly at key points throughout a member’s pension scheme journey—on joining and annually, and before and during retirement—CDC schemes are clear and transparent that benefit values may go down as well as up.

The noble Lord, Lord Vaux, asked what safeguards there are to ensure that transfer values are fair. The cash equivalent transfer value represents the actual calculated cash value of providing members’ benefits within the scheme. Legislation provides a framework for the calculation of transfer values that trustees must follow.

The noble Lord also asked why companies should not be stopped from paying dividends if their pension schemes are in deficit. We do not believe that it is sensible to stop companies paying dividends to shareholders, even when a scheme is in funding deficit. Government intervention to block dividend payments could discourage investors and weaken the business, further reducing the security of the defined benefit scheme.

The noble Lords, Lord Vaux and Lord Sharkey, and others raised a lot of questions on that subject. It is not that I am not trying to give an answer; it is just that I am unable to do so at the moment, but I will get back to them.

My noble friend Lady Altmann asked what the sanctions will be for pension scheme providers who do not comply with compulsion. If a pension scheme provider fails to comply, it might be subject to penalties, including fines. The regulator will have a range of powers, including issuing compliance notices, penalty notices and fines.

My noble friend also raised the question of simpler annual benefit statements. The industry delivery group will consider the outcome of the consultation on simpler statements when making recommendations on the information to be included on dashboards.

I pay tribute to my noble friend Lady Altmann, whose tenacity on net pay allowance and tax relief is legendary. She has taught me everything that I know about it. That was a matter raised also by the noble Lord, Lord McKenzie. I am not trying to get out of anything here but it is a matter for the Treasury. However, the Government recognise the different impacts of the two systems. To date, it has not been possible to identify any straightforward or proportionate means to align the effects of net pay and relief at source. However, as announced in our manifesto, the Government will conduct a comprehensive review of how to fix this. We say that we will do it.

My noble friend Lady Altmann asked whether the new scheme’s funding requirements support the plumbing pension scheme. I am afraid that I am not able to give a response to that at the moment but I would love to meet her and give her the information that she requires, as well as making it available to other noble Lords.

I am taking a moment to look through my responses in an attempt to be fair to all noble Lords, although I do not think that I am doing a great job.

The noble Baroness, Lady Drake, raised the important point of carer’s credit and the family carer top-up. The Government recognise the valuable role of carers and the fact that they are disproportionately women. The Government Equalities Office gender equality road map, published in July 2019, set out plans to support carers. They included helping people to return to work after taking time out for caring. We are working closely with colleagues in the Money and Pensions Service to empower people to take informed decisions about saving throughout their lives. I am sure that we will revisit this very soon.

We have talked about the gender pay gap—a matter raised by the noble Baronesses, Lady Drake and Lady Bryan. As I said, automatic enrolment has helped lots of women—I have given the statistics. We want to empower them to take informed decisions about saving throughout their life, but we have made progress in bridging the gap.

The noble Baroness, Lady Drake, talked about the consumer protection regime. The Government recognise that the regulation of dashboard providers is critical to maintaining public confidence. My department has been working with HM Treasury and the FCA to decide how best to ensure that the regulatory regime is appropriate and robust.

The noble Baroness, Lady Drake, also raised the important issue of the security of data on pension dashboards. Ensuring the security of data is key to establishing consumer confidence in the dashboards. The Government are committed to ensuring that the infrastructure includes a level of identity assurance that satisfies the good practice established for national cybersecurity.

The noble Baroness, Lady Drake, and my noble friend Lady Noakes raised the subject of the Pensions Regulator. They questioned the impact of the new criminal offences and wondered whether their scope was too wide. We do not want to stop legitimate business activity, such as lenders taking security for normal financing activities. The Government are clear that businesses must be allowed to make the right decisions to allow them to develop and grow.

The majority of employers want to do right by their scheme. However, we must ensure that sufficient safeguards are in place to protect members’ pensions from the minority who are willing to put them at risk—I mention no names. The Government are committed to the Money and Pensions Service providing a dashboard, and MaPS committed to providing a dashboard in its 2019-20 business plan.

I turn to the contribution of my noble friend Lord Young. His powers of foresight are legendary; I am envious, and I am sure that many in both Houses would like to have them. The same is true of his oratory powers; he is very eloquent and his Front-Bench contributions are much missed in this House. We will meet before Committee. Time is really getting on now. I will respond directly to my noble friend Lord Young on the points he raised, and will have an answer to the point raised by my noble friend Lord Flight on equity release.

My noble friend Lady Noakes asked whether there are adequate appeal processes. The answer is yes and I would be very happy to talk her through those at a later time. Her description of a “half-baked dashboard” is interesting. We undertook a significant consultation and got more than 120 responses. These were published in April 2019 and were taken into account during the development of the legislation. We will continue to seek all views as we develop regulations.

The noble Baroness, Lady Donaghy, raised a point about holders of multiple part-time jobs. Currently, where an individual does not earn more than £10,000 per annum in a single job but earns more than the lower limit of the automatic enrolment qualifying earnings band, they can opt in to a scheme in one job and receive the mandatory pension contribution from their employer on earnings over that level.

The noble Baronesses, Lady Hayman and Lady Jones of Whitchurch, talked about climate change. This is a subject close to our hearts and I will meet with them both to talk in more detail. The Government are absolutely committed to tackling climate change and recognise the concerns that have been raised. We have already introduced legislation to require pension schemes to state their policy. In building on this, the DWP continues to work with the industry.

On dashboards, we expect that initially there will be no more information than is already available; to start with, simple information will become available. The delivery group may make recommendations for adding more detailed information as the needs and interactions of users develop.

[Baroness Neville-Rolfe]

Before the Minister sits down, would she be willing to talk to us a little more about the detail of the subordinate legislation on dashboards? She kindly said that she would do that on the first part of the Bill, but several noble Lords are interested in the subordinate legislation on the dashboard.

[Baroness Stedman-Scott]

Of course, I will do that as soon as possible. This is an important Bill with a far-reaching impact on people. We will all work together in the House to get the legislation as we want it. I extend my invitation once again to all noble Lords who may wish to discuss any further issues before Committee. Our door is always open. I thank noble Lords for their contributions today. I commend the Bill to the House and ask that it be given a Second Reading.

Bill read a second time and committed to a Grand Committee.

Low-income Families: Benefits Freeze

Baroness Stedman-Scott Excerpts

Monday 13th January 2020 Lords Chamber

[Baroness Lister of Burtersett]

To ask Her Majesty’s Government what assessment they have made of the impact on low-income families of the four-year freeze in working age and children’s benefits.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Stedman-Scott) (Con)]

My Lords, the benefit freeze was designed to put welfare on a sustainable footing, incentivising work and making welfare fairer. We conducted a number of assessments at the time of the Welfare Reform and Work Act in 2016; it was estimated that 30% of households would be affected by the policy, but that no one should take a direct cash loss as a result of the freeze. We have continued to monitor the impact of our policies through publications such as the annual release on households below average income. The latest available stats show that the number of people in absolute poverty in 2017 and 2018 was lower than in 2010. The benefit freeze will come to an end in April 2020, benefiting more than 10 million people.

[Baroness Lister of Burtersett (Lab)]

My Lords, welcome as the end of the freeze—as required by law—is, it will do nothing to restore the significant losses suffered by millions in poverty, which are, on average, nearly £400 this year for families with children. Those losses have contributed to increased homelessness, reliance on food banks, and general poverty and hardship. Will the Minister, who I know cares about such matters, therefore undertake to press on the Chancellor the case for an above-inflation increase as a tangible and immediate way of making good the Prime Minister’s “one nation” election pledges to level up and help those reliant on food banks with the cost of living?

[Baroness Stedman-Scott]

I understand the points that the noble Baroness has raised—you cannot argue with them. One of the major contributing factors was that inflation was twice what we thought it was going to be. It is no excuse, but that was it. I am touched that she thinks I can influence the Chancellor; I will have a really good go and keep her posted. My door is open to talk about this further.

[Lord Farmer (Con)]

My Lords, over a decade ago the Joseph Rowntree Foundation proved that the tax credits approach to child poverty had run out of steam. How are this Government following the evidence on the root causes of child poverty, which include family breakdown?

[Baroness Stedman-Scott]

My noble friend makes a point about tax credits. While I have no doubt that they did a lot of good, some of their ramifications caused difficulty, in that we had an annual rather than a monthly reconciliation, as we are trying to have under universal credit. I believe that the monthly reconciliation under universal credit, while not perfect, is much better than waiting until the end of the year. On child poverty and family breakdown, obviously there are families who have great difficulty fiscally, and we have to try to help them, but the evidence shows that helping parents to move into and remain in work is the best option for moving them out of poverty. We want to see child poverty fall and remain determined to tackle it. My door is open for further discussion on this; I will do anything I can to move things forward.

[Baroness Janke (LD)]

My Lords, is the Minister aware that in August 2018, two-thirds of those who had benefits cut were single parents? Single parents in the bottom 20% income bracket will have lost 25% of their 2010 income by 2021-22. Ending the benefit freeze will not restore this, and half of the total number in single- parent families are in poverty. Does the noble Baroness agree that children in single-parent families are doubly disadvantaged as a result of government policies? What plans do the Government have to end this glaring injustice and to ensure that these children get a fair deal?

[Baroness Stedman-Scott]

Again, I understand the points that the noble Baroness makes. We can all recall incidents in our families—I can in my own; my niece is a single parent, and life is a challenge at the best of times. The benefit cap levels were put in place to try to restore some fairness to the system. Due to the election taking place, the levels were not reviewed in the last Parliament, but there remains a statutory duty to look at them, which will be done at an appropriate time.

[Baroness Sherlock (Lab)]

My Lords, the benefit freeze was not a reform but a straightforward cut: it simply cuts the value of certain benefits every single year, year on year, for five years. The result is that the welfare state, the point of which is to support children and families when the parents cannot earn money, is now providing a record low level of benefits compared to average wages. The basic JSA of £73 a week is just 14% of average earnings, according to the Resolution Foundation. When Beveridge started his system, the figure was 27%. We cannot have a welfare state in which, if you find yourself unable to work, you are literally thrown on to the scrapheap and become dependent on food banks. Therefore, if the Prime Minister, as he said, believes that austerity was the wrong choice, is not the logical step to accept that, since these cuts should not have been made, they should now be made good?

[Baroness Stedman-Scott]

I would not want to contradict the noble Baroness—I have the greatest respect for her—but I think the Prime Minister said that austerity must stop, and that it was necessary at the time. I do not want to go over all those arguments again. In the eight years following the financial crisis and leading up to the benefits freeze, jobseeker’s allowance grew by 21%, whereas median earnings grew by only 12%. We want a welfare state that works for people and enables them to have a decent way of life, but the legacy benefit system was unsustainable, and I am afraid we have taken very difficult decisions to try to balance it out and to make work pay for people. I know that the noble Baroness does not agree with me, but we now have more people in work than we have ever had—

[Noble Lords]

No.

[Baroness Stedman-Scott]

We have. I am sorry—it is a fact. We have more people in work than ever before, and—

[Baroness Jones of Moulsecoomb (GP)]

Zero hours.

[Baroness Stedman-Scott]

I can answer that one too. While noble Lords will not want me to read out a shopping list of things we have done—I know that it does not go down well—I will mention three things: reducing UC debt deductions from 40% to 30%, increasing the national minimum wage and cutting income tax. I am assured by officials that that has put another £2 billion per annum into people’s pockets.

[The Lord Bishop of Durham]

My Lords, in the coming years, the main driver in increasing child poverty will be the two-child limit. Low-income families are particularly detrimentally impacted by this. It is predicted that, by 2023-24, this policy will tip 300,000 children into poverty. What plans do Her Majesty’s Government have to stem the rising child poverty levels caused by current policies, primarily the two-child limit?

[Baroness Stedman-Scott]

The right reverend Prelate has been absolutely consistent on the issues around this particular benefit. I was delighted that he could come to our office to talk about them; he put the case to the Minister for Welfare eloquently. We have to keep on, okay? I stand by the right reverend Prelate in doing that. We must also keep on looking at other benefits to make sure that we make life better.