Universal Credit (Removal of Two Child Limit) Bill

Baroness Stedman-Scott Excerpts

2nd reading & Committee negatived & 3rd reading
Thursday 12th March 2026 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, I too am pleased to contribute to this important debate and look forward to the maiden speeches of the noble Baronesses, Lady Antrobus and Lady Teather, and the noble Lord Walker of Broxton. We welcome these wonderful people to our House and look forward to their contributions.

I feel I must set the scene and set it out very clearly. I say from the outset that we on the Opposition Benches do not support this Bill; in fact, we oppose it. That does not mean in any way that we do not care about children and families—quite the contrary. We believe there are other ways to support them that mean that money can be used differently to achieve the objective of improving their lives. I state publicly that I respect the consistency and tenacity of the Minister and, indeed, the noble Baroness, Lady Lister, in their campaigning in this area. We respect it. We may not agree with it, but we give credit where it is due.

We are far from alone in opposing the Bill. On this question, we stand with a clear majority of the British public. Polling consistently shows that more than 60% of people in this country support retaining the two-child benefit cap, with that support stretching across voters of all major political parties. What this debate increasingly appears to be about is not responsible public policy but political party management. As events over the past year have made clear, this measure is not being brought forward because the public have demanded it. Indeed, they are clearly opposed to it. We should all pause and consider why hard-working taxpayers are being asked to shoulder the financial consequences of the Government’s inability to manage their parliamentary party. That is not responsible government; it is a deeply troubling response from the Government to unrest.

Many across this Chamber will have their own principles and reasons for opposing this policy, but I begin with a simple illustration of what this policy and this debate mean in practice. Let us take the London Borough of Hackney. There, 29% of children live in households affected by the two-child limit without an exemption—the highest proportion anywhere in the country. As of August last year, there were 92 households in Hackney on universal credit with five or more children where the youngest child was born after the 2017 cut-off date. Unless they qualify for one of the limited exemptions, those households fall within the scope of the two-child limit. In other words, they already receive less than the maximum universal credit they would otherwise be entitled to. Yet even with the cap in place, these households receive on average £5,152 per month in universal credit. That is more than the take-home pay of someone earning around £88,000 a year. Across the country, the welfare bill for five-child households within the scope of the cap is already around £720 million per year. That is with the two-child limit still in place.

Set that against the reality faced by many working families. In Hackney and communities across the country, there are parents in work earning far less than that level of take-home pay who would love nothing more than to have a third child. But they sit down at the kitchen table, look at the household finances and make the heartbreaking decision that they simply cannot afford it. At the very same time, their taxes are funding households down the road who receive an income from universal credit that, in effect, exceeds their own. If this cap is removed, those households will not face the same choices about how many children they can afford.

I ask the Minister a simple question: how can that possibly be fair? How can it be right that working people supporting our economy and paying the taxes that fund the system must carefully limit the size of their own families while being asked to fund a system in which those not in work face no such constraint? That is the fundamental question of fairness at the heart of this debate, and it is why a clear majority of the public vehemently support the cap.

There is a wider point about economic development. More than this, what separates us on these Benches from the Minister and her Back Benches is our view that a handout is not the same as a hand up. The evidence is clear that the most effective way to tackle poverty is to provide people with the means and the incentives to provide for themselves. The single biggest factor in a child’s life chances is whether parents work, and removing the cap reduces the incentives to work altogether. That is clearly not a route out of poverty. Of course support should be targeted at those who need it—we have no argument with that—but it should not create a model where households on benefits are rewarded in a way no working family ever would be. That undermines both fairness and the incentive to work. As I have said, work is the only meaningful way that we will solve the problem of child poverty in the medium and long term.

When the incentive in place is to get more on benefits than working, why would you go to work? I am concerned by the view expressed by Labour Back-Benchers and the Government that increasing the generosity of the welfare offer in some way solves the issue of poverty. This approach does nothing but provide a sticking plaster to mask the fact that a dramatically increasing number of people rely solely on the state for their subsistence. This comes at a major and increasing cost to those who work and contribute, as the Spring Statement disturbingly underscored when it revealed that welfare spending will rise by 5.8% this year to an absolutely staggering £330 billion—around 11% of GDP.

My party has been clear. We would reinstate the two-child cap. Only last week my right honourable friend, Kemi Badenoch, the leader of our party, set out why. The savings from this policy could be redirected toward one of the more fundamental responsibilities of any Government—the protection and defence of the realm. Again, I stress that it does not mean that we do not care about children and families, but those savings would allow the recruitment of 20,000 additional soldiers and fund the accommodation, equipment and support they need to do their jobs properly at a time when the demands on our Armed Forces are growing and the world is becoming more uncertain. That is a central priority.

After the extraordinary spectacle of recent weeks, when the world has seen the Government unable and unwilling to defend British sovereign territory, the case for properly funding our Armed Forces has become more urgent than ever. Our defence should not be an afterthought. It should be the first duty of the state.

That is why it is so troubling that money that could be strengthening our national defence is instead being spent to manage the Government’s internal policies and politics. The country is being asked to foot the bill not because the policy case has been won but because the Government and the Chancellor have chosen not to pursue the welfare reforms they themselves once supported because they are too weak to get them past their own MPs. Do His Majesty’s Government have any plans to review the welfare state and to change it to a system that incentivises people to work, rather than live permanently on benefits? The defence of the nation should always come before the management of the governing party but, unfortunately, the policy we are discussing today is a manifestation of just that.

Ultimately, this debate comes down to three simple principles: fairness, responsibility and the Government’s priorities. It is about fairness, because it cannot be right that working families who get up every day, pay their taxes and carefully weigh what they can and cannot afford for their own children, are asked to fund a system in which those same choices do not apply. A welfare system that loses sight of that basic sense of fairness will quickly lose the confidence of the people who sustain it. It is about responsibility, because tackling poverty cannot mean simply writing even larger checks from the state. Real and lasting progress comes from helping people into work, strengthening incentives and ensuring that welfare is a safety net, not a substitute for independence. A system that blurs that distinction ultimately fails the very people it claims to help. It is about priorities, because every £1 spent by the state is a £1 taken from taxpayers and other priorities. At a time of enormous pressure on the public finances and growing threats in the world around us, the Government must be honest about where those resources should go.

This Bill fails on all three counts. It weakens fairness, it risks entrenching dependency rather than tackling its causes and it diverts scarce resources away from the fundamental duties of government. For those reasons, and in the interest of fairness and sound policy, these Benches cannot support the Bill. We urge the Government to keep the cap; it is what the country wants and what the country needs. I know the Benches opposite will not agree with me one little bit—I am under no illusions about that. I remind the whole House that you cannot make a poor man rich by making a rich man poor and you cannot help the wage earner by punishing the wage payer.

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[Baroness Sherlock (Lab)]

Indeed, and that probation officer clearly did a very good job: look where the noble Lord has ended up. Would that they were all that successful. I suppose that that is quite a high bar at which to set them, but I commend it. That is a really great point, and I am now violently agreeing with the noble Lord; but I will move on.

I want the social security system to do its job, and for most people its job is to support them into work, and in work, and to develop them in work. That is very much what this Government are seeking to do.

One of the challenges with universal credit is about assumptions. It was designed to move people into and out of work—to work in and out of work—and when it works it does so very well. All we are doing is making sure that the system works even better than it does. But the assumption that this Government are doing the wrong thing by spending money on tackling child poverty is fundamentally mistaken. My noble friend Lord Walker talked about the need to make sure we tackle NEETs, for example. We have one in eight of our young people not in employment, education or training. They did not start at 16.

[Baroness Stedman-Scott (Con)]

Will the Minister give way?

[Baroness Sherlock (Lab)]

Okay; it is going to be a long day.

[Baroness Stedman-Scott (Con)]

We are not saying that the Government should not spend money. It is about what you spend it on, and how it is spent to get the best outcome from what you are trying to do.

[Baroness Sherlock (Lab)]

My Lords, I understand that, but I have looked at what the last Government spent the money on and at the results, and I do not like them, so we are going to do something different.

My simple view is that if we will the end of tackling child poverty, we have to will the means. We believe that removing this barrier is fundamental. Those young people who were NEETs at 16 did not start at 16: they started without the opportunities, without the education, and without the start in life they should have had. The evidence shows quite clearly that children who grow up in poverty are likely to have poorer mental health, fewer opportunities and less chance to do all those things we want them to do. What we are doing is enabling those people to have opportunities, giving them the start they need. If we can get that in place, the whole country benefits. Instead of supporting people not to work, we are giving them the chance to flourish as individuals and to make the contribution to our society that they will not get the chance to make otherwise.

Before I get myself into any more flights of rhetoric, I should answer some of the questions that have been asked. My noble friend Lady Lister asked about council tax reduction. I think she knows this, but just for the record, local councils are of course responsible for designing and reviewing their own council tax reduction schemes. My department has been working with the MHCLG to communicate the change to local authorities, and they have been encouraged to consider the impact of their schemes in the light of the removal of the two-child limit. In 2029-30 an estimated 560,000 families will see an increase in their universal credit award, with these families gaining, on average, £440 a month. The impact of transitional protection is included in the impact assessment, but not on the numbers of households.

The benefit cap was raised by my noble friend Lady Lister, and by the noble Baronesses, Lady Teather and Lady Bennett, and by my noble friend Lord Davies and a few others. This Government want to preserve the fundamental principle that work is the best route out of poverty. We believe that leaving the overall benefit cap in place encourages personal responsibility while maintaining the incentive to work. Where possible, it is in the best interests of children to be in working households. Being in work substantially reduces the chance of poverty: the poverty rate of children living in households where all adults are in work is 17%, compared to 65% for children who live in households where no adults work. We will continue to protect the most vulnerable—those who are unable to work because of a disability or a caring responsibility are protected and exempted from that.

The noble Baroness, Lady Bennett, asked about numbers. When I answered her Written Question, the impact assessment had not been published at that point. I can say that among households in scope to gain from the removal of the two-child limit in 2029-2030, approximately 50,000 are estimated to be capped before the policy change, and a further 10,000 households will be capped afterwards. In contrast, 550,000 households in Great Britain will gain in full from the removal of the two-child limit in 2029-30, as will an estimated 2 million children in the United Kingdom.

The noble Baroness, Lady Janke, and my noble friend Lady Shah raised the impact of poverty on children and schools—

Pension Schemes: Ministerial Powers

Baroness Stedman-Scott Excerpts

Wednesday 11th March 2026 Lords Chamber

[Baroness Sherlock (Lab)]

As the noble Baroness well knows, we have been discussing this matter for some weeks now in Committee and will be discussing it again on Monday, when we come to the matter on Report. Let me give her a brief answer to the points she has made. I know that she agrees with the Government’s objectives, because she herself has advocated previously—indeed, in Committee—that we make pension tax relief contingent on 25% of new investment being allocated to UK assets. I know she wants the same thing that we do.

To be really clear, the power is being taken as a reserve power to back the voluntary, industry-led Mansion House Accord, which said that by 2030, 17 of the largest pension schemes in the private pensions sector would be investing 10% of their relevant default funds into private investment, with half of that in the UK. The expectation is that having done that, the industry will do it. The reason for taking a reserve power is, as the noble Baroness knows very well, that the challenge in the UK is too often schemes compete on cost and not on value. There is always a risk that for some small competitive advantage, somebody may want to try to separate off from that, so the reserve power is signalling clearly to the industry: this is the direction of travel, so let us stay with it. All we are doing is backstopping that.

[Baroness Stedman-Scott (Con)]

My Lords, the Government say that this power is merely a backstop to the Mansion House Accord but that is a gross misrepresentation. The Pension Schemes Bill goes far beyond that and gives Ministers sweeping authority to mandate pension investments to whatever level they choose. The state should not be directing the allocation of private pension assets. Those decisions must be taken by trustees in the best interests of their members, not by Labour Ministers pursuing political objectives. This policy risks undermining confidence in the entire auto-enrolment system, which was built on the promise that people’s savings would be invested in their interests, not the Government’s. I ask the Minister a simple question: will the Government remove this dangerous and unjustified power from the Bill?

[Baroness Sherlock (Lab)]

There is a short and a long answer. The short answer is no. The long answer is that the Government have made it abundantly clear, because I have done it myself many times in Committee, what the purpose of the reserve power is: to backstop the Mansion House and trust commitments. My honourable friend the Pensions Minister and I have made it clear—he said it again this morning at a pensions conference—that we would make absolutely sure that the Government’s intention simply to backstop those agreements was there in the Bill. That is what the legislation is for, but I need to correct something in particular. This power does not direct schemes into specific assets or projects. What it does is set a broad framework aligned with the industry’s own voluntary commitments under the Mansion House Accord. Trustees retain full discretion over individual investment selection and the balance between asset classes. The role of a pension trustee has always been to exercise judgment, subject to constraints, and nothing in these provisions changes that.

Access to Work Fund

Baroness Stedman-Scott Excerpts

Thursday 5th March 2026 Lords Chamber

[Baroness Stedman-Scott (Con)]

My Lords, the Minister and I suffer from the same condition: an obsession with getting people into work and keeping them there. I hope the whole House shares an obsession with the same outcome. Nothing makes my heart sing more than knowing how many people we get into work, how many stay in work—particularly after a year—how much a job costs and how we can make sure we measure what we are doing. How does the department keep these outcomes under review and how does it ensure that expenditure in this area is demonstrably helping people enter and stay in work?

[Baroness Sherlock (Lab)]

I commend the noble Baroness for the really interesting and innovative work she has done in the past, and for her commitment to this area. It is always a pleasure to debate these issues with her. On value for money and the results of Access to Work, she will remember from her time in the department that the previous Government tried to look at how you assess the impact of this scheme, only to find that it is very difficult, because you do not have a counterfactual: you cannot have a control group who get no help at all and struggle on their own, and compare to see how the two groups are doing. The NAO flagged these issues to the department and we are very aware of them. We are looking all the time at how we reform the scheme in a way that helps individuals, demonstrates additional value for money and is not a substitute for what employers should be doing, but which none the less is not so bureaucratic that you cannot get the money you need. To reassure her, all those things are being taken into account in the review process.

Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2026

Baroness Stedman-Scott Excerpts

Monday 2nd March 2026 Grand Committee

[Baroness Donaghy (Lab)]

My Lords, I will be brief. This is somewhat of an anniversary for the noble Lord, Lord Jones, and me, albeit a very sad one. I think the noble Baronesses, Lady Sherlock and Lady Stedman-Scott, would be quite surprised if we did not turn up for it. I speak as a chair, for many years, of the mesothelioma oversight committee. I could recite the industries affected, but I will leave that to the Minister.

The only thing I want to add to what the noble Lord, Lord Jones, said, is to thank the noble Baroness, Lady Stedman-Scott, as well as the Minister. I remind the Committee that the noble Lord, Lord Freud, introduced the legislation, for which thanks are due. It is important to remember these things.

The average age of those diagnosed is 75 and over, for whom the payment sums, which look very healthy at the start of the table, are less than £20,000. If there is any reason for keeping these figures under review, rather than being automatic, it is the fact that they do not look very good any more. It would be much appreciated if something could be done about that.

[Baroness Stedman-Scott (Con)]

My Lords, I think this is about the fifth anniversary of me taking part in these uprating instruments. This year, for me, they are completely different.

When I started my charity, Tomorrow’s People, more than 35 years ago, the first lady I employed was absolutely outstanding. Last year, I received a letter from a lawyer, saying that somebody who had been employed by my charity had contracted mesothelioma and they wanted to talk to me about the buildings that we occupied. I got in touch with them immediately and said, “Yes, of course I will help. Could you tell me who it is?” They went back to the person and then came back to me to say that it was this lady, the very first one I had ever employed, who had got mesothelioma. It suddenly hit home that this was a disease that affected somebody whom I rated highly and had great respect for. She came here to see me for lunch and told me her story, and I have kept in touch with her. I expect—and hope—that she is watching what we are doing today. I want to say that it made the whole thing pretty personal.

I am pleased to say that we on these Benches support these two sets of draft regulations, which provide for a 3.8% uprating of the lump sum payments available under the mesothelioma and pneumoconiosis compensation schemes from April this year. These schemes remain a vital, no-fault safety net for those suffering from some of the most devastating industrial diseases. Mesothelioma and pneumoconiosis are cruel conditions, often emerging decades after exposure and, in many cases, at a point when it is no longer possible to pursue former employers through the courts. The provision allowing dependants to claim when a sufferer dies before making an application reflects the harsh reality and rapid progression of these illnesses.

Maintaining an inflation link is essential if these payments are to retain their real-terms value, particularly given the debilitating nature of these diseases and the financial strain that they place on families. The long latency period associated with asbestos-related illnesses makes statutory compensation schemes not merely desirable but necessary. Although there is no statutory duty to uprate these payments each year, successive Governments have taken the view that that is the proper course. I agree. Uprating in line with inflation is the least that justice requires, ensuring that compensation continues to provide meaningful recognition and practical support.

These instruments may be technical in form, but they are significant in human terms. For those confronting terminal illness as a consequence of historic workplace exposure, this support represents fairness, dignity and the acknowledgement of a debt long owed. We on these Benches therefore fully support the regulations before the Committee.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to all noble Lords for their helpful contributions to this debate. I confess that I would miss it if we did not gather once a year to talk about the impact of this, but I will come on to that in a moment. It is always a moment, and I appreciate that, from around the House, we have all come here to demonstrate the strength of cross-party support for these two lump sum schemes.

It was good of my noble friend Lady Donaghy to acknowledge the work of the noble Lord, Lord Freud, and others, as well as that of my late and much-lamented noble friend Lord McKenzie, who did so much work in this space for many years. My noble friend Lord Jones showed very well that, when it comes to anything in this space, we are standing on the shoulders of giants. He talked about the history of all the great Labour figures who knew that they came to Parliament to speak up for those who did not have a voice and those who had suffered at the hands of people who, in many cases, should have known better but, in some cases, did not know better. We learn as time goes on.

I remember my noble friend Lord Mann from a very long time ago as well. It is incredibly moving to think that his very first piece of casework was somebody who went on to die that day from one of these terrible diseases. As noble Lords will know, I am a priest in the Church of England, so I know what it is to be with people when they are close to death. It is a privilege as well as a challenge. To be able to take that experience and use it to advocate for others is what so many people go into politics for, so I commend my noble friend for being here to tell that story and to speak up for those who are not here and are unable to do the same.

Let me pick up on my noble friend’s point about process. This is a debate that we have regularly. Most years, somebody will suggest that we should put this into the annual uprating and then somebody else will say that we should not and give reasons why. On the reasons given today, the thoughts on the opportunity to debate these regulations and the point made by my noble friend Lady Donaghy about wanting to keep the amounts under review are interesting.

One thing I should say to my noble friend Lord Mann is that, if these payments were uprated automatically in the way that, for example, social security benefits are—these are almost always affirmative—they would still require affirmative regulations that have to be debated in Parliament. They could theoretically be rolled into a general social security operating order, but that would do the exact opposite of what my noble friend wants by putting them in with benefits rather than separating them out from benefits. Today is an opportunity for us to be here and to discuss this; either way, it would not make a difference to the claimants.

My noble friend made a wider point about understanding that these are not benefits. Of course, these schemes are quite different. Technically, they come out of what is known as departmental expenditure, rather than, like most benefits, annual expenditure. They are not benefits; they are compensation for something that people suffered but should not have done. My department offers a range of other financial support to people, including the main industrial injuries disablement benefit. Many people who get these diseases may have other costs as a result of their disability and may get things such as personal independence payments, the attendance allowance or other state benefits to cover their income replacement needs. The department wants to provide all the appropriate support for people who really cannot work as a result of injuries, while wanting to make sure that those who are economically inactive or unemployed are supported to get back to work, where they should be. We can help them to do that, and we should be expecting them to do that.

The noble Lord, Lord Palmer, asked about the amount. One of the reasons it is labelled as a percentage is that the amount any individual gets depends on the scheme and the age of sufferer at the point of death, so the amounts that people are paid are different. I can tell him the average amounts: under the 1979 Act scheme, the average award to sufferers was £14,700 and to dependants it was £11,500. Under the 2008 scheme, the average award to sufferers was £26,600 and £8,500 to dependants. That would have included a range of figures for individuals.

My noble friend Lord Jones asked me for the number of awards. For the record, under the 1979 scheme, there were 2,540, and under the 2008 scheme, there were 610. Those statistics are from the latest financial year for which figures are available.

On the point made by my noble friend Lady Donaghy, I recognise that there are many who want those amounts to be larger. All I can say is that the Government keep this under review and will continue to do so.

In terms of the comment from the noble Baroness, Lady Stedman-Scott, there is nothing that brings this home like knowing somebody affected by this, and being asked about the building in which, presumably, she also worked as well as the person she hired.

My noble friend Lord Mann talked about asbestos gloves. Some noble Lords will remember, and I remember, some of the horrific stories that have been told. I remember one of my noble friends talking about what happened onboard ships, where ratings were basically playing with balls of asbestos. There were stories of people trundling trollies down corridors of hospitals, porters and all kinds of things. There were stories about schools and all kinds of public buildings. There are people who are suffering simply for doing their jobs. Most of these jobs were in public service, serving the community and caring. The very least we can do is to make sure that they get appropriate levels of support.

I think that I have addressed most of the specific questions I was asked. I just want to finish on a positive note. I mentioned the work of the HSE in relation to awareness of exposure, but I would like to put some of the work that has been done elsewhere in government on the record. Quite often we discuss research, and we know how important research is in supporting individuals with these diseases. It is still the case that the life expectancy is incredibly low, especially by the time that people are diagnosed with diffuse mesothelioma. DHSC invests over £1.6 billion each year on research through the National Institute for Health and Care Research, and cancer is a major area of NIHR spending at £141.6 million in 2024-25.

Respiratory disease is a clinical priority within the NHS long-term plan. The aim is to improve outcomes for people who have these respiratory diseases through early diagnosis and increased access to treatment. NHS England has established 13 respiratory clinical networks across the country. These have been vital in providing clinical leadership for respiratory services and supporting services in primary care. Indeed, that continued investment in cancer research and support for people with respiratory diseases is key to reducing the numbers of families affected in the future and providing better support following a diagnosis.

I think that I have addressed all the questions that were asked. Once again, it is always a privilege to participate in this debate. I acknowledge the position of those who suffer from these terrible diseases and their families. The least we can do is carry on providing support. In light of that, I beg to move.

Pension Schemes Bill

Baroness Stedman-Scott Excerpts

Committee stage
Monday 23rd February 2026 Grand Committee

That is the contribution I want to make. I do not believe there is a problem with the law; the problem is helping trustees and, in my respectful view, we ought to get on with it now.

[Baroness Stedman-Scott (Con)]

My Lords, I am grateful to all noble Lords who have contributed to this debate. I recognise that these amendments are brought forward in a spirit of good will and genuine concern, and I thank all noble Lords for that. I turn first to Amendment 212 in the name of the noble Lord, Lord Sharkey, and to the amendment tabled by my noble friend Lady Coffey.

It is important that we approach this discussion with clarity about the framework that already governs occupational pension schemes. From my understanding, there is already a substantial and detailed regulatory architecture in place. First, schemes are required to maintain a statement of investment principles since the reforms introduced in 2019 and 2020. That statement must explicitly address financially material considerations, including environmental, social and governance factors. It must set out how climate change is taken into account, describe stewardship policies, including voting and engagement, and explain how such risks are integrated into investment decision-making. This is no longer optional; it is embedded in the core governance documents of the scheme.

Secondly, larger schemes are required to publish an annual implementation statement. This must explain how the policies set out in the statement of investment principles have in fact been followed. In other words, schemes must not merely declare their approach to environmental, social and governance matters but demonstrate how that approach has been put into practice. This has moved the framework from being purely policy-based to being demonstrably action-based.

Thirdly, schemes with £1 billion or more in assets, together with authorised master trusts, must comply with climate risk reporting aligned with the Task Force on Climate-related Financial Disclosures framework. This includes governance of climate-related risks, strategy for transition, scenario analysis, metrics and targets, such as carbon intensity, and annual public reporting. These are not light-touch obligations; they are detailed, prescriptive and public-facing requirements. Taken together, this represents a significant body of regulation. It requires trustees to consider financially material risks, including climate-related risks. It requires them to disclose how those risks are managed and to report publicly on progress and metrics.

Against that background, we should be cautious before layering additional statutory requirements on top of what is already a comprehensive regime. Trustees have fiduciary duties to act in the best interests of members, they must take into account financially material considerations, they are accountable to the Pensions Regulator and they operate within a framework that has been progressively more demanding in recent years. Trustees should retain the ability to determine, within that framework, which investments are in the best interest of their members.

Our task in this House is to ensure there is clarity, coherence and proportionality in regulation, and that we identify genuine gaps, rather than duplicate existing obligations. My aim in engaging on these amendments is precisely that: to ensure that we debate this matter with a clear understanding of the substantial framework that already exists, and to probe carefully whether there are specific technical deficiencies that require further legislative interventions. This is an important area, but it is equally important that we legislate with precision and with full awareness of the structure that is already in place.

[Baroness Sherlock (Lab)]

My Lords, I am very grateful to the noble Baronesses, Lady Hayman and Lady Coffey, and the noble Lord, Lord Sharkey, for introducing their amendments, and all noble Lords for contributing to a very interesting discussion. I will start with Amendment 212 from the noble Lord, Lord Sharkey.

While I recognise the aim behind this amendment, the Government believe that decisions about whether to invest, divest or engage must rest with trustees, who are already legally required to invest in the best financial interests of their members and to consider climate-related risks as part of that duty.

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I therefore await the response from my noble friend the Minister with interest. I support amendments in both groups, because of the lack of understanding and the way they were misled, and some sort of measure is required. For AEA Technology, there is clearly a responsibility on the Government, through the PPF or separately—that is a matter of detail to me. They should be entitled to redress. The integration case is a bit more difficult, because we cannot blame the Government for employers’ inability to explain to people what their scheme provided, but there should be a huge obligation on employers where they decided what the scheme structure should be and failed to explain it to their scheme members. These are different cases, but they are united by a failure to deliver what scheme members could reasonably expect.

[Baroness Stedman-Scott (Con)]

My Lords, I begin by thanking the noble Lord, Lord Palmer, for bringing forward these two amendments. I hope noble Lords will forgive me if I am relatively brief. At this stage, I am not sure that there is a great deal to add beyond listening carefully to the Minister’s reply and reflecting on it.

Turning to Amendment 216, the intention behind the proposed new clause is plainly serious and honourable. It goes to the heart of many of the issues that the noble Lord explored in speaking to the more specific provisions in Amendment 218. It seeks to ensure that, where members of occupational pension schemes have suffered detriment as a result of the actions or omissions of employers, sponsors or administrators, those injustices are properly examined. That instinct is entirely understandable.

When failures occur, whether through poor governance, inadequate communication or regulatory weakness, the consequences can be profound. Members may discover losses only years later, often at or near retirement, when there is little opportunity to recover. For some, that can mean genuine hardship. It is therefore right that this House remains vigilant and does not dismiss concerns about injustice lightly. The proposed new clause is also right to emphasise information failures, governance weakness and access to redress. Transparency, fiduciary duty and effective routes to remedy are fundamental to maintaining trust in the pension system.

However, while the intention is sound, we must consider carefully whether this is the right practical solution. First, there are already several mechanisms in place to investigate and adjust injustice. The Pensions Regulator exercises oversight and enforcement powers, the Pension Ombudsman provides an independent route for complaints and can issue binding determinations and parliamentary committees have repeatedly examined systemic issues in pension governance. Before establishing a further independent review, we should ask whether there is a clearly defined gap in the existing framework.

Secondly, the proposed new clause is framed in very broad terms. It calls for a

“review into injustices experienced by members … as a result of the actions or omissions”

across the occupational pension landscape. That could encompass decades of case history, multiple regulatory regimes and a wide variety of scheme structures. There is a risk that the scope becomes so expansive that it proves difficult to deliver focused and actionable conclusions within the proposed timescale.

We must also be mindful of expectations. A statutory independent review, particularly one examining injustice and potential options for compensation, may raise hopes of large-scale financial redress. If the eventual conclusions are more limited, or if remedies carry significant financial implications, it may lead to further disappointment among those affected.

If there are clearly identifiable categories of members who have fallen through gaps in the system, or areas where regulatory architecture has demonstrably failed, those issues should indeed be examined with care and precision. In short, the intention behind the proposed new clause is principled and compassionate. It recognises that pensions are about security and dignity in later life, and that injustice in this sphere can have lasting consequences. The question for us is whether a broad, independent review, commissioned within three months and covering the full occupational landscape, is the most effective and proportionate way to achieve that objective. I look forward to the Minister’s reply.

[Viscount Thurso (LD)]

The noble Baroness has answered the broad point in my noble friend’s first amendment, but there is the narrow point in AEA Technology, which seems to meet exactly what she said: namely, that there is a specific gap that members have fallen through, where Ministers in this place and the other place are both giving cast-iron assurances and documentation and still there is a problem. Does she accept that this needs particular attention?

[Baroness Stedman-Scott (Con)]

I made it very clear we have to look at where things have fallen through a system and where people have been severely impacted, and we have to look at it compassionately. My question was whether this is the right method and vehicle to do this, not whether we should look at it.

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[Baroness Stedman-Scott (Con)]

My Lords, I support Amendment 217, tabled by my noble friend Lady Neville-Rolfe. This amendment does not seek to diminish the value of public service, nor to undermine the pensions of those who dedicate their careers to the NHS, our schools, the civil service, the Armed Forces, the police or the fire service. Rather, it asks for something far more modest and necessary: transparency, long-term thinking and honesty about sustainability.

The amendment would require the Secretary of State to conduct and publish a review of the long-term affordability, intergenerational fairness, fiscal sustainability and accounting treatment of our major public service pension schemes, including the NHS pension scheme, the teachers’ pension scheme, the Civil Service Pension Scheme, the Armed Forces pension scheme, the police pension scheme and the firefighters’ pension scheme. My noble friend Lady Neville-Rolfe has outlined clearly and forensically the challenges of the concerns about the sustainability of unfunded public sector schemes. These are not new, but they are becoming more pressing. In 2023-24, total employer and employee contributions amounted to £49.9 billion. Total payments to pensioners were £55 billion. That left a shortfall of £5.1 billion, met directly from general taxation. In other words, today’s taxpayers are already topping up the system.

According to the Policy Exchange, unfunded public sector pension liabilities now stand at approximately £1.4 trillion: around 45% of GDP and approaching half the size, or more, of the official national debt. These are not hypothetical sums; they are long-term promises underwritten by future taxpayers. Unlike funded private sector schemes, most public sector pension contributions are not invested to generate returns; they are returned to the Treasury while current pensions are paid from current spending. This means future liabilities depend on future taxation. The burden is simply rolled forward. That may be sustainable—but it may not be. Surely this Committee is entitled to know which it is.

My noble friend Lady Noakes in her foreword to the Policy Exchange report set out clearly that transparency and realism are essential if we are to protect both pensioners and taxpayers. A mature system does not fear review; it welcomes it. I ask the Minister: do the Government believe the current trajectory of unfunded public service pension liabilities is sustainable over the next 20 or 30 years, what assessment has been made of the intergenerational fairness of asking younger taxpayers—many without access to defined benefit pensions themselves—to underwrite these commitments, how does the Treasury account for these liabilities in long-term fiscal planning, and are they fully reflected in measures of public sector net worth? Finally, if the Government are confident in the system’s sustainability, why resist a formal review that would provide clarity and reassurance?

This amendment would not prescribe reform; it simply asks for a comprehensive review and publication of the facts. If the costs are sustainable then let us demonstrate it, and if adjustments are needed then let us confront them honestly.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Neville-Rolfe, for introducing Amendment 217, which would require the Secretary of State to produce and publish a review of public service pension schemes, focusing on different aspects of the cost, affordability and accounting treatment of these schemes. I remind the Grand Committee that I am a member of the parliamentary pension scheme, and therefore of my appreciation of the work of the noble Viscount, Lord Thurso.

The noble Baroness is quite right to focus on the affordability of these schemes and what this means for intergenerational fairness, given that unfunded public service pension schemes pay out over £60 billion in pensions and lump sums each year and are often the single largest liability in the whole of government accounts.

However, as has been indicated already, and as the noble Baroness will know only too well, her party conducted a major review during the coalition Government, in the form of my noble friend Lord Hutton’s Independent Public Service Pensions Commission. That led to major reforms, including the new schemes to which all active members of the main schemes are contributing today, with a move from final salary to career average design, higher pension ages and higher member contribution rates. Due to the McCloud judgment and the resulting choice exercise for affected members, those members may have been building up only since April 2022, meaning that these major reforms are only now fully bedding in for all members. As my noble friend Lord Davies noted, the then Government committed to the 25-year guarantee, in effect committing to no further major reforms to public service pension schemes until 2040.

The proposed review would be conducted by the Secretary of State for Work and Pensions. However, I note that statutory public service pension schemes are the responsibility of the Chancellor of the Exchequer, and I know that the Treasury works closely with the OBR and the NAO on this policy area already.

The centrality of the questions that the amendment would require the review to consider means that much of this information is regularly published already. For example, the OBR publishes a forecast of the cash-flow cost of public service pensions over the coming years as part of its forecast at every fiscal event, including spending on pensions and lump sums, income from pension contributions and the net balancing payment to or from the Exchequer. The OBR also publishes long-term projections of spending on public service pension schemes as a share of GDP as part of its fiscal risk and sustainability reports. As noted, the most recent forecast from September 2024 projects that spending will decline from 1.9% of GDP to 1.4% of GDP over the next 50 years.

Demographic changes as a result of longevity or migration are taken into account in the OBR’s long-term analysis. The sensitivity of scheme liabilities to longevity is central to the four-yearly valuation reports used to set employer contribution rates across schemes. Both the valuation reports and the whole of government accounts contain detail on different accounting treatments of scheme liabilities and how to interpret the resulting headline figures. Given that all this information is regularly published already, and the reforms to public service pension schemes that have already been implemented, a government review into the affordability of these schemes would merely collate existing information in one place.

Let me address some of the specific questions that were raised, turning first to the treatment of pensions and the whole of government accounts. In recent years, liability has decreased significantly, falling from £2.6 trillion in 2021-22 to £1.4 trillion in 2022-23 and £1.3 trillion in 2023-24. The whole of government accounts report is fully transparent in explaining that these changes were driven by an increase in the applicable discount rate rather than changes in the amount of pension being accrued by scheme members. The whole of government accounts reports present this liability in accordance with the international financial reporting standards. There are no plans to change that approach and nor do we think there should be.

However, I am aware that members of the PAC have asked whether this liability could be presented on a more permanent basis, to show how it would change in the absence of changes to the discount rate, to aid user understanding. The Treasury is currently exploring options to present pension liabilities on a constant basis. To be clear, any such presentation would be purely supplementary and would not affect the underlying pension liability calculations or the way those are presented in the financial statements.

The noble Baroness, Lady Neville-Rolfe, asked why the Government are funding the gap permanently. The answer is that current contributions reflect the cost of current employment—pensions to be paid in the future. Current contributions are not intended to be and do not relate to current pensions in payment, which were earned years or indeed decades ago. So current pension costs reflect pensions earned. This is therefore not an appropriate basis to consider affordability. Traditionally, the central measure for Governments has been pensions as a proportion of GDP.

On whether it is right to be paying these kinds of pensions, I am very grateful to the noble Viscount, Lord Thurso, for his stirring defence. It is really important to recognise that, sometimes, this is discussed as though all public sector employees are calling in huge salaries and doing little for them. He defended how so many people in the public sector are driven by vocation and a calling into public service: they do things to serve and often have lower salaries than they might have elsewhere. I pay tribute to all those who are in that position.

It is true that, compared with the private sector, remuneration in the public sector is weighted towards pension. This is why public service pension schemes are so central to the Government’s fiscal forecasts. However, the noble Viscount is quite right: public sector remuneration has to be considered in the round, across pay and pensions. That is why pension provision is specifically taken into account as part of the pay review body process across the major public service workforces.

It is also important to distinguish between the generosity and cost of the schemes and their DB design. My noble friend Lord Hutton noted in his review for the coalition Government that they are a large employer capable of bearing the risks inherent in a DB design. It is thus in a different position from other employers. In a sense, cutting public service remuneration, whether from pay or pensions, would allow any Government to score savings for the Exchequer, but the fact is that reward packages for each public sector workforce have to be designed to maintain the required levels of staffing and to deliver the required public services.

Finally, it is worth remembering that the changes made following the Hutton review were significant. As I said, the scheme design changed from final salary to career average; pension ages were increased to state pension age for most schemes and to 60 for the police, firefighters and the Armed Forces; member contribution rates were increased across schemes, except for non-contributory Armed Forces schemes; and other aspects of scheme design were modernised, for example, in supporting flexible retirement. At the time, it was estimated that those reforms would save £400 billion over 50 years. Separately from the Hutton reforms, the then Government also switched the indexation of the scheme from RPI to CPI, in line with other forms of spending.

This has been a very interesting debate but, as I have said, most of the information that has been sought in the review is out there already, so such a review is not currently worth while. I hope the noble Baroness can withdraw her amendment.

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[Baroness Stedman-Scott (Con)]

My Lords, I shall speak to Amendment 219A, tabled by the noble Baroness, Lady Altmann, and moved by the noble Baroness, Lady Bowles. This amendment would ensure a more structured and joint approach between government departments and their related regulators, including the PRA, the FCA and the Pensions Regulator, so that their respective responsibilities for solvency, consumer interests, member protection and the promotion of growth are properly aligned.

I understand very clearly where the noble Baroness is coming from. Indeed, I am reminded of our earlier debate in Committee when I spoke to Amendment 206 alongside my noble friend Lady Coffey’s Amendment 180A. At that time, we touched on an issue that remains unresolved—the fact that very similar pension products could be treated differently, depending on whether they fall within the remit of the Pensions Regulator or the Financial Conduct Authority. That observation is not controversial—it is simply a reflection of how our current regulatory architecture has developed over time. Different bodies created at different moments for different purposes now oversee parts of what, to the saver, appears to be the same market. It is therefore entirely reasonable to ask whether greater alignment would improve clarity, consistency and outcomes. There may well be areas where closer co-ordination would be beneficial.

I shall not rehearse in full the arguments that I made previously, but I continue to believe that a formal co-ordination protocol offers three important virtues. First, it provides flexibility. A protocol can evolve as the regulatory landscape changes, allowing co-operation to deepen or adjust without the need for immediate structural overhaul. Secondly, it allows for escalation. If problems persist or new risks emerge, the framework for co-ordination could be tightened, strengthened or made more prescriptive. Thirdly, and perhaps most importantly, such a protocol can generate the evidence base for future reform. If, over time, it becomes clear that more fundamental consolidation of regulatory functions would better serve consumers and markets, the experience of structured co-ordination would provide the practical foundation of that decision. In that sense, this amendment is not about precipitating institutional change but about coherence; it is about ensuring that solvency, consumer protection, member outcomes and growth are pursued not in isolation but in a balanced and mutually reinforcing way.

For those reasons, I believe that the amendment from the noble Baroness, Lady Altmann, raises an important and constructive point for the Committee to consider.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Baroness, Lady Bowles, for introducing Amendment 219A on behalf of the noble Baroness, Lady Altmann. As we have heard, it would require regulations made under the Bill to be aligned with the technical actuarial standards.

I say at the start that I share the concern that governing bodies work together to ensure that members are protected and that schemes work to secure the best outcomes. It is also important that trustees have considered the range of options available to them before making decisions on their schemes’ direction of travel and committing funds to any particular option. However, I assure the Committee that there is already a lot of collaboration between the Government and regulators on a formal and informal basis. Trustees, in line with their duties, are considering the options for their schemes in the round.

This amendment would require trustees themselves to comply with the criteria for technical actuarial standards. These are intended for actuaries to comply with, who must operate according to the standards set by the Financial Reporting Council. Actuaries will then provide advice to trustees in response to trustee requests, highlighting the risks, assumptions and options available to them.

Actuarial analysis plays an important role in informing the process. It provides a clear assessment of the risks, underlying assumptions and range of options available for a given request. But it is advisory in nature and does not, in itself, determine the final decision. Trustees will then draw on this information to inform their decisions about the effective operation and governance of the scheme. It will be considered alongside other advice that trustees may consider appropriate to obtain, including investment, legal and covenant advice. But trustees are ultimately the decision-makers, and they remain fully accountable for the choices that they make on behalf of their members.

Trustees already consider the correct endgame for their schemes. The risks and opportunities facing schemes differ according to a range of factors, including the maturity of the scheme and the strength of the employer covenant. Under the funding code, trustees are required to set out their funding and investment strategy, describing how they intend to meet members’ benefits over the long term—their long-term objective. The funding code requires trustees to assess the key risks to delivering their funding and investment strategy, to explain how these risks are monitored and to set out the steps being taken to mitigate them. Trustees must also assess the employer covenant, as the employer’s financial strength is central to supporting the scheme.

The Pensions Regulator has set out guidance for schemes to consider their long-term objective and options, including buyout, superfunds and run-on, which sets out clear expectations of trustees. It will be updating the guidance and will work with the FCA and, where appropriate, the PRA and FRC to ensure alignment across all guidance relating to considerations of alternative options. Requiring alignment between regulations and professional standards could have unintended consequences, including reducing flexibility for trustees and requiring a succession of further legislative changes to maintain alignment as these standards evolve over time. It could also result in the actuarial profession being the driver behind the content of regulations, when this should clearly be a matter for government policy.

It is crucial that trustees remain in the driving seat when making decisions for schemes, which this amendment would have the effect of removing. I am grateful to the noble Baroness, Lady Bowles, for giving us the opportunity to have this debate, on behalf of the noble Baroness, Lady Altmann, but I hope she feels able to withdraw the amendment for the reasons that I have outlined.

Social Security Benefits Up-rating Order 2026

Baroness Stedman-Scott Excerpts

Tuesday 10th February 2026 Grand Committee

[Lord Davies of Brixton (Lab)]

I thank my noble friend the Minister for presenting the regulations. I will make a brief grouse that one of the sets of regulations we are debating was not on the table, and it was not even in the Royal Gallery. I know it is only three pages, but it should have been there, so I hope some action will be taken to make sure that it does not become a habit.

I have a couple of questions for my noble friend the Minister. One of the things that annoys me about current debates on pensions is when people fail to clarify or acknowledge that the triple lock applies only to part of the state pension.

Although the basic pension, or the new state pension, has increased by 4.8%, almost all of the rest of the other elements that go towards the total amount that people receive is being increased by 3.8%, so the average increase across the board will be somewhere between 3.8% and 4.8%. I feel it particularly personally because my own state pension will be going up by 4.2%; those of you who are any good at algebra will be able to work out what my state pension is from that simple fact. My question for my noble friend the Minister is: what is the average increase in the state pension across the board for all recipients? It is certainly not 4.8%, and it will not be 3.8%. It will be somewhere in the middle. I have not given notification of this question, so I would be quite happy to receive an answer in writing, but it is a very relevant figure that we should make sure people understand.

My second question arises from the accompanying document: the report from the Government Actuary on the uprating. On page 16 of the report, there are projections for the fund up to 2030-31. We see here that the balance in the fund at the end of the year is increasing from £89.6 billion in the current year and more than doubles over a period of five years to £163.7 billion. This is a relevant figure when we are told that state pensions are too expensive and at a time when the fund from which those pensions are paid is building up increasing balances.

Another relevant comparison is that, in the coming year, the balance at the end of the year as a percentage of benefit payments is 59% and, by the end of this five-year period, will have increased to 89%. This compares with the expectation—or a sort of target, though not a statutory target—that the balance should more typically be something like 17%. We are building up very substantial balances in the National Insurance Fund. Many people nowadays do not take the National Insurance Fund seriously at all, but I believe that it is a real fund; it is accounted for separately. I really want to know this: do the Government have a long-term plan for the balance to be held in the National Insurance Fund?

This has arisen, of course, because successive Governments have come to regard national insurance contributions as simply a way of raising additional revenue; I have made this point when we have discussed contribution rates in the past. This is the only figure we get that actually shows how contributions are affecting the National Insurance Fund. The Government need to explain it in a bit more detail to us again. I would be interested in what my noble friend the Minister says initially, but, again, a written explanation of the Government’s policy in relation to the size of the balance in the National Insurance Fund would be a relevant factor to take into account when discussing the affordability of national insurance benefits.

[Baroness Stedman-Scott (Con)]

My Lords, I thank the Minister for introducing these orders in her usual detail. I will speak to both: the draft Social Security Benefits Up-rating Order 2026 and the draft Guaranteed Minimum Pensions Increase Order 2026. Although they are being debated together today, they are fundamentally different instruments raising distinct policy issues. It is therefore right that they are addressed separately, so I will begin with the draft Guaranteed Minimum Pensions Increase Order.

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[Lord Davies of Brixton (Lab)]

This is neither the opportunity nor the time to have a debate on the Pensions Act 2011, but the cap on GMPs was limited to 3% because the state took over the responsibility for paying increases on private pensions in excess of 3%. However, under the coalition Government’s legislation amending pensions, those increases were, in effect, lost. The noble Baroness expresses surprise, but we have to go back to the legislation introducing the new state pension, which was introduced by the coalition Government. In doing so, they took away the state’s obligation to pay increases in excess of 3%, so any obligation to pay anything more than 3% is solely on the state, not the employer. It would not be appropriate to suggest that the employer should pay increases over the 3% level because it was the state’s responsibility, but the coalition Government took it away.

[Baroness Stedman-Scott (Con)]

I appreciate the noble Lord’s intervention. I will read Hansard. We will write to the noble Lord and start some correspondence on that issue. I appreciate the points made by the noble Lord. Everybody knows that he knows what he is talking about and that he is well versed in pensions legislation. If he is happy for me to do so, I will pick that point up with my colleagues.

I turn to the draft Social Security Benefits Up-rating Order 2026. The shadow Secretary of State for Work and Pensions, Helen Whately, has rightly led calls for the Government to move more quickly and clearly in setting out their plans for welfare reform. Sickness and disability benefits alone are forecast to cost the taxpayer £100 billion by 2030. The shadow work and pensions team has consistently argued that the Government are failing to confront the structural drivers behind rising welfare expenditure. Delays in doing so carry a cost not only to the public finances but in missed opportunities to redirect spending towards other pressing government priorities.

It is extraordinary that the Timms review has only just agreed the names of the committee members appointed for a review that Stephen Timms is leading into sickness benefits, including with group members representing the disabled. The work has not yet begun. It is nearly two years after the general election, so can the Minister confirm that his committee is on track to give an interim review this spring? Can she also confirm that it will indeed be 2027 before his committee reports and that, by then, no progress will have been made in this Parliament, allowing for likely legislation following a government response?

These concerns sit alongside the wider economic impact of Labour’s jobs tax. The Autumn Budget 2024, in particular the increase in employer national insurance contributions, has been associated with the loss of an estimated 50,000 full-time equivalent jobs. This has implications for not only employment levels but the long-term health of the National Insurance Fund. The difficulty with this draft order is one not purely of substance but of process. The instrument uprates pensions and working-age benefits together, leaving no scope to consider the appropriateness of each element independently or to debate the Government’s policy intentions for each in detail.

Rather than dwell further on the procedural constraint, it is worth noting that the issues raised by this uprating instrument sit alongside the Government’s announcement yesterday on universal credit reform and the legislation now laid before Parliament. Taken together, they speak to the direction of travel in welfare policy and the assumptions underpinning the current uplift. The Government argue that these reforms are intended to rebalance the benefits system, to address perverse incentives and to support more people into work. We are told that the current gap between health-related universal credit payments and the standard allowance discourages labour market participation, and that narrowing this gap for new claimants is necessary to restore fairness and sustainability.

I therefore have a number of questions for the Minister. First, what assessment has been made of the behavioural impact of introducing a significantly lower health element for new claimants? Secondly, although existing claimants and those with severe or lifelong conditions are protected, how confident are the Government that the criteria used to determine severity are sufficiently robust, consistent and fair across the system? Thirdly, the Government have announced £3.5 billion in employment support alongside the expansion of pathways to work advisers. How will success be measured? Will outcomes be judged by sustained employment, earnings progression or reductions in case loads, and over what period?

Finally, the Government expect these reforms to deliver savings of £950 million by 2030-31. Do those projections assume stable labour market conditions? What sensitivity analysis has been undertaken should employer demand weaken further? I hope that the Minister sees the link and will be happy to answer these questions.

[Baroness Sherlock (Lab)]

My Lords, I shall get through as many points as I can, and if I cannot, I will check Hansard and write to noble Lords. I am delighted to find that writing to members of the Committee is now a bipartisan activity, rather than just on the government side, so it is all very interesting.

I will start with the overall critique from the noble Baroness, Lady Stedman-Scott. As she said, this is what the shadow social security team throw at the Government on a regular basis: that they are not doing enough to bring down welfare spending, and that everything is terrible. I start by saying that the system the Opposition critique is of course a system that we inherited from them. All the things we are often told are wrong with it are things that were entirely in the gift of the previous Government. They did not address any of those problems. The only attempts they made were struck down by the High Court for being illegal, whereas this Government have actually taken action.

As the noble Baroness alluded to, we have already taken action to make the health and disability system more sustainable by rebalancing rates of universal credit from this April to tackle some of those inappropriate incentives in it. Our investment in pathways to work will help many more people with health conditions back into meaningful work. We have started the Timms review to make sure that we find a sustainable way forward. On timing, I can say to the noble Baroness that we anticipate that the review will report in autumn of this year. I have no reason to believe that it is not on track to do that.

I will come on to some of the critique from the other side. Noble Lords have said that we are either not doing enough to reduce social security spending or not doing enough to increase it, so let me try and lean in the other direction to be balanced. My noble friend Lady Lister is absolutely right: we are in Grand Committee, and many of us have been in Grand Committee on a regular basis—annually—to do this. Some of us have moved positions from one side to the other, but now we are here. This point is that this debate is heard, it goes on the record, and I always look very carefully, whether in government or opposition, at the comments made by noble Lords. I am grateful for them; it is a debate well worth having.

I understand the point my noble friend is making about the adequacy of benefits, but from April, this Government are delivering the first ever sustained above-inflation rise in the basic rate of universal credit since it was introduced. Just under 4 million households will benefit overall from that change, which is estimated to be worth £760 a year by 2029-30 in cash terms for a single parent aged 25 or over, or around £250 above inflation. We have also done other things. We introduced the fair repayment rate from April last year, reducing overall universal credit deductions from 25% to 15%, which again benefited approximately 1.2 million of the poorest households. I respect my noble friend for constantly pushing us to go further, but I put on record that the Government have done something significant, and I thank her for acknowledging this.

In terms of the rebalancing, my noble friend Lady Lister is right that, unusually this year, the personal allowance rates of universal credit are not covered by these because the Universal Credit Act, which did the rebalancing, took them out for the relevant period. They will therefore be made by regulations but when we discussed the primary legislation, the Universal Credit Bill, the formula was made really clear. The only reason the numbers were not in there is because they relate to CPI, so the actual numbers depend on what CPI turned out to be. The percentage relationship to CPI was made clear and there was the opportunity to debate that in the Bill. Hopefully, that reassures her on that front.

I understand my noble friend’s concerns on the local housing allowance point, but we have to step quite carefully in this area. DWP currently supports renters by spending around £34 billion a year on housing support for low-income renters, including £12 billion in the private rented sector. The April 2024 one-year LHA increase cost an extra £1.2 billion in 2024-25. It will be approximately £7 billion over the next five years. This is an area where the changes cost a lot of money. We know that LHA rates will not meet all rents in all areas, but it has always been acknowledged that they would never be able to do that.

This Government are trying to address the underlying problems driving some of these issues by prioritising the fundamental issue of the lack of housing supply, through the £39 billion investment in the social and affordable homes programme, which is still the biggest boost to social and affordable housing in a generation. For those who need additional support and have a shortfall to meet their rent costs, our new crisis and resilience fund replaces discretionary housing payments in the household support fund from this April, supported by £1 billion a year, including Barnett impact, through the spending review period. Importantly, we have been able to give a multi-year reassurance to local authorities that the money is coming through.

On the benefit cap, I know that my noble friend will never be a fan of it, and I understand her concerns, but this Government believe that entering or returning to employment is best for individuals and the economy; we have taken significant steps to help them do so. The benefit cap encourages personal responsibility while maintaining a strong safety net. On uprating, this has to be reviewed every five years, and 2027 is the next time it will definitely have to be done. It is up to the Secretary of State when it is reviewed, and that is the latest it can be.

Youth Unemployment

Baroness Stedman-Scott Excerpts

Thursday 5th February 2026 Lords Chamber

[Baroness Smith of Malvern (Lab)]

We have looked at information from around the UK and from previous job subsidy schemes to help to design this. Of course, the first six job guarantee areas that I mentioned in the original Answer include one that covers a significant area of Wales. We will also use the experience of that to build the national rollout that will come in the autumn.

[Baroness Stedman-Scott (Con)]

My Lords, recent analysis shows that in 2025-26 the real cost of hiring an 18 to 20 year-old on the minimum wage has risen by around 13% compared with just over 3% for someone on average earnings, despite under-21s largely being outside employer national insurance contributions. In light of this, what assessment have the Government made of the combined impact of the national insurance contributions and minimum wage policy on youth employment, and how are they ensuring that young people are not priced out of entry-level work or any other part of the labour market?

[Baroness Smith of Malvern (Lab)]

We made a commitment to equalise the 18 to 20 national minimum wage with the national living wage. We asked, as all recent Governments have done, the independent Low Pay Commission to recommend youth rates to enable us to do that, and we also included within the remit the expectation that it would consider how to do this in a way that avoids increases in unemployment. The April 2026 uplift ensures that the Government are taking cautious steps towards achieving this commitment, and that is the way we will continue to progress.

Pension Schemes Bill

Baroness Stedman-Scott Excerpts

Committee stage
Thursday 5th February 2026 Grand Committee

[Lord Palmer of Childs Hill (LD)]

My Lords, this amendment has the distinction of being in a grouping all of its own, which obviously shows how important it is. The proposed new clause in it would require the Secretary of State to publish a report within 12 months on

“the impact of consolidation in the occupational pensions market”.

It would ensure, I hope, that Parliament and the public have transparency on how consolidation is reshaping the sector. We know that consolidation is accelerating in the pensions market and, although scale can deliver benefits—I hope—it can also raise risks: reduced competition, fewer choices for savers and further barriers for new entrants. A clear evidence base is an essential part of the solution to strike the right balance.

The report referenced in this amendment calls for information on a number of things. The first is market concentration—for instance, trends in the number and size of schemes and the level of provider dominance. The second is effects on competition and innovation: whether consolidation is driving efficiency or stifling creativity and diversity. The third is consumer choice: how member options are being affected. The fourth is barriers to entry: challenges faced by small and medium-sized providers in entering or growing in the market. The last is an assessment of whether current competition and regulatory safeguards are sufficient.

The report would also have a particular focus on exclusivity arrangements, exit charges and pricing structures that may distort the market. Furthermore, the Pensions Regulator and the Competition and Markets Authority would have a role in overseeing these risks. The review would also examine potential policies or regulations to support new entrants and maintain a healthy and competitive pensions market.

To summarise, we know that consolidation must serve savers’ interests, not just the interests of the largest providers. This proposed new clause would ensure that Parliament is properly informed—it should be informed on all things, whether on this or on the noble Lord, Lord Mandelson—that regulators are held to account and that future policy is based on evidence. From a Liberal Democrat perspective, well-functioning markets matter. Competition, diversity of approach and the ability for new entrants to challenge incumbents are essential if savers are to benefit over the long term. Ministers need to explain why a formal review of consolidation is resisted, given the scale of structural change this will accelerate. We are asking just for a review, and we hope the Government will not think this too much to ask for before we enter this new realm. I beg to move.

[Baroness Stedman-Scott (Con)]

My Lords, it is a pleasure to close this debate and respond to the remarks of the noble Lord, Lord Palmer, on his Amendment 184. I am grateful to him for raising this issue, because it goes to the heart of how we ensure that pension reform delivers better outcomes for savers rather than simply neater market structures on paper. I think there is reasonably wide backing across the pensions industry for the Government’s broad objective of greater consolidation and efficiency within the defined contribution market. Many stakeholders accept, and indeed support, the proposition that increased scale, when combined with robust governance, strong investment capability and appropriate oversight, has the potential to deliver stronger long-term outcomes for members. Few would argue for fragmentation for its own sake.

However, support for consolidation is not the same as support for consolidation at any cost, or consolidation pursued without sufficient regard to its secondary effects. Well-founded concerns remain that the current design of the scale test risks it being too blunt an instrument. In particular, it does not distinguish adequately between schemes that are genuinely underperforming and those smaller or mid-sized providers that, despite operating below the proposed thresholds, none the less deliver consistently high-quality, well-governed and, in some cases, market-leading outcomes for savers. Indeed, the Government’s own analysis underlines this risk. The chart contained in paragraph 70 of the Government’s 2024 report shows no clear or consistent correlation between assets under management and gross five-year performance across large parts of the master trust and group personal pension market.

The principal scale-related concern identified appears to relate not to well-run schemes operating below the threshold but to the very smallest arrangements, in particular certain single-employer schemes where governance capacity and resilience can be more limited. That matters because consolidation in a pensions market is not a neutral process. This is not a typical consumer market. Savers are largely captive, choice is constrained, switching is rare and inertia is high. In such an environment, reductions in the number of providers can weaken competitive pressure long before anything resembling a monopoly appears. The risk is not always higher charges tomorrow but slower innovation, less responsiveness and poorer outcomes over time.

That is why this amendment is important. It would ensure that consolidation serves savers and that Parliament retains a clear grip on how the market is evolving. Small distortions in competition today—barely visible in the short term—can compound into materially worse outcomes over 30 or 40 years of saving. In a system built on long horizons, early and structured scrutiny is essential.

There is also the question of innovation. Smaller and newer providers have often been the source of advances in member engagement, digital capability, decumulation options and investment design. If consolidation raises barriers to entry through disproportionate compliance costs, restrictive exit charges or exclusivity arrangements, innovation risks being squeezed out, even where headline charges appear to fall. Efficiency gains that come at the expense of progress are a poor bargain for future retirees.

The report required by this amendment would not obstruct sensible consolidation; nor would it second-guess the direction of travel. Rather, it would provide Parliament with the evidence needed to ensure that consolidation is proportionate, targeted and genuinely in the interest of savers. It would help ensure that regulatory and competition safeguards remain fit for purpose as market structures change, and that opportunities for new high-quality entrants are not inadvertently closed off.

For these reasons, I believe that this amendment strikes the right balance. It is supportive of reform, alert to risk and grounded firmly in the long-term interests of those whose retirement security depends on the decisions we take today.

[The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, I thank the noble Lord, Lord Palmer, for introducing his amendment, which would require the Government to conduct a report on the impact of consolidation in the occupational pensions sector within 12 months of the Act being passed. I am grateful to the noble Baroness, Lady Stedman-Scott, for her remarks and her acknowledgement of the benefits of consolidation and the widespread support for it.

The fact is that consolidation is already happening across the pension landscape. The number of DC pension providers has reduced from roughly 3,700 in 2012 to about 950 schemes today. On the DB side, the number of schemes is similarly down from about 6,500 in 2012 to 4,800 in 2026, with a record number of transactions currently estimated in the buyout market. Our aim is to accelerate this trend of consolidation through the DC scale measures and DP superfunds. As I have said before, scale brings numerous benefits directed at improving member outcomes, including better governance, greater efficiency, in-house expertise and access to investment in productive markets.

I am not going to respond in detail to the comments from the noble Baroness, Lady Stedman-Scott, on innovation and other things, because we have given them a decent canter in previous meetings in Committee, but it is absolutely essential that pension schemes remain competitive post-scale. We expect that schemes with scale will innovate and drive competition, especially, for example, in consolidating single-employer trusts. The market will evolve, as will the needs of members, and we expect that the schemes and the industry will be able to align with this.

It is absolutely right that the Bill will lead to major change in the occupational pensions market. Although I do not agree with this particular proposal, I absolutely agree with the noble Lord, Lord Palmer, that we must understand and monitor the impact of these reforms, because the impacts of consolidation really matter. That is why a comprehensive impact assessment was produced, analysing the potential impacts of the Bill, with plans to evaluate the impact in further detail. An updated version of the impact assessment was published as the Bill entered this House; crucially, it included further details of our ongoing monitoring and evaluation plans, including critical success factors and collaboration across departments and regulators.

We have provided the market with clarity on our approach so that changes can be put into effect, but we need to allow time to assess and evaluate the impacts following full implementation. We will assess the overall impacts over an appropriate timeframe, given that the full effects of consolidation will be after the Bill has been implemented.

As I have mentioned before, we published a pensions road map, which clearly sets out when we aim for each measure to come into force. The fact is that many of the regulations to be made under the Bill will not have been made or brought into force within a year of the Bill becoming an Act. Any review at that point could be only very partial. However, the Government are committed to strong monitoring and evaluation of this policy, especially of its impact on members. The noble Lord, Lord Palmer, is absolutely right to point to the crucial role of the Pensions Regulator and the CMA. They are best placed, in the first instance, to monitor the impacts of consolidation as part of their respective statutory functions, including an analysis of emerging trends. The Pensions Regulator, for example, will play a key role in monitoring the impact of consolidation on the trust-based DC pensions market via its value-for-money framework.

I can therefore assure the Committee that we will keep this area under review, consistent with our stated policy aims for the sector and for good member outcomes. We will also continue to monitor our working arrangements with the regulators; this includes their ongoing monitoring of the pensions industry. We will submit a memorandum to the Work and Pensions Select Committee with a preliminary analysis of how the Act has worked three to five years following Royal Assent. The committee may then decide to conduct a fuller inquiry into the Act, consistent with standard practice, as set out in the Cabinet Office’s Guide to Making Legislation.

Given the above, a separate government report risks duplicating work while putting an undue burden on all those involved. If issues are identified by regulators before the Government submit a post-legislative memorandum, and there is a need for government action, then an evidence-based response can be taken. I completely agree with the noble Lord about the importance of this and I thank him for raising this debate. However, I hope that he feels reassured and able to withdraw his amendment.

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[Baroness Altmann (Non-Afl)]

Good. I now have it and I want to check that everyone else has it too. That is my first question dealt with.

In speaking to this amendment, the aim is to enable members of pension schemes that have gone into the PPF after their assessment period to be extracted, with regulations laid that will govern the terms on which they can be extracted. This is particularly relevant to the AEAT scheme: I know that we will come to this in later groups, with a requirement for a review of the situation. My amendment is trying to facilitate a practical resolution to the problems faced by the Atomic Energy Authority scheme. There are parallels with the Atomic Weapons Establishment or AWE scheme: employees originally had a scheme similar to and in fact derived from that of the UK AEA.

The AWE staff and their pensions were transferred to the private sector, and in 2022 the Government granted a Crown guarantee to the private company scheme. However, members of the AEA scheme were told that the scheme that they were encouraged to transfer to in 1996 would be as secure as that provided by the Atomic Energy Authority public sector scheme. This was not the case, though, because it was not offered a Treasury guarantee. It would appear that the Government Actuary’s Department failed to carry out a proper risk assessment of the various options offered to those members in 1996. Indeed, they were apparently specifically told not to worry about the security of the scheme to which they transferred all their accrued benefits. Of course, all these accrued benefits are pre-1997.

What happened after that is that they went into a private sector scheme. It was a closed section of that scheme, only for the members who transferred their public sector rights into it. The public sector rights had full inflation protection for pre-1997 and members paid an extra 30% or so contribution into that private sector scheme in order to conserve the inflation protection. However, as part of that, the pension they were saving for, the base pension, was lower than the one for those members in the open scheme who had joined not from the public sector. They were working on the principle that that their scheme was secure and that they would be getting the uplifts of inflation. When it failed—the private sector company went bust in 2012—and they went into the PPF in 2016, they suddenly discovered that they had paid 30% more for inflation protection, which was gone. And because they had paid 30% more for that protection and were accruing a lower pension, a 180th instead of a 160th scheme, their whole compensation was lower than that of everybody else who had not had any assurances from the Government that transferring their previous rights into a private sector scheme would generate these kinds of losses.

This is probably the worst example I have seen of government reassurance and failed recognition of the risks of transferring from a guaranteed public sector scheme into a private sector scheme. This amendment seeks to require the Government to lay regulations that would transfer members out of the PPF, those members of the closed scheme, if they wish to. I am not forcing anyone to do so within this amendment. You have to offer them the option of going or staying if they are satisfied with the PPF. Also, a sum of money may need to be paid to the PPF, which would take away the liability and thereby reduce PPF liabilities, but also sets up an alternative scheme that could be along the lines of the AWE arrangements, for example. That would potentially be another option. On privatisation, the Government received a substantial sum of money from the sale of that company, the private sector takeover of the commercial arm of the Atomic Energy Authority. That delivered less money than was paid to the private sector scheme to take over the liabilities. Therefore, the Government have money to pay with, which they have never really acknowledged.

I hope that this amendment is a potentially direct way to help the AEAT scheme, if the Government are minded to consider it. It builds on a provision that is already in the Pensions Act 2004, which talks about situations whereby there is a discharge of liabilities in respect of the compensation, which this amendment would be doing. It prescribes the way in which subsection (2)(d) of Section 169 of the Pensions Act 2004 could be used to help the AEAT scheme.

I have also been approached by a private sector employer whose scheme failed and went into the PPF. At the time, the employer did not have sufficient resources to buy out more than the Pension Protection Fund benefits for his staff. He now is in a position to do that and would like to do so but, at the moment, he cannot get his scheme extracted. He is willing to pay an extra premium to do that, in pursuance of a moral duty to try to give his past staff better-than-PPF benefits. That is what this amendment is designed to achieve. It is built on the connection between AEAT and AWE, but could also help other private sector schemes if the employer feels—it would normally involve smaller schemes—that there is a moral obligation that they can now meet, financially, to recompense members at a level better than the PPF, once the assessment period is over and the resources have gone in, and to take it back out again.

[Baroness Stedman-Scott (Con)]

My Lords, this group concerns the proposed transfer of the AWE pension scheme into a new public sector pension arrangement, as set out after Clause 110 in government Amendments 194 to 202, with the associated measures on extent and commencement in government Amendments 223 and 224.

At first glance, these new clauses are presented as technical and perhaps little more than an exercise in administrative tidying up, reflecting the fact that AWE plc is now a wholly government-owned company. However, on closer inspection, several questions come to mind. This represents a material transfer of long-term pension risk and does so in a way that raises serious questions around principle, process and precedent.

On an IAS 19 accounting basis, AWE plc reported a defined benefit pension deficit of £97 million as at 31 March 2025. The company has already made significant one-off contributions: £30 million in March 2024, following an earlier £34.4 million in March 2022. These payments form part of a recovery plan agreed with the trustee and the Ministry of Defence, and the position is subject to ongoing review. This is an active funding challenge, one that should be considered carefully.

The provisions before us establish a bespoke statutory framework for a single named company. They provide for the creation of a new public sector pension scheme, the transfer of assets and liabilities, the protection of accrued rights, specific tax treatment, information-sharing powers, consultation requirements and arrangements for parliamentary scrutiny. All of this is meticulously itemised and carefully drafted.

Yet my concern lies not with the drafting but with the policy and constitutional choice that sit beneath it. We are told repeatedly that members’ rights will be preserved; that phrase carries considerable weight. The question is a simple one: which rights precisely are being preserved? Are we referring solely to rights accrued through past service or does that protection extend to future accrual as well? Does it encompass accrual rates, indexation arrangements, retirement age and survivor benefits or are members’ entitlements merely frozen as a snapshot at the point of transfer? What happens if the rules of the receiving public sector scheme change in future? These questions go to the heart of both member security and parliamentary responsibility. They deserve answers in the Bill, not assurances in principle or reliance on mechanisms that may evolve long after this Committee has given its consent.

There are also practical questions that remain unanswered. How exactly will trustees be formally discharged of their responsibilities? Additionally, does this change relate to DC members? Will each defined contribution pot be automatically converted or will past defined contribution rights be crystallised, with future accrual taking place under a defined benefit structure? For scheme members, these questions go to the very heart of retirement security.

I also question the decision to legislate company by company. This new clause is not objectionable because it concerns pensions; it is objectionable because it concerns one named corporate identity. Primary legislation should set rules of general application.

If the policy rationale here is sound, and if it is right that the pension schemes of wholly owned government companies should be transferred into the public sector on certain terms, that principle should be capable of being expressed generally and should not be hard-coded for AWE alone. Otherwise, we will face an unhappy choice in the future: if AWE’s status changes again, Ministers must either live with an outdated statute on the books or return to Parliament with yet another Bill to amend it. Neither outcome represents good lawmaking.

There are also practical questions that I hope the Minister will address. Will members receive individualised benefits statements, comparing their position before and after the transfer in clear, comprehensible terms? What support will be made available for members who need independent guidance, rather than reassurance from the scheme sponsor itself? Will there be formal consultation with scheme members and recognised unions, and will the responses to that consultation be published?

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[Baroness Altmann (Non-Afl)]

My Lords, I have added my name to these amendments. I very much support the aims of the noble Baroness, Lady Bowles, to ensure there is proper flexibility in the levy paid by companies to the PPF. The PPF can then use its discretion to decide which companies should pay more than others and which companies are more secure than others in terms of their pension schemes. The current requirement is based on circumstances that have fundamentally changed over the past 20 years or so, since the whole system was first thought of.

The PPF is one of our incredible success stories in terms of protecting people’s pensions by successfully investing money that it has taken in. It has worked far better than anyone would have anticipated at the time, and we need to pay tribute to those who have been running the PPF; they have done an extraordinarily good job in the face of sometimes very difficult circumstances. I hope that the Government will think favourably about the possibility of allowing the PPF this kind of flexibility, given that the situation with pension schemes, surpluses and funding levels has changed so fundamentally.

[Baroness Stedman-Scott (Con)]

My Lords, the amendments in this group in the name of the noble Baroness, Lady Bowles, are thoughtful and proportionate. They raise genuinely important questions about how we can future-proof the operation of the Pension Protection Fund.

Clause 113 amends the provisions requiring the PPF board to collect a levy that enables the board to decide whether a levy should be collected at all. It removes the restriction that prevents the board reducing the levy to zero or a low amount and then raising it again within a reasonable timeframe. We welcome this change. It was discussed when the statutory instrument passed through the House, at which point we asked a number of questions and engaged constructively with the Government.

The amendments tabled by the noble Baroness would go further; once again, the arguments she advances are compelling. Amendment 203A in particular seems to offer a sensible way to shape behaviour without micromanaging it—a lesson on which the Government may wish to reflect more broadly, especially in relation to the mandation policy. If schemes know that the levy will always be raised in one rigid way, behaviour adapts, and not always in a good way. In contrast, with greater flexibility, employers retain incentives to keep schemes well funded, trustees are rewarded for reducing risk and the levy system does not quietly encourage reckless behaviour on the assumption that everyone pays anyway.

This amendment matters because it would ensure that, if the PPF needed to raise additional funds, it could do so in the least damaging and fairest way possible at the relevant time. I fully appreciate that the PPF is a complex area but, as the market has changed and is changing, and as the pensions landscape continues to evolve, the PPF must be involved in that journey. These are precisely the kinds of questions that should be examined now, not after rigidity has caused unintended harm.

I turn briefly to Amendment 203C. We are open to finding ways to prevent the levy framework becoming overly rigid, which is precisely why we supported the statutory instrument when it came before the House. Instead of hardwiring an 80% risk-based levy requirement into law, this amendment would place trust in the Pension Protection Fund to raise money in the fairest and least destabilising way, given the conditions of the year. Flexibility may well be the way forward. I have a simple question for the Minister: have the Government considered these proposals? If the answer is yes, why have they chosen not to proceed? If it is no, will they commit to considering these proposals between now and Report? I believe that that would be a constructive and proportionate next step.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Baroness, Lady Bowles, for introducing her amendments and explaining why she wants to advance them. As she said, taken together, they would give the PPF much more flexibility—full flexibility, in fact—in deciding how to set the levy by removing the requirement for at least 80% of the PPF levy to be risk-based. Obviously, in the current legislation, 80% of the levy has to be based on the risk that schemes pose to the PPF; this supports the underlying principle that the schemes that pose the greatest risk should pay the highest levy.

Although the PPF is responsible for setting the pension protection levy, restrictions in the Pensions Act 2004 prevent it significantly reducing the levy or choosing not to collect a levy when it is not needed. As has been noted, the PPF is in a stronger financial position and is less reliant on the levy to maintain its financial sustainability. That is why, through the Bill, we are giving it greater flexibility to adjust the annual pension protection levy by removing the current legislative restrictions.

Clause 113 will enable the PPF to reduce the levy significantly, even to zero, and raise it again within a reasonable timescale if it becomes necessary. To reassure levy payers, Clause 113 provides a safeguard that prevents the board charging a levy that is more than the sum of the previous year’s levy and 25% of the previous year’s levy ceiling. The legislative framework will also enable the PPF to continue to charge a levy to schemes it considers pose a specific risk. In support of this change, the PPF announced a zero levy for 2025-26 for conventional DB schemes and is consulting on setting a zero levy for these schemes in the next financial year. That would unlock millions of pounds in savings for schemes and boost investment potential, and it has been widely welcomed by stakeholders.

On the way forward, as the PPF is not currently collecting any levies from conventional schemes, whether risk based or scheme based, the make-up of the split is less consequential for schemes: a different percentage of a zero charge is still zero. But, while the PPF is strongly funded, it underwrites the whole £1 trillion DB universe, as I said. There is inevitably huge uncertainty about the scenarios that could lead to the possibility of the PPF needing to charge a levy again in the future, but it cannot be entirely discounted. We recognise the concern that, if that were to happen, the proposed legislation does not go far enough to allow the PPF to calculate the appropriate split between risk-based and scheme-based levies, particularly as the number of risk-based levy payers is expected to diminish over time.

Obviously, the amendments tabled here would give the PPF full discretion on how the split of the levy is calculated and set. While that may be welcomed by some, our view is that we need to consider any changes carefully to ensure that any legislation is balanced, is proportionate and gives the right flexibility while maintaining appropriate safeguards. That will take time. We will continue to consider whether further structural change to the PPF levies may be required in the future and, where it is, whether it works for the broad spectrum of eligible DB schemes, the PPF and levy payers.

In response to the noble Baroness, Lady Stedman-Scott, the Government’s view is that there is a reason the framework is set in legislation: to give levy payers confidence on future calls. But, as I said, we will consider the way forward. I cannot say to the noble Baroness that we will do that between now and Report—it will take time to reflect on future changes and, if there are to be any, to make sure that they happen—but I am grateful to her for raising the matter and for the debate that it has produced. I hope she will feel able to withdraw her amendment.

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Moved by

[Baroness Stedman-Scott]

204: After Clause 117, insert the following new Clause—
“Pension investment in social bonds: framework, value for money and market enablement(1) The Secretary of State must, within 12 months of the passing of this Act, prepare and publish an assessment of whether a pension-specific framework should be established to support trustees of occupational pension schemes who wish to invest, where they consider it appropriate, in social bonds and other forms of social infrastructure investment.(2) The assessment must consider the extent to which such a framework could—(a) provide clarity on the application of trustees’ fiduciary duties in relation to social bonds,(b) set out principles for assessing risk, return, liquidity, duration and transparency of such investments, having regard to the long-term nature of pension liabilities,(c) support consistency and comparability in the evaluation of social bonds across schemes, and(d) facilitate trustee confidence and member understanding of such investments.(3) In particular, the Secretary of State must consider whether, and how, the social and economic outcomes associated with social bonds could be reflected within the value for money framework applicable to occupational pension schemes, including—(a) the relevance of long-term economic impacts to member outcomes,(b) the extent to which such investments may mitigate systemic or economy-wide risks material to pension savings, and(c) the presentation of information to members in a clear and proportionate manner.(4) The assessment must also consider how a pension-specific framework could support the development of a credible and investable pipeline of social bond opportunities, including— (a) how public bodies, local authorities, social enterprises or other issuers might bring forward proposals in a form suitable for consideration by pension schemes,(b) the role of standardisation, intermediaries or aggregation vehicles in reducing transaction costs and improving investability, and(c) how such proposals could be assessed on a consistent basis without imposing any obligation on pension schemes to invest.(5) In developing the assessment, the Secretary of State must consider what metrics and evidential standards would be required to ensure that any framework for social bonds is pension-specific, including—(a) metrics relating to long-term risk-adjusted financial performance,(b) alignment with the duration and cash flow characteristics of pension liabilities,(c) the financial materiality of social and economic outcomes to pension savers over time, and(d) the avoidance of reliance on generic or non-financial impact measures not relevant to pension scheme decision-making.(6) Following the assessment, the Secretary of State must—(a) publish the conclusions of the assessment, and(b) where the Secretary of State considers it appropriate, issue statutory guidance or make regulations establishing a pension-specific framework for the prudent assessment, reporting and communication of investments in social bonds.(7) Nothing in this section—(a) requires trustees to invest in social bonds or any other asset class, or(b) alters the requirement that trustees act in the best financial interests of scheme members.”

[Baroness Stedman-Scott (Con)]

My Lords, I will speak first to my Amendment 204. I make clear that this amendment does not require trustees to invest in any particular asset class, nor does it seek to redefine or dilute fiduciary duty in any way. Those safeguards are explicit in the amendment. Trustees must always act in the best financial interest of scheme members, and nothing here displaces that principle, consistent with the approach that we have taken throughout our deliberations in Committee. Instead, the amendment asks the Government to step back and consider whether trustees who wish to explore investments such as social bonds or social infrastructure would benefit from clearer pension-specific guidance and a more coherent framework within which to operate.

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In summary, although we very much share the aim of ensuring that pension capital does not contribute to human rights harm, the Government believe that the existing responsible investment framework remains the appropriate way forward, it being effective, flexible and proportionate. I look forward to continued discussions; in the meantime, I hope that the noble Baroness can withdraw her amendment.

[Baroness Stedman-Scott (Con)]

My Lords, I shall conclude briefly. I hope that it is clear from the discussion this afternoon that there is a shared concern across the Committee to see pension schemes operate responsibly, prudently and in the best long-term interests of their members. Where we differ is on how that objective is best achieved. In my view, the strength of our pensions system lies in its balances: clear legal parameters set by Parliament, coupled with trustee independence, evidence-based judgment and accountability to members.

I thank all noble Lords for their contributions—in particular, the noble Lord, Lord Pitt-Watson, who made a valuable and excellent contribution. He made my heart sing, and I think that our hearts beat in concert in terms of responsible and social investment. I am very keen to learn more from the noble Lord about his experience of responsible investment.

I appreciate the Minister’s response. She has been very clear—message received. I look forward to discussing social impact bonds more with the Minister and anybody else in the Committee who wishes to take part. With the leave of the Committee, I beg leave to withdraw my amendment, but, if it comes back on Report, I will be very happy.

Amendment 204 withdrawn.

Pension Schemes Bill

Baroness Stedman-Scott Excerpts

Committee stage
Tuesday 3rd February 2026 Grand Committee

[Lord Fuller (Con)]

My Lords, I will not repeat the long list of government missteps on a global, international stage from those politicians who have interfered with people’s retirements. Safe to say, it represents moral hazard.

There is a mismatch between the long-term investment needs of people who are saving for retirement half a generation ahead—in particular, the youngest members of our workforce—and the short-term political wants of those who might direct. Politics is transient. MPs come and go, but the hangover from bad decisions lasts a long time. The 1997 changes to dividend taxes have cast a long shadow that has deprived millions of a secure retirement. We should have learned that lesson but, no, we have not. Mandation risks repeating that mistake all over again and benighting a new generation of youngsters who are 30 or 40 years away from retirement. There is already generational unfairness in the system. Mandation will perpetuate it again. It should have no place in the Bill, yet here we are discussing it.

I align myself fully with the proposers of these amendments and hope that, even at this late stage, between Committee and Report, the Government will look at this matter once more. Mandation should not be part of the Bill because of that simple moral hazard. MPs and the Treasury love to tell people what to do, but they will not be around to pick up the pieces when, or if, it all goes wrong.

[Baroness Stedman-Scott (Con)]

My Lords, I shall speak briefly to Amendment 167, which was tabled and spoken to eloquently by the noble Baroness, Lady Kramer, and supported by many noble Lords. This amendment touches on a set of concerns that we raised at Second Reading and to which we will return in considerably more detail in our debate on the next group.

For the sake of brevity, at this stage, I will confine myself to the central point of principle. The issue here is not simply asset allocation but where risk is placed and who should take it when investment decisions are shaped by government direction, rather than trusty judgment. The mandation power introduced by the Bill is targeted narrowly at automatic enrolment default funds—the schemes that are relied on by those who are least likely to have made an active choice and are least able to respond if outcomes are adversely affected. That targeting matters. Mandation does not apply evenly across the pensions landscape. It does not touch defined benefit schemes, self-selected funds, SIPPs or bespoke arrangements but falls with notable precision on default savers—those who depend most heavily on the neutrality and integrity of the system to act on their behalf.

Amendment 167 raises a legitimate question about protection and accountability in that context. If default funds are required to follow mandated investment decisions and if those decisions underperform a simple, low-cost benchmark, should the consequences fall entirely on members who neither chose the strategy nor, in practice, have the capacity to respond to it? Of course, it may be said that members are free to move to another fund, but that response lacks behavioural realism. Automatic enrolment defaults exist precisely because many savers do not actively choose, do not regularly review and do not feel equipped to intervene in complex investment decisions. How can we put them in that position?

For a significant proportion of members, remaining in the default is not an expression of preference but a reflection of constraint, limited time, limited confidence and limited financial literacy. Behavioural realism tells us that these savers will not simply move in response to policy changes, however well signposted. To place the full downside risk of mandated investment decisions on that group is therefore not neutral; it is a deliberate allocation of risk to those least able to manage it. The noble Baroness’s amendment is therefore not an attempt to eliminate risk but to highlight the asymmetry that mandation introduces and the absence of any corresponding safeguard for those most exposed to its effects.

These issues around mandation, choice, fiduciary duty and the position of default savers run through the architecture of the Bill. We will return to them in much greater depth in the following group. For now, I simply underline that the concerns raised by Amendment 167 and all those who have spoken are not isolated. I look forward to the Minister’s response and hope that the Government will take note of the concern laid out to them today and do the right thing.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Kramer, for explaining her amendment, which would in essence introduce a requirement for the Government to establish a framework for compensating savers in the event that they lose out financially because they were invested in assets that they would not have been were it not for the use of these powers. I am sorry to say that because we have just discussed a similar amendment from the noble Lord, Lord Vaux, in the previous group, some of my arguments may sound a little familiar, but I hope that the noble Baroness will bear with me.

First, as I have said, the Government would not be proposing these powers if there was not strong evidence that savers’ interests lie in greater investment diversification than we see in today’s market. That is the Government’s view. I mentioned in the last group that there is a range of evidence out there which goes to this point. I cited one example of it; there are others cited in the DWP paper to which the noble Lord, Lord Sharkey, referred. I pointed out that we are an international outlier in this matter, so that is the Government's view.

The reason we are doing this, once again, is that we believe that it is in the interests of savers to have a small, risk-adjusted diversification within the context of a portfolio; we believe that it is the best thing for savers. DC pension providers themselves have recognised that a small allocation to private markets can offer better risk-adjusted returns as part of a diversified portfolio. The noble Baroness has offered one view as to why people are not doing this. In our view, many providers have so far not done it not because it is necessarily in savers’ best interests not to do it but because of competitive pressure to keep fees low or because of a lack of scale, among other reasons.

Secondly, if the Government ever came to consider exercising these powers, they would first have to publish a report considering the impact of the proposed asset allocation requirements on savers. Crucially, that is an opportunity to confirm that bringing forward the requirements is in savers’ interests, based on the circumstances at that time. I say to the noble Lord, Lord Vaux, that there is also a report required after the powers are used and within five years. Thirdly, if the Government ever did implement the requirements, the legislation provides for a formal process under which providers could apply for an exemption based on evidence that meeting the requirements would cause savers “material financial detriment”.

Crucially, savers will continue in all circumstances to be protected by the core fiduciary duties of trustees. Specifically, trustees would continue to be subject to a duty to invest in savers’ best interests, in line with the law. This comes down to the fact that the Government are not mandating trustees to invest in any particular assets. Were these powers ever to come about, the trustee duty would apply, as I have said, to the selection of individual investments in a portfolio, to the balance of different asset classes in a portfolio, including the balance between private asset classes, and to any decision to apply for an exemption under the savers’ interest test. If a provider felt that the asset allocation requirement was not appropriate for their particular circumstances, we would expect the existing duties to guide them to submit an application under the savers’ interest tests.

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[Lord Palmer of Childs Hill (LD)]

Maybe that would be a good thing. I am not convinced that the regulator pushing away from primary legislation to regulation is necessarily the way forward. I am not convinced that what has happened to date has failed. Therefore, I am not sure why we want to change this without adequate proof. The idea that the FCA wants to swallow up everything else is fairly normal in the gladiatorial forum that we have. I would like to see what the FCA and others have to say about this before we make a final decision.

[Baroness Stedman-Scott (Con)]

My Lords, I speak to both Amendments 180A, tabled by my noble friend Lady Coffey, and Amendment 206, which stands in the name of my noble friend Viscount Younger of Leckie and myself. Both amendments address the regulation of pensions and how the regulation is best exercised in the interest of scheme members and future pensioners.

It was the intervention of my noble friend Lady Coffey at Second Reading that first prompted me to reflect more deeply on the role of regulators. As my noble friend argued then, and has argued again today in speaking to Amendment 180A, this Bill misses a significant structural opportunity by retaining two separate pension regulators. I agree with her. There is something inherently odd about the fact that very similar pension products can be treated differently depending on whether they fall within the remit of the Pensions Regulator or the Financial Conduct Authority. That observation is not controversial; it is simply a reflection of how the current system operates.

I recall clearly the passage of the then Pension Schemes Bill in February 2020 and remember responding to amendments from across your Lordships’ House by explaining that personal pension schemes were regulated by the FCA, rather than the Pensions Regulator, and that imposing requirements on personal pension providers through that legislation would risk creating a patchwork of overlapping regulatory oversight. Providers, it was argued, would otherwise be required to respond to two separate regulators in relation to the same activity. That was the Government’s position at the time, and it illustrates that the existence of regulatory fragmentation in this area is not a matter of dispute.

A great deal of work has gone into managing the fragmentation, with strategic documents, dating back to 2018, seeking to grapple with the issue. The FCA and the Pensions Regulator have published joint regulatory strategies explicitly acknowledging the complexity that arises where their remits intersect and the need for close co-ordination. More recently, an independent review of the Pensions Regulator in 2023 again highlighted the challenges inherent in this divided regulatory landscape. Taken together, these developments point to structural issues in the regulatory ecosystem that can, at the very least, create confusion and the risk of inconsistency.

It was on the basis of that experience in government and of careful consideration since then that I sought to identify what might realistically be done in this Bill. I came to the conclusion that Amendment 206 represents a proportionate and pragmatic compromise. It would require the Government to establish a formal published protocol setting out clearly how the Financial Conduct Authority and the Pensions Regulator co-ordinate, how responsibilities are divided between them and how they communicate when regulating the pensions industry. The evidence shows that there is complexity, overlap and, at times, confusion between the two regulators. Stakeholders frequently complain of unclear lines of responsibility and the regulators themselves openly acknowledge that co-ordination is difficult, hence the repeated reliance on joint strategies and informal arrangements.

It was our sense that the problem is one not of outright contradiction but of opacity, complexity and accountability. Amendment 206 is, therefore, carefully targeted at the problem, which is clearly evidenced. It seeks to improve co-ordination and clarity without asserting a level of regulatory failure that has not yet been conclusively demonstrated. That does not place it in opposition to the argument advanced by my noble friend Lady Coffey; indeed, I would be very happy to work with her, as we did so constructively on previous pension legislation, to strengthen this area further.

In my view, a formal co-ordination protocol has three important virtues. First, it can evolve over time as the regulatory landscape changes. Secondly, it can be tightened if problems persist or new risks emerge. Thirdly, it can itself become the evidence base for any future decision to pursue more fundamental consolidation of regulatory functions, should that ultimately be judged necessary. For those reasons, I commend Amendment 206 to the Committee and urge the Government to see it not as an obstacle but as a constructive and proportionate step towards greater clarity, accountability and confidence in the regulation of pensions.

[Baroness Sherlock (Lab)]

My Lords, I am grateful to the noble Baroness, Lady Coffey. Things are never dull when she is around. Frankly, that is quite a thing to say for a pensions Bill—I apologise to all the pensions nerds.

I thank noble Lords for introducing their amendments. The noble Baroness, Lady Coffey, said that her amendment would require the Secretary of State to do a review exploring the viability of moving the FCA’s pension regulation functions, apart from those for SIPPs, to TPR. On Amendment 206, the noble Baroness, Lady Stedman-Scott, wants a statutory joint protocol, formal co-ordination mechanisms, a published framework for oversight and the mandation of regular joint communication.

The Government keep the regulatory system under continuous review. The noble Baroness, Lady Coffey, has given us an absolutely fair challenge. As we have already found here, the reality is that, when you come to discuss this, some people are on team FCA, some are on team TPR and some—such as the noble Lord, Lord Fuller—do not like any of them and want to throw everybody else into the mix and have somebody reviewing all of them. So it is fair to say that it will not be easy to achieve consensus on this.

Let us come back to the principle. The Government’s view is that there is still a fundamental difference between trust-based and contractual pension schemes. Contract-based pension schemes are based on an individual contract with the saver. As the pension market continues to evolve, and as we move towards a more consolidated market, we will need to ensure that the system evolves with it and that there is more regulatory alignment where it is really needed. However, TPR, the FCA and other bodies, including the PRA, are on to this. So I suppose the exam question here is: do we need one regulator to take over the other, or is it possible to create a regime for regulatory alignment and joint working? I will try to make the case for the latter; the noble Baroness can tell me at the end whether I have a pass or a fail on the exam paper.

The Government’s view is that TPR and the FCA have distinct roles. Each has its own framework, reflecting the range of pension types and the need for tailored oversight. They operate under distinct statutory frameworks, and existing arrangements already enable effective co-ordination between them. TPR and the FCA have established a joint regulatory strategy that outlines their respective roles; that collaboration is underpinned further by a formal memorandum of understanding and, where necessary, joint protocols on specific issues detailing how the two regulators co-operate, share information and manage areas of overlap. They have published a joint document outlining their respective roles. They run joint working groups and consultations. They publish shared guidance, and they conduct regular joint engagement with stakeholders. These mechanisms are well established and provide the flexibility needed to respond to developments in the pensions market. That close collaboration ensures the same good outcomes for pension savers, regardless of legal structure, and aims to avoid the potential for regulatory arbitrage.

The noble Baroness, Lady Stedman-Scott, mentioned the independent review of the Pensions Regulator by Mary Starks in 2023. That review recommended that no changes should be made to the framework. The review concluded that it was far from clear what the benefits of shifting to a single regulator would be and whether that would in fact outweigh the costs and the risks of distraction.

Moving on, we do not believe that a statutory requirement for a joint protocol is needed, as proposed in Amendment 206. It risks duplicating existing arrangements and in fact replicating parts of the memorandum of understanding and joint regulation strategy that are already in place. Where specific regulatory risks would benefit from more formally aligned regulatory approaches, the organisations consider the need for a joint protocol. An example would be the 2019 joint approach to guidance for trustees and advisers supporting pension members with decision-making exercises.

We also do not believe that the review proposed by Amendment 180A is necessary at this time. We continue to keep the system under review to make sure that it continues to deliver. Any future changes need to be evidence-led and shaped through engagement with stakeholders. In the light of that, I hope the noble Baroness, Lady Coffey, will feel that I have passed the exam test and is able to withdraw her amendment.

--- Later in debate ---

[Baroness Coffey (Con)]

My Lords, I support Amendment 182 tabled by the noble Baroness, Lady Bowles of Berkhamsted. Gosh, superfunds—that has been quite a journey. It must be about six years ago that I apparently received a letter from Andrew Bailey, who I think was running the Prudential Regulation Authority at the time. I never actually received it, but I read it in the FT and on Sky. It told me that it all seemed very unfair compared with the Solvency II reform, which is what insurers had to go by. That is why I am strongly concerned about Clause 65(2)(a) being in this Bill.

I think we are seeing the hand of the ABI again here, trying to basically squeeze out other activity when we should be focused on what is in the best interest of the pension scheme members. We also want to try to make sure that we do not have never-ending firms going into the PPF. The superfunds, which I recognise the Government have embraced through this, are definitely a good option but are different to having an insurer buyout, even with some of the changes that have happened away from Solvency II to whatever version of Solvency UK. There has been more reform with less risk around some of the margins in that regard.

So I encourage the Ministers to think again about whether subsection (2)(a) is really the right approach for the outcomes they seek. Otherwise, why bother? Why bother having a superfund if you can get only the equivalent of what it is to get the insurer buyout?

I could go further, but I am conscious that the dinner business break is bringing exciting business and that the Committee wishes to finish by a certain time. So I will leave superfunds for another time, perhaps in the Bishops’ Bar. But, with that, I support my noble friend in Amendment 182.

[Baroness Stedman-Scott (Con)]

I will speak to Amendment 181 tabled by my noble friends Lady Noakes and Lady Altmann, and Amendments 182 and 183, tabled by the noble Baroness, Lady Bowles of Berkhamsted, and my noble friend Lady Altmann. I will also address the broader issue of the role of superfunds within our defined benefit pensions landscape.

At the outset, I want to be clear that my understanding is that the Government remain committed to creating a thriving and credible superfund market. That ambition is welcome because superfunds have the potential to support two important public policy objectives. First, they support member outcomes; properly regulated superfunds can improve security for members and, in the case of a run-on superfund model, they offer the additional prospect of enhanced benefits over time through the sharing of surplus and investment upside.

Women’s State Pension Age Communication: PHSO Report

Baroness Stedman-Scott Excerpts

Monday 2nd February 2026 Lords Chamber

I believe it was right to review the evidence and that, having done so, we have made the right decision based on due process and the body of evidence. At the same time, looking to the future, we are taking important steps to support women in retirement and help them to build a better life for themselves and their families. I commend this Statement to the House”.

[Baroness Stedman-Scott (Con)]

My Lords, I thank the Minister for repeating the Statement, but it does not, in my view, completely address directly the issue that lies at the heart of the anger felt by many WASPI women. I am assured that the maladministration identified by the ombudsman, and the associated question of a financial remedy, arose from decisions taken under a Labour Government that were the responsibility of Labour Ministers. In the years that followed, there was notable and sustained support from Labour Members for the WASPI campaign, including calls for compensation, voiced by individuals who now occupy the most senior positions in government.

Now that Labour is in power, that position appears to have been abandoned. The result is not merely disappointment, but a profound sense of betrayal. It is no wonder that WASPI women are furious. At no point in the Oral Statement, as far as I can see or understand, was this reversal acknowledged. Instead, attention was diverted towards general references to changes in the state pension age, which did nothing to address the specific findings of maladministration or the expectations that were so clearly raised.

There is a strong sense of frustration surrounding this issue, not only among Members of this House but, more importantly, among the WASPI women. Much of that frustration arises not simply from the substance of the decision but from the manner in which it has been handled and communicated by the Government. From welfare reform to the winter fuel payment, and now this, a pattern has emerged of poor communication and delayed decision-making. Too often, it is not the policy itself that causes the greatest anger but the uncertainty, delay and lack of clarity that surround it. Indecision is itself a decision. In this case, it has meant leaving people’s lives and expectations suspended for months.

In recent months, expectations appear to have been raised only to be lowered again. Following the ombudsman’s report, many campaigners believed that a different outcome was genuinely under consideration, only to be told once more that nothing had changed. The Minister will recall suggestions that decisions on this matter were left unresolved until after the general election in 2024. That is not entirely accurate. Statements made before the election set out the Government’s position with some clarity, which makes it legitimate for WASPI women to ask why more recent communications appeared to imply that the issue and situation remained open.

Against that background, can the Minister explain how the Government now intend to communicate their position clearly and directly to WASPI women? Will letters be issued setting out the decision and the reasons for it? If so, when and in what form will that communication take place? Given the strength of feeling among those affected, this must be treated with the gravity it deserves. More broadly, there is a sense that poor managerial experience has characterised the handling of this matter, further undermining trust.

That damage has been compounded by the contrast between earlier rhetoric and the position now being taken. The Deputy Prime Minister and the Justice Secretary spoke of a cliff edge facing WASPI women. The Foreign Secretary said she was fighting for a fair deal. The Chancellor said she wanted justice. The current Secretary of State for Work and Pensions publicly associated himself with MPs campaigning for a better outcome. Those who once stood beside them now appear, in their eyes, to have turned away.

I know that the Minister referred to pension credit and the importance of take-up, and I completely share that with her. I did my very best when I was in her position to make sure that we did everything we could to ensure that pension credit was taken up and increased. I am not sure if progress has stalled or whether there has been any improvement, so can the Minister clarify the position on take-up of pension credit and whether this can be used to placate some of these genuine WASPI women?

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for bringing this Statement to the House. The Government say the WASPI women should have known about the changes. I am reminded of a quote from the book The Hitchhiker’s Guide to the Galaxy:

“But the plans were on display … you found the notice, didn’t you? … It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard’”.


Another relevant quote from the same book said:

“All the planning charts and demolition orders have been on display at your local planning department in Alpha Centauri for 50 … years”.


The issue here is whether these women were communicated with adequately. Some 3.6 million WASPI women have been badly treated. They were given some hope; we have an ombudsman who made a recommendation to provide some justice and pay some compensation. Can the Minister say why this recommendation has been ignored? We have heard apologies but no compensation.

If you were a woman who knew that, at a certain age, you would receive a pension you probably did not give it another thought that the rules had changed. Of course, lots of announcements were made, and lots of letters were sent—sometimes belatedly, as the ombudsman said—but the truth is that the messages were not received or understood. The ombudsman has recommended compensation of £1,000 to £2,950 per person. I ask the Minister, very bluntly, why this recommendation has not been implemented. It is not a question of justice, but a reluctance to spend money on a group of people who cannot fight back.

Can the Minister take back to her colleagues in the department that there is a feeling—I hope—across this House that the WASPI have been maltreated and that the least they should expect is for the recommendation of the independent ombudsman to be put into effect? It is not enough, in my view, but it has come from the ombudsman, and I would like to hear what reasoning the Minister can give for ignoring this. I hope that she will take back to her colleagues in the other House and in the department the feelings of this House that the ombudsman’s decision should be honoured.