Social Security (Up-rating of Benefits) Bill

Guy Opperman Excerpts

Committee stage & 3rd reading
Monday 20th September 2021 Commons Chamber

[Guy Opperman)]

This is a short, two-clause Bill that sets out the way in which we will go from a triple lock to a double lock. I have set this matter out on Second Reading in great detail and I respectfully beg to move.

[Matt Rodda]

I want to speak to the new clauses tabled in the name of my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) and the hon. Member for Glasgow East (David Linden).

As we heard on Second Reading, there are a number of important areas that the Government seem to have overlooked. Those failures and omissions are part of a pattern of behaviour by the Prime Minister and his Government. They show a casual approach to their responsibilities. As a result of that behaviour, they are undermining trust in the Government. The Government’s approach could have a damaging effect on millions of pensioners and indeed on the public as a whole.

Before turning to the amendments, it is worth considering the fact that the Government have still not offered any reassurance on their commitment to the triple lock in the long term. It is still not clear whether Ministers are leaving the door open to scrapping this important policy. I ask the Minister and the Secretary of State to set out a meaningful commitment to the triple lock, justify the decision to remove the earnings link, and explain why the Government have not found a way to keep the link, such as by providing a link to earnings over a longer period of time. With three broken promises in just a few short weeks, the Government have little credibility left and they now need to rebuild trust in this important area of policy, and in their work as a whole.

On the new clauses, colleagues from across the House are right to raise concerns about pensioners, particularly those on lower incomes. Recent research published by the Joseph Rowntree Foundation reiterates this. While there was a “dramatic reduction” in pensioner poverty between 1997 and 2012, the last few years have seen that progress “unravel”. House of Commons Library research shows that before housing costs, 19% of pensioners were living in poverty. After taking housing costs away, 18% were living in poverty. The problem is much worse for women than for men. Women make up—

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[Guy Opperman]

The answer to the question asked by the hon. Member for Glasgow East (David Linden) is that this is a one-year-only Bill and that the triple lock will resume after its duration. In respect of the requirement for a report, he and the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) should be aware that the Department already collects and publishes a wide range of data in this policy area, which is published annually in the HBAI—households below average income —series of reports. In fact, I have a copy here, which is available on gov.uk; the most recent report is dated 25 March 2021. I can assure the Committee that the Government will continue to publish actual data on public health and poverty as it becomes available, but no specific data would be available by May 2022, as is sought.

I will not go into what the powers are under sections 24, 26 and 28 of the Scotland Act 2016, but I can assure the hon. Member for North Ayrshire and Arran (Patricia Gibson) that I disagree with her view. I maintain that the powers are there under the Act.

In the circumstances, I ask hon. Members not to press their new clauses.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

New Clause 2

Review

“(1) The Secretary of State must, no later than 6 months after the date on which this Act is passed, lay before Parliament a report containing an assessment of the impact of this Act on levels of poverty among pensioners in—

(a) Scotland,

(b) Wales, and

(c) England.”—(David Linden.)

This new clause would require the Secretary of State to lay before Parliament an assessment of the impact of the uprating next year by price inflation instead of earnings growth on levels of pensioner poverty in Scotland, Wales and England (the Bill does not extend to Northern Ireland).

Brought up, and read the First time.

[David Linden]

I beg to move, That the clause be read a Second time. I know that the hon. Members who suspended proxy voting and brought back in-person voting will be very keen to vote tonight, so I would like to divide the Committee on the new clause, which stands in my name and in that of my hon. Friends.

Question put, That the clause be read a Second time:—

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[Guy Opperman]

I want to put on record my thanks to my private office and the policy teams at the Department for Work and Pensions. I also want to make it very clear that this is a one-year Bill, by reason of the pandemic, and that the triple lock will resume after the Bill’s duration. We increased the state pension by 2.5% last year and we will increase it by 2.5% on prices this year. We spend £129 billion on pensioners—that is £105 billion on the state pension and £24 billion on the top-up benefits—and this Government will continue to support pensioners now and on an ongoing basis. I commend the Bill to the House.

Question put, That the Bill be now read the Third time.

Social Security (Up-rating of Benefits) Bill

Guy Opperman Excerpts

2nd reading
Monday 20th September 2021 Commons Chamber

[David Linden]

I am grateful to the hon. Gentleman for finding the time to come to the House of Commons this evening; I know he will be balancing his obligations—

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

No answers.

[David Linden]

The Minister chunters from a sedentary position. I outlined earlier in my speech that we want pensions much more in line with those of, for example, Austria and Luxembourg. I hope that that answers the question.

The SNP will vote to reject this legislation, but in the passing of this Bill tonight we will see yet another Better Together myth burst: that pensioners are somehow protected by Mother Britannia. To be blunt, to allow the Bill to proceed tonight will not only violate the contract offered to voters by the Prime Minister in 2019—and, indeed, by the hon. Member for Moray—which won a handsome majority in this place, but make a mockery of the no campaign’s claim that Scotland remaining in this broken Union is the best deal for UK pensioners when it is patently not.

The SNP will vote to reject this legislation, but in truth we all know that the democratic deficit throughout these islands means that Scotland’s MPs will be outvoted when we try to protect pensioners’ incomes. That is why the only way to truly tackle the plight of pensioner poverty is with Scottish independence, because Westminster is not working and we need to retire from this United Kingdom.

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[Wendy Chamberlain (North East Fife) (LD)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House, while recognising the extraordinary circumstances of the covid-19 pandemic, declines to give a Second Reading to the Social Security (Up-rating of Benefits) Bill because it represents a broken manifesto commitment made by the Government at the last General Election, fails to address the impact of the pandemic on the two million pensioners living in poverty and fails to increase key benefits, such as making permanent the uplift to Universal Credit.”

The Government are on track to break yet another of their manifesto promises. It is another example of how this Government are willing to turn their back on people living in poverty—now it is pensioners, but next month it will be those on universal credit.

The Liberal Democrats want Britain to be the best place in which to live and to retire, but, frankly, we all accept that it is far from that. People who have worked hard and paid taxes all their lives deserve a comfortable retirement when the time comes. It was our party that was instrumental in putting the triple lock in place, providing a lifeline to millions of pensioners who had seen increases as derisory and as low as 75p per year.

When pensions were only pegged to price inflation, their real value shrunk to one of the lowest in the developed world. We all deserve to live in dignity, to be able to afford food and heating, and to be able to live a life with some meaning or enjoyment, and reaching retirement age does not and should not change that.

There are more than 18,000 people in my constituency claiming the state pension, which is over 20% of the local population. They have worked, paid taxes, raised families, and built communities, and I want them to know that they are visible. The Conservative party clearly does not feel the same about their local pensioners, with the 20 hardest hit constituencies all being represented by Conservative Members. The Secretary of State’s own constituency is the fifth most affected by this broken manifesto commitment.

We all accept that we have lived in exceptional times over the past 18 months, and that earnings growth this year is out of the ordinary, but the big picture here is that this Government are refusing to take any action to lift any group out of poverty. The refusal to do so highlights the hollowness of the phrase “levelling up”. They are cutting universal credit, taking away vital income from 5.5 million households, and pushing thousands of families further into poverty. They have refused throughout to increase legacy benefits at all, ignoring the needs of recipients who are disproportionately disabled. Technical issues were given as the reason for this, but, 18 months on, a lack of appetite seems to be the more obvious case.

The decision to increase national insurance is a further tax on young people, on working people—those who have already been hit the hardest by the pandemic. We know that people are willing to make sacrifices when it is needed—we have seen that during the pandemic—but a part of that must be seeing that we all follow the same rules. There must be a fairness in what is being asked of us. There cannot be one rule for them and one rule for us, which, sadly, is what we see time and again from this Government.

This Government’s habit of breaking their promises makes me very wary of this Bill. We might be told that this change is just for one year, but they also promised no increase in tax in their manifesto and they have just increased national insurance.

[Guy Opperman]

I am listening with great interest to the hon. Lady’s speech. I just want to know whether she agrees with Sir Steve Webb, the esteemed former Pensions Minister, who, for five years, represented her party in this House and who indicated on 16 June that he strongly supported the sort of change that the Government propose tonight, but that she opposes.

[Wendy Chamberlain]

I thank the Minister for his intervention. I am grateful to have the opportunity to respond to him, especially as the Secretary of State did not give me that opportunity.

I agree that we have seen extraordinary circumstances over the past 12 months, including significant increases in wages, causing this anomaly, but what this Bill fails to do—I will have this conversation with my friend, Steve Webb—is help those of working age in poverty through maintaining universal credit, or pensioners themselves.

The Bill has only two clauses and five subsections. It fails to address any of the problems with the state pension, or to assess the impact of suspending the triple lock. There are already 2 million pensioners living in poverty, the majority of whom are women and/or from black and Asian communities. This Bill ignores them and the disproportionate impact that suspending the triple lock will have on people already struggling. The promises made by a party in their manifesto matter. It is the essence of the mandate that they claim.

Just last week, during the urgent question on transport, the Transport Secretary welcomed increases in wages and hoped that they continued and were sustained. That is the whole point of the triple lock; it is about helping pensions to keep up with the cost of living.

Women have already been left behind when it comes to the state pension, with those born in the 1950s—the WASPI women—being unfairly penalised by the Department for Work and Pensions’ failure to properly notify them about the change in pension age. Women who had worked hard and planned for retirement suddenly found themselves without either. With women more likely to rely on the state pension than men, this policy is another damaging blow.

Last year, I talked about the importance of the triple lock for intergenerational fairness. This Bill is not just of interest to those of state pension age. Unless we truly trust that this Government will keep their promise—and there is no evidence to show that this will be any different from the other broken promises over the past two years—this will impact everyone. Jobs for life and final salary pensions are a thing of the past. It is harder than it has been in recent memory to get on to the housing ladder. It is fair and right that young people today are able to look ahead to a state pension, but if we return to the days of minimal increases to pensions, they will be impacted, too.

I am asking the House to support the amendment tabled by the Liberal Democrats for all the reasons that I have outlined. While there is no doubt that the pandemic has required exceptional measures, this Bill was an opportunity for the Government to support poorer pensioners and to right previous wrongs, and it is an opportunity that they have ignored. Why is there no impact assessment on how this will affect groups already disadvantaged under the pension system? I hope the Minister will address that in his closing remarks. Why do the Government continue to ignore the needs and wants of ordinary people, and why do they think that anyone will trust their word given what has happened over the past few weeks?

The public deserve better than these broken promises, better than this Government, and the 2 million pensioners living in poverty certainly deserve better than this Bill.

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[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I thank the 13 colleagues who have contributed to a wide-ranging debate. The Bill makes technical changes to set aside the earnings link for 2022-23. We will instead increase the relevant pensions and benefits by at least the higher of inflation or 2.5%. This approach will ensure that pensioners’ spending power is preserved and that they are protected from the higher cost of living, but it will also take into account the difficult decisions elsewhere across public spending.

The practical reality is that many issues were raised tonight, not least pensioner poverty. I would respectfully remind the House that pensioner poverty is going down, not up. As a result of the triple lock since 2010, the full yearly basic state pension has increased by £2,050 in cash terms. There are 200,000 fewer pensioners in absolute poverty, both before and after housing costs, as compared with 2009-10, and material deprivation—an alternative way of measuring poverty—is at an all-time low of 6% of pensioners.

[Stephen Timms]

Will the Minister give way?

[Guy Opperman]

One second.

It is worth reminding ourselves that the spending on state pension used to be £99 per person, and less than £60 billion in total—when in fact the right hon. Gentleman was the Pensions Minister under the Labour Government. Those figures are now up to £137 or to £179, and to £105 billion.

[Stephen Timms]

I am very grateful to the Minister for giving way, and I am delighted he is still in his post. He talked about pensioner poverty, but rather idiosyncratically, he is using the absolute measure. The much more widely used measure is the relative measure of poverty, on which the analysis of Independent Age is based, and on that much more widely used measure, pensioner poverty is of course going up.

[Guy Opperman]

I am not going to repeat the points I have made, but I manifestly disagree with the right hon. Gentleman. I would point out that we could add on the £24 billion of top-ups that this Government put forward over and above the £105 billion of state pension, so with respect we are in disagreement. There is also a significant degree of support for winter fuel, NHS prescriptions, free eye tests, the over-75s free TV licence and a variety of other matters.

[Patricia Gibson]

Will the Minister give way?

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[Guy Opperman]

No, not for the moment.

SNP Members raised many points, and I want to address them. No mention was made, surprisingly, of the powers under sections 24, 26 and 28 of the Scotland Act 2016, which give the Scottish Government the ability to intervene on such matters, should they wish to do so, including the WASPI matters. No mention was made in answer to my hon. Friend the Member for Moray (Douglas Ross), who asked what currency an independent Scottish pension would be paid in. No mention was made of the ability to pay Scottish pensions upon independence, because of course answer there is none.

Reference was made to pension credit take-up, and I want to address the points made.

[Patricia Gibson]

rose—

[Guy Opperman]

I am about to answer the points the hon. Lady raised specifically, if she will bear with me.

Pension credit take-up was raised. We are doing a variety of things on that, including the pension credit awareness day in June, the engagement with the BBC—I met its chief executive only last week—the stakeholder roundtable in May, and the working group established with all the key partners in this matter, let alone the various other ways in which we have changed things and the over 11 million communications to pensioners up and down the country. The Government are proud of their record.

[Jim Shannon]

rose—

[Guy Opperman]

I will give way to the hon. Gentleman for the last time, because I respect him so much.

[Jim Shannon]

I appreciate the Minister’s response tonight in relation to pension credit, but in Northern Ireland 15% of pensioners are consistently in fuel poverty and poverty overall. Is the Minister prepared to give extra emphasis to Northern Ireland and help us beat that pensioner poverty?

[Guy Opperman]

I am reminded by the Secretary of State that that is a transferred matter, and the hon. Gentleman will be aware that pension credit take-up is increasing, as is the amount of pension credit going to individuals.

I must turn briefly to the reasoned amendment, which was put forward by a solitary Lib Dem—admittedly, there are not many of them in 2021 so I understand that. It used to be a serious party—a party that understood the fiscal pressures facing Government. Now, to be blunt, it is being reduced to a party of protest, with, it seemed to me, about 15% of its MPs conducting their party conference in the backroom of a Travelodge somewhere on a business park. The practical reality is that the party of Asquith, Gladstone, even Ashdown, is now putting forward something devoid of ideas. It is a party of protest. and we do not agree with it in any way.

We are proud of the fact that last year, when we had no obligation to do so, we took the dramatic and important decision to raise the state pension by 2.5%. We will be raising the state pension by prices or 2.5% when this Bill passes, and pensioners will be protected on an ongoing basis, so I commend the Bill to the House.

Question put, That the amendment be made.

Oral Answers to Questions

Guy Opperman Excerpts

Monday 13th September 2021 Commons Chamber

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

8. What steps her Department is taking to support pensioners living in poverty.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Thank you, Mr Speaker—diolch. There are now 200,000 fewer pensioners in poverty compared with 2010. Rates of material deprivation among pensioners are at a record low, falling from 10% to 6% in the last 10 years. Pension credit also provides financial support for the most vulnerable pensioners and a passport to many other benefits.

[Jonathan Edwards]

Diolch yn fawr iawn, Mr Speaker. Older women in particular find themselves in relative poverty because 30% completely rely on the state pension for their income. That makes the recent findings by the Parliamentary and Health Service Ombudsman about maladministration by the Department and its failure to inform 1950s-born women about changes to their state pension allowance particularly galling. What is the Department’s response to the findings of the ombudsman and, more importantly, what will be done to rectify the situation that WASPI women in my constituency find themselves in?

[Guy Opperman]

The hon. Gentleman will be aware that we have never spent as much as we do now on pensions. The triple lock has seen a £2,050-a-year increase in cash terms. The Government decided the changes 26 years ago, and that policy was continued by successive Governments, including during the 13 years of the Labour Government. In respect of all matters on an ongoing basis, we consider the PHSO, but clearly, it is a three-stage process and we are only at stage 1.

[Matt Rodda (Reading East) (Lab)]

People across this country work hard and contribute all their lives; they are right to expect the state pension to be there for them when they retire. Given that the Government have failed to pay the state pension on time and have broken three manifesto promises so far, Ministers can surely accept that pensioners and the public cannot simply take them at their word. Ahead of our consideration of the Social Security (Up-rating of Benefits) Bill next Monday, will the Government publish their evidence for breaking the link with earnings in this way?

[Guy Opperman]

I am not sure that I am going to take any lessons from the hon. Gentleman. Before 2010, when the coalition came into power, the state pension was under £100. The new state pension is now £179. We have raised it by £2,000 in the last 10 years. We have enhanced the state pension massively through the triple lock. We did not even need to do anything last year, but we raised the state pension by 2.5%, and we will be increasing it by the double lock if the Bill passes next week.

[Jon Trickett (Hemsworth) (Lab)]

10. What steps her Department is taking to help implement the Government's levelling-up agenda.

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[Henry Smith (Crawley) (Con)]

22. How many people have been auto-enrolled in workplace pensions in Crawley constituency since 2012.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

My hon. Friend is a doughty champion for Crawley. It is fantastic news that 35,000 people have been automatically enrolled into a workplace pension in the Crawley constituency as a whole. That is also thanks to the 1,600 employers who have supported them in their auto-enrolment duties.

[Henry Smith]

Those are very impressive statistics that prove that this Government’s policy of auto-enrolment has been a great success. Will the Minister join me in paying tribute to auto-enrolment pension providers such as B&CE—The People’s Pension—which is based in my Crawley constituency?

[Guy Opperman]

I was delighted to meet The People’s Pension with my hon. Friend a couple of years ago and see the fantastic work that it does. It has more than 5 million members and is one of the largest providers in this important market. I am sure that we will continue to work with it as we expand automatic enrolment, take it to the first £1 earned and lower the entitlement age as we bring forward the 2017 automatic enrolment changes.

[Karin Smyth (Bristol South) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

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[David Linden (Glasgow East) (SNP)]

Many pensioners will be relying on pension credit to get by after the Tories’ brutal triple lock betrayal. Will the Secretary of State follow Scotland’s lead and commit herself to introducing a proper take-up strategy for reserved benefits, including pension credit, and will she consider the automation of payments to ensure that more people receive the support to which they are entitled?

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

The hon. Gentleman will be aware that pension credit take-up has improved, not least through the actions of this Government. For example, we have seen the pension credit action day in June this year, the partnership that we have entered into with the BBC and Age UK, and the working group that we have. I continue to work with the BBC and I met the chief executive, Tim Davie, only last week.

[Joy Morrissey (Beaconsfield) (Con)]

T8. It is vital that disabled people are able to play an active role in public life, particularly those with visual impairments. Will my hon. Friend therefore update the House on what the Government are doing to support this?

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[Matt Hancock (West Suffolk) (Con)]

Could the Secretary of State—or the Minister for Pensions, who is doing such great work in this area—explain what they are doing to ensure that when pensions are invested, the environmental, social and governance agenda is about incentivising high-quality sustainable products across the world, for instance in Africa, and not just becoming a box-ticking exercise here at home?

[Guy Opperman]

I will take my right hon. Friend’s compliment. The UK is the first country in the world to address the social elements of ESG. We have produced a call for evidence, “Consideration of social risks and opportunities by occupational pension schemes”, and I would encourage everyone to get involved with that. That will genuinely transform the supply chain, access to finance and investment in all parts of the world, but particularly in respect of Africa.

[Paula Barker (Liverpool, Wavertree) (Lab)]

T2. When a domestic abuse survivor decides to leave an abuser, having a safe, affordable place to escape to is key. Otherwise, they face the risk of homelessness. The benefits system should be there to protect women and children who need to escape, but unfortunately it can often act as a barrier—for example, when a survivor leaves a working household that is not subject to the benefit cap and then becomes a lone parent in an out-of-work household that is subject to the cap. Will the Secretary of State commit today to exempting domestic abuse survivors from the benefit cap so that they can have the best possible chance of accessing a safe and affordable home?

Draft Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021

Guy Opperman Excerpts

Tuesday 7th September 2021 General Committees

[The Chair]

Before we begin, may I encourage Members to wear masks when they are not speaking? That is in line with current Government guidance and that of the House of Commons Commission. Please give each other and members of staff space when seated and when entering and leaving the room. Members should send their speaking notes by email to Hansardnotes@ parliament.uk.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I beg to move,

That the Committee has considered the draft Occupational Pension Schemes (Administration, Investment, Charges and Governance) (Amendment) Regulations 2021.

Thank you, Ms Rees, for your chairmanship.

The regulations continue the Government’s reform of the defined contribution automatic enrolment pension schemes. Thanks to automatic enrolment formulated under the Labour Government, brought forward under the coalition and very much expanded under this Government, 10 million-plus of our citizens are now saving 8% in occupational pensions. That is something of which we should all be very proud and it affects each and everyone’s constituency; there are over 10,000 members in pretty much every constituency up and down the country, sometimes many more than that, who are now paying into an automatic enrolled pension.

The regulations ensure that the best interests of those savers are driving the administration, governance and investment strategies of those schemes. We are introducing a new value-for-members assessment that will ensure that members of smaller schemes are not suffering from poorly governed, underperforming schemes. The regulations also require the trustees of certain occupational DC schemes to publish information on the performance of their investments for the first time and we will ensure that the competition on overall member value replaces a narrow focus on cost. By allowing occupational DC schemes to smooth performance fees within the charge cap, it will make it easier for trustees to pay higher fees but only where they have evidence that that will produce greater returns to members.

The Government are genuinely committed to building on the success of automatic enrolment with a consolidated, innovative, member-focused market for saving in occupational DC schemes. I commend the regulations to the Committee.

[Matt Rodda (Reading East) (Lab)]

We are told that this instrument seeks to increase the requirements placed on trustees of occupational defined benefit schemes in order to require trustees of some schemes to disclose investment returns and demonstrate value for members. It also aims to increase flexibility by altering the rules on the charge cap and other technical changes.

As my colleagues in the other place set out yesterday, we understand that the proposed changes are designed to enable and encourage DC schemes to invest in a broader range of assets, including private equity and venture capital, the theory being that that will benefit the British economy and indeed the interest of pension scheme members. I am told, however, that the Government have been lobbied heavily by the private equity sector on this matter. Given the pressure on time, and the issues being discussed in the Chamber, I ask the Minister whether I may write to him to explore some of the more detailed issues within the regulations.

[Guy Opperman]

I would be happy to write to the hon. Gentleman in full detail in response to any and every question that he wishes to raise.

[Matt Rodda]

Thank you.

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[Guy Opperman]

I can briefly answer both points. To take the 2017 automatic enrolment review, which is starting from the first pound and obviously extending automatic enrolment, it is absolutely the Government’s intention to achieve that by the mid-2020s. It is obviously a process that needs to be gone through with the Leader of the House and with the Prime Minister. It is slightly above my pay grade as to when that comes in, but it is definitely the intention, and we have gone on record to say that it will be in place by the mid-2020s.

In respect of consolidation and small pots, the hon. Member for Glasgow South West will be aware from his work on the Select Committee that we are doing a lot of work on de minimis small pots to ensure that they are not swallowed up by the charges. We are bringing forward legislation to address the issue faced by people with multiple small pots that are eaten away by charges. We are consulting on how to legislate, engaging with industry, the Pensions and Lifetime Savings Association and other organisations to achieve that. The findings of the 2017 review will make a great difference in terms of the gender pay gap and the extent to which there is a pensions disparity. I am happy to write to both hon. Members in more detail to set out things so that they have a full version from me.

Question put and agreed to.

Draft Pensions Regulator (Employer Resources Test) Regulations 2021

Guy Opperman Excerpts

Wednesday 21st July 2021 General Committees

[The Chair]

Before we begin, I remind Members that Mr Speaker has stated that the wearing of masks is encouraged. Hansard colleagues will be most grateful if Members could send their speaking notes to [e-mail].

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I beg to move,

That the Committee has considered the draft Pensions Regulator (Employer Resources Test) Regulations 2021.

It is a great pleasure to serve under your chairmanship, Ms McVey. The draft regulations were laid before this House on 28 June. It is the mission of this Government to make pensions safer, better and greener, and the Pension Schemes Act 2021 has definitely taken things forward. It strengthens the powers of the Pensions Regulator, and fulfils our manifesto commitment to take action against those who think that they can plunder the pension savings of hard-working employees.

The draft regulations provide essential details on the new employer resources test, which forms part of the Pension Regulator’s contribution notice regime. The regime enables the regulator to demand that money is paid into a pension scheme from those who have caused detriment to the scheme. A recent example is Dominic Chappell, who was ordered to pay £9.5 million by the regulator into the British Home Stores pension schemes. The new employer resources test that the draft regulations relate to will enable the regulator to overcome existing challenges of assessing the act, or failure to act, that has affected the financial strength of the sponsoring employer and therefore its ability to support the scheme, rather than damaging the scheme directly.

With the new provisions, we will also avoid the associated challenge of having to assess the future likelihood of members receiving their accrued benefits. In addition to looking at the health of the employer, the regulator also has a focus on the scheme, where it is required to assess the reduction of material compared with the scheme’s estimated section 75 liability. We remain committed to ensuring that there should be no place for those who put workers’ retirement savings at risk. The draft regulations will play a vital role in enhancing the regulator’s ability to protect pension scheme members, and I commend the regulations to the Committee.

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[Guy Opperman]

I am grateful for the hon. Gentleman’s support for the principle of the regulations. I can assure him that the Pension Regulator and I have engaged extensively with stakeholders over the past three years during the build-up, passage and implementation of the Pensions Schemes Act 2021.

As for the regulator’s staffing and resources, the hon. Gentleman will be aware that its budget has effectively increased by 100% in the past five years. Although it is quite clearly adjusting to the new burdens in the 2021 Act, at the same time some issues have lessened. For example, auto-enrolment occupied a massive part of the regulator’s time when it was launched in 2012, but it is now not such a large issue.

Regulations are always kept under review, and the hon. Gentleman and I can happily discuss them on an ongoing basis. As for the profit before tax measure, he is correct that we have provided the regulator with a tool to make a simple snapshot assessment of the impact of an act, or the failure to act, by an employer. It was selected for measuring the resources of an employer because the term is widely understood by the industry and the regulator and, on that basis, it was shown to be an appropriate test.

As for ensuring that defined benefit schemes continue, the whole purpose of the DB White Paper and the 2021 Act is to ensure that this Government continue to support DB and members with a DB pension. Aside from DB, we are also developing the third way—not to be too Clintonian in the matter—with collective defined contribution pensions, which represent a genuine alternative for employers, employees and unions. I commend the regulation to the Committee.

Question put and agreed to.

Office for Nuclear Regulation: Annual Report and Accounts

Guy Opperman Excerpts

Tuesday 20th July 2021 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

My noble Friend the Parliamentary Under-Secretary of State for Work and Pensions, Baroness Stedman-Scott, has made the following written statement.

Later today I will lay before this House the “Office for Nuclear Regulation Annual Report and Accounts 2020 to 2021”. These documents will also be published on the ONR website.

I can confirm, in accordance with schedule 7, section 25(3) of the Energy Act 2013, that there have been no exclusions to the published documents on the grounds of national security.

[HCWS213]

Bereavement Benefits Remedial Order

Guy Opperman Excerpts

Thursday 15th July 2021 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

My hon. Friend the Under Secretary of State, Department for Work and Pensions (The Baroness Stedman-Scott) has made the following written statement:

We have today laid the draft proposal for a Bereavement Benefits (2021) Remedial Order. Copies of the draft proposed remedial order and explanatory memorandum are available in the Journal Office and the Vote Office (Commons) and the Printed Paper Office (Lords).

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Draft Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021

Guy Opperman Excerpts

Monday 5th July 2021 General Committees

[The Chair]

Before we begin, I remind Members to observe social distancing and to sit only in the places that are clearly marked. I also remind Members that Mr Speaker has stated that face coverings should be worn in Committee unless Members are speaking or they are exempt. Hansard colleagues would be grateful if Members could send their speaking notes to hansardnotes@ parliament.uk.

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I beg to move,

That the Committee has considered the draft Occupational Pension Schemes (Climate Change Governance and Reporting) Regulations 2021.

The draft regulations were laid before the House on 8 June. This House is leading the way on ensuring that climate change is tackled with our pension system. We are the first country in the G7 to legislate to reach net zero by 2050. We are leading the way on the environmental, social and governance reforms that will transform the way pensions are invested, and with the Pension Schemes Act 2021, which the House passed earlier this year, we have made massive strides. The key stride that we have made is that we have put what is called the Taskforce on Climate-related Financial Disclosure—the TCFD; a catchy title, I accept—into legislation. We are the first country in the entire world to do so, which is something that this Parliament and this country should be exceptionally proud of.

We did that because climate change is the defining issue of our time. Our response will determine not only the future health and prosperity of our world; it is also a major systemic financial risk and threat to the long-term sustainability of UK private pensions. That matters because we are talking about £2 trillion-worth of assets under management. All occupational pension schemes, irrespective of their size, structure or investment strategy, are exposed to climate-related risks. Those risks present a significant threat to the retirement outcomes of millions of savers and all our constituents.

It is therefore vital that we ensure that pension schemes, and their governance, are as robust as possible to withstand those risks in both the short and the longer term. The draft regulations deliver on the commitments set out in the Government’s green finance strategy, requiring large asset owners to disclose in line with the recommendations of the TCFD by 2022. The measures will see the UK become the first country in the world in which trustees of occupational pension schemes are statutorily required to consider, assess and report on the financial risks of climate change within their portfolios.

The draft regulations impose requirements on trustees of larger occupational pension schemes, authorised master trusts and, once established, authorised collective money purchase schemes—known as collective defined contribution schemes—to identify, assess and then manage climate-related risks and opportunities. That includes requirements relating to governance, strategy and risk management, and requirements to select and calculate climate-related metrics and to set and measure performance against targets. Trustees will be required both to meet the climate change governance requirements, which underpin the recommendations of the TCFD, and to report on how they have done so in line with the taskforce recommendations.

The largest schemes and authorised schemes will be captured from 1 October 2021. We have made massive efforts to ensure that this is in play and in law prior to COP26 in Glasgow. From 1 October 2022, the draft regulations will apply to more than 70% of pension assets and more than 80% of pension members. The impact of the draft regulations will be significant and transformative. By the end of 2023, the risks and opportunities that climate change poses to £1.33 trillion-worth of pension savings will be assessed and published for all to see. Critically, that develops a system of accountability that we have never had before, and trustees will be required to show how climate change is likely to affect their portfolio.

With respect, this is the most transformational piece of legislation because it puts the consumer back in charge of how their pension is spent, so I commend the draft regulations very strongly to the Committee.

[Matt Rodda (Reading East) (Lab)]

I would like to start by reflecting on the existential threat of climate change and the climate emergency. We are facing the most serious threat to humanity that we have ever seen. If allowed to carry on unchecked, the rate of temperature increase will dramatically change the world and will unleash a series of geological and environmental processes that will take us on an unsustainable trajectory to massive change to the climate.

So far, the Government’s response has been weak. The Prime Minister’s words have not been backed up by action on the scale that the emergency requires. The Government’s 10-point plan has failed to meet the scale of ambition needed. The Government are veering significantly off course to meet their legally binding 2050 net zero target. Quite simply, it is not good enough, yet it is all the more important in the year of COP26. The world is looking to the UK to show global leadership, but we must start at home if we are to do anything. We need credible action to increase the pace if we are to achieve the substantial majority of our emissions reductions by the end of this decade. That requires leadership, both at home and on the world stage.

A Labour Government will replace the Government’s piecemeal approach with a green new deal—a comprehensive plan for the transition to a low-carbon economy. Last week, after our questioning, it emerged that the Chancellor’s final report into the net zero review will be further delayed. The report was first due to be published in autumn 2020, and then in spring 2021. It has still not been published.

To show even further the scale of the slippage, last week the UK’s independent adviser on tackling climate change, the Climate Change Committee, which is headed by Lord Deben, a former Conservative Minister, revealed that the Treasury has not fully achieved a single one of the Committee’s 2020 recommendations. That is the context in which we are working.

I must move on to the scope for tackling climate change through pensions. It is worth noting—the Minister hinted at this—that it is a £1 trillion industry, with enormous potential to make real and lasting change and to protect us from the worst effects of climate change. Even on a tiny scale, a single pension has the ability—if invested properly—to take an amount of carbon out of the air equivalent to several cars being taken off the road. One individual person’s pension can make a difference. Imagine that scaled up across thousands or even millions of pensions. There is real potential to do some real good. The industry itself recognises that. The Path, a fund that advises on environmentally friendly investing, recently told the Financial Times that investing only a small amount in a more sustainable way could make a huge difference.

I want to reflect on the Pension Schemes Act and climate change, and putting those two parts together. When the Bill was introduced, instead of a net zero provision we saw no mention of net zero—a gaping hole that had to be dealt with on Second Reading. The Minister put a rather favourable gloss on that. The Government introduced amendments in Committee, which had to be strengthened through cross-party agreement and negotiation to ensure that trustees or managers had to take account of the Paris agreement and domestic targets such as net zero. Climate change was then mentioned for the first time in domestic pensions legislation. We should all be proud of that, but there is so much more to do.

I would like to stress that the Act could have gone a lot further. It could have been more ambitious but, sadly, the Government voted against the Labour amendment to allow regulators to mandate occupational schemes to develop an investment strategy aligned with net zero. Instead, we have this much less assertive statutory instrument in its place. Clearly, there remains a wide gap between the Government’s rhetoric and their actions on climate change, both in pensions and across a much wider field of policy.

Turning to the SI, I accept that it takes some steps forward. It sets out a duty on trustees and comes forward with a range of technical measures that are worthy in themselves. The SI has been consulted on and has wide-ranging support in the pensions industry and among stakeholders. However, many pensions firms and stakeholders want to go a lot further. To mention a few well-known names, Scottish Widows, Aviva, Nest, the BT pension scheme and some local government pension schemes have all signed up to Make My Money Matter, the green pensions charter that wishes to take things a lot further. It is clear that there is the will to do that among many players in the industry, who I have not been able to reference.

We have seen positive initiatives developed in other related sectors. I note, for example, that Mark Carney, the former Bank of England Governor, last week announced a taskforce on scaling voluntary carbon markets. I hope that colleagues will follow its progress and show the keen interest that it deserves.

Although the SI is worthy and necessary, I want to ask the Minister a series of questions that I hope he will respond to. First, does he really think that the Government are doing anywhere near enough to tackle climate change?

[Guy Opperman]

Yes.

[Matt Rodda]

I hope he will address that question more formally later. Secondly, what more can we do together on a cross-party basis to help the pensions sector tackle this enormous problem? Thirdly, will he write to me to set out the Government’s next steps? It is all well and good dealing with the regulations coming from the Act, but there is much more to do.

To sum up, the country, and indeed the world, faces an enormous challenge. Government policy is failing to address that and, as their own former Minister said only last week in the Climate Change Committee, the Government are seriously off track. The official Opposition have challenged and pressed for more action, some of which has been forthcoming. Today’s SI is helpful, but we need to see much more.

[Guy Opperman]

I am surprised and rather disappointed by the hon. Gentleman’s speech, because today we should be celebrating how this country is leading the way in the world. I will not go on to half-past 6, although I am tempted to, but part of his speech featured the words, “the world is looking for the UK to show global leadership.” Being the first country in the world to introduce TCFD shows great global leadership. Being the first country in the G7 to legislate for net zero shows global leadership. Leading the way in the implementation and application of ESG shows global leadership. On that basis, I utterly reject what he says.

The hon. Gentleman then asked whether we were doing enough to combat climate change. The answer is that there is always more to do. No one disputes that. But this country, and particularly the Department for Work and Pensions, led by my right hon. Friend the Secretary of State for Work and Pensions, and a fantastic team of officials, is doing everything we can.

I want to deal briefly with a Labour amendment to the Pension Schemes Bill. I have great respect for the shadow Secretary of State and for his predecessor, the shadow Minister for Pensions. The shadow Minister for Pensions and I disagreed on nothing whatever except for the one amendment that he tabled, which was misguided and exceptionally foolish, and I told him so very robustly, and I told the shadow Secretary of State. Why? Because it would have induced immediate divestment. The hon. Member for Reading East has to grasp this: who does he think will formulate, produce, create and then actually deliver carbon capture and storage, hydrogen, the fuel cells that we need, and tidal power? It will not be Government. It will not be an organisation in BEIS, however worthy BEIS might be. It will be industry, and industry needs the support of capital and investors.

The moment we introduce mandatory net zero in the circumstances of that amendment, it would inevitably result in immediate divestment. All that would happen is that the pension scheme trustees will divest out of these particular stocks and into, say, tech stocks. Even if that was a good idea, which it is not in the prevailing circumstances, here is the problem: they do not then support the people who will be creating these things. So, yes, we need to continue with stewardship and voting in the many different ways that we are already doing, and TCFD is part of that, and continue to work with these organisations to ensure that they have the capacity to create the engines of change that we all want. I wholeheartedly reject that approach.

I mean no disrespect, but I will not write to the hon. Gentleman. I am happy to sit down with him and explain the individual parts of the SI, but I do not think there is much point in my writing to him until he accepts the fundamental principles. If he still stands by the argument that divestment is the way ahead, I suggest he goes away and speaks to the Pensions and Lifetime Savings Association and all the member organisations, who so comprehensively identified that that was a disastrous approach to fiduciary duty and trustee empowerment. There are companies and pension schemes that are genuinely navigating their way with net zero pledges by a particular time, but they are doing that once they have looked at their portfolios and worked with the companies they are investing in. We cannot suddenly mandate that everybody will do it by this particular date in this particular way, because the consequences of such actions will be foolhardy.

I believe there is genuine leadership. I want to thank the team behind TCFD: the Secretary of State, who has supported the process throughout; Mark Carney, whom I met in January last year prior to the pandemic; the special advisers; the various policy officials; the Bill team; and my private office. There are too many to thank, but I will mention Thérèse, Lauren Thomas, Lisa Rumbold, David Farrar, Matthew McPherson and George Greville Williams, who all deserve great credit for all that they have done to explain, articulate, draft and drive forward this piece of legislation, which is game changing, and the first in the world in place prior to COP. I respectfully commend the regulations to the Committee.

Question put and agreed to.

BPDTS Tailored Review

Guy Opperman Excerpts

Thursday 1st July 2021 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

My noble Friend the Parliamentary Under-Secretary of State, Department for Work and Pensions (the Baroness Stedman-Scott) has made the following written statement.

On 29 September 2020 the outcome of the BPDTS tailored review was published. The review recommended the creation of a single departmental digital function for DWP—concluding that the strategic context and challenges which BPDTS was designed to address had fundamentally altered since its creation in 2016.

Action has now been taken to implement the recommendations and all BPDTS staff and functions will transfer to DWP on 1 July 2021.

From 1 July activities in BPDTS will focus on the closure of the company and the publication of final annual reports and accounts, with formal closure anticipated in early 2022.

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Oral Answers to Questions

Guy Opperman Excerpts

Monday 28th June 2021 Commons Chamber

[Matt Rodda (Reading East) (Lab)]

One of Britain’s best-known companies, P&O, has failed to pay £140 million that it owes to the merchant navy pension fund. This debt could cause serious problems for the fund, which has 24,000 members who work in a wide range of firms far beyond P&O. Despite P&O owing this enormous sum, the Government have awarded its parent company two lucrative freeport contracts. Will the Minister explain how on earth the Government allowed this to happen? We are getting used to sleaze and cronyism; is this an example of sleaze and cronyism, or is it sheer, unadulterated incompetence?

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

The hon. Gentleman is a member of the Labour party. He will recall that it was the Labour party that set up the Pensions Regulator with operational independence to deal with these matters. He may have forgotten the basis on which the Pensions Regulator was set up, but I have not. It is a matter between the Pensions Regulator and the individual company, but I am sure that he will take that up when he meets the Pensions Regulator.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

This is in no way a criticism of the very hard-working DWP staff in the north of Scotland, but, prior to covid, as the hon. Member for Glasgow East (David Linden) has pointed out, one-time face-to-face meetings did work. However, since covid, we have had virtual meetings, often followed by another virtual meeting and yet another virtual meeting, or even a face-to face, which has led to huge delays, and, if that is followed by an appeal, this is really unacceptable. Will the Secretary of State look at two things: first, will she ensure that we go back to timely face-to-face meetings; and, secondly, if there is a geographic element to this, because I represent such a huge constituency, could that be looked into as well with a view to sorting it out?

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[Liz Twist (Blaydon) (Lab)]

Some 2.1 million pensioners now live in poverty. Figures from Independent Age show that ensuring the uptake of pension credit could help to address that. My older constituents are losing out on up to £3.5 million in pension credit that is going unclaimed. Will the Secretary of State now produce a dedicated action plan to increase the uptake of pension credit?

[Guy Opperman]

As the hon. Lady should be aware, on 16 June we had a pension credit awareness day, working with Age UK, Independent Age, various other charitable organisations and the BBC to get greater uptake of pension credit, and I am pleased to say that pension credit numbers are improving. There is more to do, but we are working with stakeholders to ensure that that does happen.

[Chris Elmore (Ogmore) (Lab)]

On Friday, I was pleased to meet Carole Dawe, who is the manager of the Maesteg JCP office in my constituency. What came across was that this deeply dedicated team of people have been working right through the pandemic as one of the few front-of-house services that is still open, no matter what is put in front of them. Among the real concerns that were put to me was that they are doing an awful lot of bereavement support and that clients are arriving with significant mental health problems. What reassurance can the Secretary of State give me that, as we begin to open up, more support, training and, where needed, staff will be provided to ensure that our constituents get the very best support from what is becoming a lot more than just a simple jobcentre?