Universal Credit and Working Tax Credits
Jack Dromey Excerpts(2 years, 7 months ago)
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Jonathan Reynolds
Again, I think the case my hon. Friend has made is self-evident. I would also say that if we look at the moments of national crisis in British history and at how the country has responded to those, we see that we have always sought to learn from those crises and to take the best bits of our response to them. This announcement from the Government—the debate today—is their saying, “There’s nothing to take from this; there is nothing to keep that sense of solidarity or that action to try to improve things for people, and we are walking away from it.” I think that that, perhaps more than anything else, is what makes so many people frustrated with the tin ear the Government are showing.
Jack Dromey (Birmingham, Erdington) (Lab)
Erdington may be rich in talent, but it is one of the poorest constituencies in the country. Some 63% of working age families with children in my constituency face a £1,040 cut in the biggest overnight cut to social security in the history of the welfare state. Does my hon. Friend agree with me that the Government seem to be oblivious to the despair of mums and dads who are wondering how they are going to be able to feed their kids as a consequence of soaring bills—electricity, gas—and prices in supermarkets, and that at a time like this this cut is truly the cruellest cut of all?
Oral Answers to Questions
Jack Dromey Excerpts(3 years, 6 months ago)
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Guy Opperman
I agree with my hon. Friend. The Government are setting a regulatory framework and enabling pension funds to make sustainable investments happen, whether that is through the Bill itself or through our illiquid investments proposals, which will see renewables, hydrogen and potentially new nuclear. We do not believe in divestment, but we welcome the change in investment practice that is already beginning to take place, although we want to see more.
Jack Dromey (Birmingham, Erdington) (Lab) [V]
With David Attenborough urging pension funds to move away from fossil fuels, it is hugely welcome that the Government have joined Labour to incorporate in legislation, for the first time ever, climate change commitments on pension funds. Now we must translate our ambitions into action. Previously, the Minister has received positively our proposal for a pension fund summit. Will he now agree to work with us—across party and bringing together the world of pensions to save our planet—to organise a cross-party climate change summit, because this is the biggest form of investment potentially worldwide in climate change pension funds?
Guy Opperman
As the hon. Gentleman knows, we are already working with a large number of pension funds and also with companies. We all want to see a safer, better and greener pension system. I am happy to work with him on an ongoing basis, and I am happy to reach out on a collaborative basis on this particular issue, which matters to all of us.
Pension Schemes Bill [Lords]
Jack Dromey ExcerptsWednesday 7th October 2020
(3 years, 6 months ago)
Commons ChamberRead Full debate Pension Schemes Act 2021 View all Pension Schemes Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 104-I Marshalled list for Report - (25 Jun 2020)
Jack Dromey (Birmingham, Erdington) (Lab)
Those who built Britain deserve nothing less than security and dignity in retirement. Pensions is not an easy policy area. It requires, on the one hand, careful long-term planning and management of the public finances and, on the other, the role that we play in this House in laying down the statutory framework for pensions. That is why, in government, Labour sought to establish consensus.
We introduced the Pensions Commission, which charted a new direction for United Kingdom pensions policy. Chaired by Adair Turner, it gained widespread agreement to reforms that, even at the time of the establishment of the commission, had been regarded as unthinkable. The lasting legacy of that was auto-enrolment, transforming the lives of millions, with 10 million more people now saving into a workplace pension.
I now turn to the Bill, with that spirit of constructive engagement in mind, and with a number of questions arising out of today’s debate. I begin by thanking the Pensions Minister for his outstanding work in carrying forward so much of the Bill. He is highly regarded across the House, as we heard from the right hon. Member for South Northamptonshire (Andrea Leadsom) and others.
In an unprecedented period, I am grateful to the Minister that, because of his persistence and engagement with us, because of the effective cross-party working there has been and because of the determination of those who have supported important measures in the Bill, it has finally now made it to this stage. I add just one other point: it is greatly to the credit of the hon. Gentleman that, in the most difficult of circumstances, that he has forged forward. I simply say, on this side of the House, we stand in solidarity with him and his wife.
As my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) and the Minister have said, the Bill, as first introduced in the House of Lords, focused on three key areas: first, CDC schemes; secondly, the role of the Pensions Regulator; and thirdly, the pensions dashboard. Part 5 also included provisions on DB scheme funding and transfer rights. Now the Bill contains one further key area, and the hon. Member for North Norfolk (Duncan Baker) was right when he said that it is the first time that such a measure has appeared in pensions legislation. From the outset, it was our strong view that the Bill offered an opportunity to make progress on the role of pension schemes in combating climate change. Originally, there was not a single reference to climate change or to environmental concerns in the Bill. Now, there is a set of provisions in clause 124, headed “Climate change risk”, which require those managing pension funds to take climate targets into account in their overall governance and to disclose climate change risks and opportunities.
I pay tribute to the hard work of our colleagues in the House of Lords and those who supported them on a cross-party basis for putting climate commitments for pension funds into UK legislation for the first time ever. That is a tremendous achievement of which those who successfully argued for such provisions, including Baroness Sherlock, Lord McKenzie and Baroness Drake, should be proud. I thank not only those in the Lords for their level of support, but the range of organisations outwith Parliament, including ShareAction, the TUC, and commercial companies such as Aviva, for some of the necessary measures that we now see in the Bill.
I have one further point on climate change. In exchanges on the Floor of the House earlier this year, the Pensions Minister agreed that, at the appropriate stage, we should hold a climate change pensions summit. I hope today that he will reaffirm that commitment, not least because of this excellent debate and the excellent contributions from the hon. Member for Grantham and Stamford (Gareth Davies), my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) and others who said that, during this great historic challenge of climate change, we are seeing not only the immense potential of investment by pension funds, but the extent to which that will greatly benefit pension schemes. Such a summit would be very welcome indeed.
On CDC schemes, I welcome the work that has been done by the Communication Workers Union and its deputy general secretary, Terry Pullinger, and by those in Royal Mail to bring us to this point. I am talking about a ground-breaking pension scheme forging a new and exciting pathway to a better pension for around 130,000 Royal Mail employees. This represents a truly revolutionary milestone for the UK pensions landscape. We support the provisions in the Bill that finally set up a framework for that to happen. If one looks internationally, at the experience of the Dutch, for example, we are talking about pension outcomes that are over and above—that are 20% and 30% better than—the traditional falling back on DC savings pots for those who are members of the scheme. It is important to be clear that we will always defend good defined benefit schemes and the provisions in this Bill must not undermine existing schemes. I would welcome the Minister’s committing himself to that.
Turning to the role of the Pensions Regulator, we support the strengthening of the existing sanctions regime by introducing new criminal offences and higher penalties for wrongdoing. The pensions landscape has been troubled in recent years by scandals, including those involving BHS and Carillion, to name just a few. Beyond the newspaper headlines, the mismanagement of pension funds was catastrophic for the scheme members involved. It is right that those who intentionally or knowingly mishandle pension schemes, or endanger workers’ pensions, should face severe penalties. That is why we wholeheartedly support the relevant provisions in the Bill, which I have termed “the Philip Green” clauses.
Crucially, we need to go further and to ensure that, on this issue of scams, decisive action must be taken at the next stage. My right hon. Friend the Member for East Ham (Stephen Timms) and the hon. Member for Amber Valley (Nigel Mills) rightly said that more needs to be done. My hon. Friend the Member for Blaenau Gwent (Nick Smith) told a harrowing story about the terrible consequences of workers who fall victim to pension scams. I always remember the terrible story, from when the Financial Guidance and Claims Act 2018 went through the House, of the Port Talbot shift worker who burst into tears when he met the Pensions Advisory Service, because he had been seduced into transferring out of his good historic scheme into a far inferior scheme. He was in tears because he had seen all those he supervised on his shift follow his example and all lose out as a consequence.
There are sharks out there, and pensioners and future pensioners need to be protected against them, which is why I welcome the strong commitment to debate in the next stages. Crucially, we hope we will arrive at a framework such that if an innocent individual is being seduced into making the wrong decision, alarm bells ring and it does not go ahead—the red flags have been described in this debate.
The pensions dashboard is an innovation that we support. There were some interesting contributions in what was an excellent debate—for example, from the hon. Member for Grantham and Stamford on the nature of pensions in modern Britain. The dashboard is truly a step in the right direction. We have always supported the concept of allowing people to access information about their pension savings more easily. We also support the idea—mentioned in contributions by the hon. Members for Amber Valley, for West Worcestershire (Harriett Baldwin) and for Newcastle-under-Lyme (Aaron Bell)—that individual citizens should be able to access information, including through the dashboard, on costs and charges.
Where we appear to differ from the Government is in our strong view that the dashboard should be run firmly in the interests of the public. It should be publicly owned, free at the point of use and available to all. We have agreed to disagree on that—the path down which the Government are going is that there will be a public dashboard and commercial dashboards—but Labour secured amendments in the other place to guarantee a one-year head start for a publicly owned dashboard before commercial rivals are allowed to enter the market, and to prevent commercial transactions on dashboards without primary legislation. Given the scams and scandals that have blighted the pensions world, the dashboard should not become another tool by which savers can be targeted by commercial initiatives that may harm their savings. I am concerned by soundings from the Government suggesting they will go back on these positive amendments to the Bill, so I ask the Minister: will a public dashboard be first? What is the Government’s intention on ever allowing transactions on the dashboard at any point?
Let me turn to other areas of concern. There were powerful contributions from my hon. Friend the Member for Birmingham, Selly Oak and the hon. Members for Gordon (Richard Thomson) and for Airdrie and Shotts (Neil Gray) on the issue of open and closed schemes. As the Minister is aware, there are grave concerns about the impact of the Bill’s provisions on open DB schemes. Prior to my becoming a Member of Parliament, in my former role in the old Transport and General Workers Union and then Unite, I worked hard to defend good DB schemes, such as the local government pension scheme.
As I said earlier, I do not for one moment accept the premise that somehow DB schemes are history or are not worth protecting. DB schemes currently have 10.5 million members, with £1.5 trillion under management. Those assets can be invested in sustainable and long-term ways, such as in infrastructure projects and initiatives—including those with a positive approach to climate change—as well as generating the best possible return for the scheme members. They remain a crucial part of the pensions landscape, so it is a legitimate concern that the Bill does not adequately recognise the difference between DB schemes that are open to new members and those that are closed. The former includes many public sector schemes. By overlooking that distinction, the Bill risks imposing overly conservative—with a small c— measures on open DB schemes that may ultimately threaten their sustainability.
With that in mind, we supported in the other place clause 123, which is aimed at addressing the issue and protecting the 1.1 million ordinary members of schemes that are currently open to new members and the further 7.6 million people who are members of schemes still open to future accrual. The Minister has expressed some concerns over the wording of clause 123 but does not necessarily seem to agree with its intent. Is he willing to confirm that he is open to working with us, across party lines, on appropriate amendments for discussion in Committee?
Drawing my remarks to a conclusion, the Bill is welcome —of that there is no doubt—but there are issues it does not address. The continuing cause of grievance, absolutely understandably so, on the part of the Allied Steel and Wire steelworkers is a desperate one. Many worked for decades, paying 100% of their pensions only to find, many years later, that they may only receive half of what they are entitled to. That is despite the fact that their campaigning led to legal changes that protected the retirement funds of many other members of wound up schemes. They have been fighting for their full pensions for almost 20 years. Tragically, some have died before getting the retirement income that should have been theirs to begin with. The problem is a complex one; the injustice is clear. Is the Minister prepared to meet them to discuss potential solutions?
There is also the cause, which we have raised frequently in this House, of the WASPI women—the Women Against State Pension Inequality Campaign. It is unacceptable that the ’50s women continue to be victims of the injustice they have suffered. I warmly welcome the Prime Minister recognising that injustice. I hope that in the next stages the Department is prepared to engage with the women concerned on potential solutions, including exploring targeting help for those worst affected.
Ending on a similar note to my hon. Friend the Member for Stalybridge and Hyde, we want a pension system that is cost-effective and fair, and which guarantees working people dignity and security in retirement. In the excellent contributions made from across the House, I will single out auto-enrolment as an example of the importance of going further. I think it was the hon. Member for Amber Valley who spoke about that. The way I have often put it is that 8% cannot be the summit of our ambitions. Auto-enrolment is a huge and welcome step in the right direction, but we need to go further and faster if we are to fulfil the objective of security and dignity in retirement.
In Committee, the Opposition will push for measures we want to explore: widening auto-enrolment; better protection against pension scams, because of the urgency of a growing scandal; and ensuring that the dashboard is run in the public interest. We hope the Government will continue, as they have done thus far, to work with us and other Opposition parties to achieve wider and longer-term policies that will protect people’s pensions. I will end on the point I started with: there is a sacred duty on all of us here to always champion the cause of security and dignity in retirement. The people of Britain deserve nothing less.
Oral Answers to Questions
Jack Dromey Excerpts(3 years, 7 months ago)
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Guy Opperman
The hon. Gentleman knows that I cannot comment on live litigation, but he also knows that when the High Court heard the judicial review, it found for the Government on all the issues that he outlines. I point out that sections 24, 26 and 28 of the Scotland Act 2016 give the Scottish National party Government in Holyrood extensive powers to intervene, if they choose to do so.
Jack Dromey (Birmingham, Erdington) (Lab) [V]
Up to 130,000 women who have been denied their pension entitlements through pension underpayments are awaiting justice. An investigation is under way; when will it finally conclude so that those women, many of whom are in their twilight years, get the justice that they deserve? To make a bad situation worse, the Government pledged in their manifesto that they would honour the triple lock; we now hear that they are considering scrapping the triple lock when UK pensioner poverty is the worst in Europe. Will the Secretary of State commit today that her party will not add to its long list of U-turns by scrapping the triple lock?
Guy Opperman
I really think the hon. Gentleman needs to talk to his good lady wife, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), because she was the Secretary of State for the Labour Government who so grievously underpaid state pensions such that the coalition Government and this Government have now transformed basic state pension so that it is more than £1,900 a year higher than it was a decade ago. That is thanks to the actions of the coalition Government and this Conservative Government. The House will be aware that the matters the hon. Gentleman raises in respect of category BL state pension were a result of the changes brought in by the regulations introduced under the Labour Government in 2008.
Work and Pensions
Jack Dromey Excerpts(3 years, 9 months ago)
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Guy Opperman
I note the hon. Gentleman’s comments, and we invite anyone who thinks that they have failed to claim a state pension increase that they are eligible for to contact the Department through the Pension Service helpline. Alternatively, Pension Wise can assist.
Jack Dromey (Birmingham, Erdington) (Lab) [V]
Case after case is being uncovered of retired women being underpaid on their pension. To this day, many do not know about the Department’s mistake, and some have tragically died before learning of it. This must be properly investigated. Crucially, those women deserve justice. When will the Department work out how many women have been affected, and who they are? Will it bring forward a plan to contact them so that the women who built Britain get the justice in retirement that they deserve?
Guy Opperman
As the hon. Gentleman is aware, this dates from March 2008, when married women receiving a low-level state pension based on their national insurance record should have had their entitlement reviewed when their husband reached state pension age. The Department for Work and Pensions is looking into the matter, and we invite any individual who feels that they are affected to claim a state pension increase by contacting the Pension Service helpline or Pension Wise.
[Official Report, 29 June 2020, Vol. 678, c. 15.]
Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman):
An error has been identified in the answers I gave to the hon. Members for Blaenau Gwent (Nick Smith) and for Birmingham, Erdington (Jack Dromey).
The correct answers should have been:
Oral Answers to Questions
Jack Dromey Excerpts(3 years, 10 months ago)
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Guy Opperman
I note the hon. Gentleman’s comments, and we invite anyone who thinks that they have failed to claim a state pension increase that they are eligible for to contact the Department through the Pension Service helpline. Alternatively, Pension Wise can assist.[Official Report, 8 July 2020, Vol. 678, c. 4MC.]
Jack Dromey (Birmingham, Erdington) (Lab) [V]
Case after case is being uncovered of retired women being underpaid on their pension. To this day, many do not know about the Department’s mistake, and some have tragically died before learning of it. This must be properly investigated. Crucially, those women deserve justice. When will the Department work out how many women have been affected, and who they are? Will it bring forward a plan to contact them so that the women who built Britain get the justice in retirement that they deserve?
Guy Opperman
As the hon. Gentleman is aware, this dates from March 2008, when married women receiving a low-level state pension based on their national insurance record should have had their entitlement reviewed when their husband reached state pension age. The Department for Work and Pensions is looking into the matter, and we invite any individual who feels that they are affected to claim a state pension increase by contacting the Pension Service helpline or Pension Wise.[Official Report, 8 July 2020, Vol. 678, c. 4MC.]
Pensions
Jack Dromey Excerpts(3 years, 11 months ago)
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Jack Dromey (Birmingham, Erdington) (Lab) [V]
Thank you, Mr Deputy Speaker.
Following on from what the Pensions Minister said, our country is gripped by the greatest crisis since 1945, and in the great battle to save jobs and livelihoods I too have nothing but praise for the DWP staff, who, together with key and essential workers throughout our country, have been utterly magnificent in rising to the challenge of protecting the public and the public interest. We will come through this, not least because in an hour of darkness what we saw was our staff, the very best of Britain, rising to the challenge, putting themselves on the line to support others, sometimes in desperate difficulty and occasionally putting themselves in harm’s way, to do the job they are determined to do. They deserve nothing but our warmest praise.
The Pensions Minister has heard me say before that auto-enrolment, introduced by the last Labour Government, was a landmark achievement. It is deeply welcome that there has been a continuity of policy, as a consequence of which 10.2 million people are now saving £90 billion a year via auto-enrolment. We are seeing extraordinary benefits: for example, 77% of people are now engaged in a workplace pension. It was a dream that we would ever make such progress in years gone by; it was a vision that we gave birth to and carried forward. I stress once again that I welcome the continuity of policy on the part of the Government.
There is undoubtedly room for improvement with auto-enrolment; 8% cannot be the summit of our ambition —the £10,000 threshold and the age of 22 threshold likewise. There are improvements that require to be made at the next stages, including tackling the deep-seated problems for the self-employed. Having said that, it is absolutely right that we celebrate the progress made thus far.
Turning to the statutory instruments, we must constantly broaden the scope of auto-enrolment to take in yet more workers on the one hand and ensure that nobody falls out on the other. To that end, these statutory instruments are necessary; otherwise, the interests of maritime workers and seafarers would be put at risk, and that cannot be right, not least because of the job that they do. The sunset clause that would otherwise have created real problems for continuity requires to be dealt with by way of these statutory instruments, and we are therefore pleased to endorse them and we will certainly not be voting against them.
Going forward to the next stages, in the spirit that the Pensions Minister referred to I say that we have monumental problems as a country and I am in no doubt whatsoever that there will be significant implications for pensions and future generations of pension earnings for years to come. But today these are necessary statutory instruments, which we are more than happy to support.
Mr Deputy Speaker (Mr Nigel Evans)
Order. There is a 10-minute limit on contributions and I hope contributors have timing devices so they do not go over that limit.
Oral Answers to Questions
Jack Dromey Excerpts(4 years, 1 month ago)
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Guy Opperman
We have the 2017 review, which we continue to monitor and will implement going forward. Automatic increases are not part of the Government’s present plans, but I am actively looking to learn from private sector companies that are carrying out similar initiatives. I welcome my hon. Friend’s interest and would be happy to discuss this in more detail.
Jack Dromey (Birmingham, Erdington) (Lab)
Auto-enrolment, the creation of the last Labour Government, has transformed the lives of millions, with 10 million more now saving into a workplace pension, but 5 million people are still not covered because they are too young, because they earn too little or because they are self-employed.
The hon. Member for West Worcestershire (Harriett Baldwin) is right that 8% cannot be the summit of our ambition to ensure security and dignity in retirement. Does the Minister agree that 8% cannot be right, and will he agree to cross-party talks on putting right that wrong?
Guy Opperman
As the hon. Gentleman knows, we frankly speak far too often—virtually on a weekly basis —to ensure a cross-party approach to pensions policy. He is right that automatic enrolment was conceived under a Labour Government, implemented under the coalition and brought forward by the Conservatives. I accept that 8% is not enough going forward, but we await the 2017 review, the implementation of that review and further discussions on an ongoing basis.
Oral Answers to Questions
Jack Dromey Excerpts(4 years, 3 months ago)
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Guy Opperman
It is a pleasure to welcome my hon. Friend to the House. She obviously knows that Ken Clarke was a legend to us all, and I am sure that she will be a great champion on behalf of the citizens of Rushcliffe.
Sadly, too few schemes are making any form of disclosure about their environmental investments and their climate risk, and I am determined to change that. Every private occupational pension holder should be able to know, individually, how their fund is invested and be able to hold the trustees and asset managers to account.
Jack Dromey (Birmingham, Erdington) (Lab)
With Australia burning, South sea islands drowning, millions suffering from pollution and many dying, the world faces an unprecedented climate crisis. The power of pension funds is immense and, while I welcome the funds that have demanded that investment managers must, in the words of the Minister, “do the right thing”, so much more can, and should, be done. Will he therefore agree to cross-party, Front-Bench discussions, including on convening a pensions summit of all those with power, urging them to discharge their responsibilities to clean up our world?
Guy Opperman
I have been fortunate to work with the hon. Gentleman on a number of policies over the two and a half years that we have both held this portfolio. Clearly, I will wait to see the details of his proposals, but I would be delighted, subject to having read and considered them properly, to meet him and, at the very least, discuss how we take these matters forward.
Dr Coffey
My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy leads on this issue. I assure my hon. Friend that we encourage people to take up the options and we support their efforts. We will continue to do more with our work coaches on helping people to get the most out of working.
Jack Dromey (Birmingham, Erdington) (Lab)
The Government have said that the aim of the Pension Schemes Bill is to support pension saving, putting the protection of people’s pensions at its heart. However, this weekend, we learned that the Financial Conduct Authority is preparing to write to just over three quarters of firms that advised individuals on pensions between 2015 and 2018 about “potential harm” in their defined benefit transfer advice. How can the Government claim to have a joined-up pension policy when pension freedoms can be exploited, giving licence to rogue financial advisers to put at risk people’s savings for retirement? Some have paid a terrible price, impoverishing them for years to come.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The hon. Gentleman will realise that FCA rules already require an individual to seek independent advice when making a DB transfer, but I urge the FCA both to crack down on transfer scammers and to ensure that the quality of advice is fit for purpose. I welcome the FCA’s action at this stage.