Pension Schemes Bill (Third sitting)

John Milne Excerpts

Committee stage
Thursday 4th September 2025 Public Bill Committees

[Torsten Bell]

That is a factually accurate description of the situation. The hon. Lady is not the first person to have raised that point with me, and I understand the wish for greater certainty about how funds will be used. My view is that looking for that certainty through legislation is wishful thinking. Funding sitting within companies is fungible. The monitoring and enforcement of those things would not be practical in any sense. I am sure that part of the discussion between trustees and firms will be about exactly the kind of points that the hon. Lady is raising, particularly for open schemes, where there is a large overlap between employees and scheme. Members will be part of the discussion, but I do not think that that is practical for legislation. I am liberal enough, although I am certainly not a Liberal Democrat, to think that that is quite hard for legislation to manage, and that it is the role of trustees and employers to work through that.

On the hon. Lady’s wider point, I offer her some reassurance that the Pensions Regulator is taking very seriously its job of providing guidance for trustees about how they think about the questions of surpluses. I think that will offer her quite a lot of reassurance, particularly about how members benefit—she has focused on how employers benefit—from release.

Amendment 25 agreed to.

Amendments made: 26, in clause 8, page 8, line 2, at end insert—

“(4A) Any power to distribute assets to the employer on a winding up is to be disregarded for the purposes of subsections (2) and (3); and a resolution under subsection (2) may not confer such a power.”.

This amendment ensures that the scope of section 36B is confined to powers to pay surplus otherwise than on the winding up of the scheme.

Amendment 27, in clause 8, page 8, line 6, at end insert—

“(5A) Regulations may provide that this section does not apply, or applies with prescribed modifications, in prescribed circumstances or to schemes of a prescribed description.”—(Torsten Bell.)

This amendment, which inserts provision corresponding to section 37(8), allows for the application of section 36B to be modified in particular cases (for example, in the case of sectionalised schemes).

Clause 8, as amended, ordered to stand part of the Bill.

Clause 9

Restrictions on exercise of power to pay surplus

[John Milne (Horsham) (LD)]

I beg to move amendment 5, in clause 9, page 8, line 18, at end insert—

“(2AA) Without prejudice to the generality of subsection (2A), regulations made under that subsection must include provision that takes into account the particular circumstances of occupational pension schemes established before the coming into force of the Pensions Act 1995 which, prior to that Act, possessed or were understood to possess a power to pay surplus to an employer.”.

This amendment would allow schemes where people are affected by pre-97 to offer discretionary indexation where funding allows, with appropriate regulatory oversight.

[The Chair]

With this it will be convenient to discuss amendment 6, in clause 9, page 8, line 23, at end insert—

“(aa) prohibiting the making of a payment until annual increases to payments in line with Consumer Prices Index inflation have been awarded to members,”.

This amendment requires that payments in line with CPI inflation are awarded to members before all other considerations.

[John Milne]

The purpose of amendment 5 is to ensure that regulations take account of the particular circumstances of occupational pension schemes that were established before the Pensions Act 1995. There is effective discrimination against certain pre-1997 pension holders. That is a long-standing grievance and has remained unresolved for far too long. This has been reflected considerably in my postbag, as I am sure it has been for pretty much every MP.

In the evidence session on Tuesday, we heard moving testimony from Roger Sainsbury of the Deprived Pensioners Association and Terry Monk of the Pensions Action Group. As they told us, many of those affected are, literally, dying without ever seeing satisfaction. Many of these pensioners are receiving a fraction of what they are entitled to and what somebody who paid the exact same sums is currently receiving. It is causing genuine hardship.

Members of the pre-’97 schemes are often in a different position to those in later schemes. These schemes were designed under a different legal and regulatory framework. Current legislation does not always reflect those historical realities, which creates unintended inequities.

The amendment would require regulations under clause 9 to explicitly consider these older schemes. It would allow such schemes, with appropriate regulatory oversight, to offer discretionary indexation where funding allows. The key impacts would be to provide flexibility while ensuring safeguards are in place, give trustees the ability to improve outcomes for members in a fair and responsible way, and help to address the long-standing issue of members who miss out on indexation simply because of the scheme’s pre-’97 status. It also ensures that members can share in scheme strength where resources permit.

Clearly, safeguards are needed, and the amendment makes it clear that discretionary increases would be possible only where schemes are well funded. Oversight by regulators ensures that employer interests and member protections remain balanced. The intention behind the amendment is to bring fairness and flexibility into the treatment of pre-’97 scheme members and to modernise the system so that it works for today’s savers without undermining scheme stability.

[Mark Garnier]

I will not take up too much of the Committee’s time, but suffice it to say that we all heard the evidence that was presented on Tuesday, and we in the Conservative party agree with the Liberal Democrats’ amendment. We will support it.

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[Torsten Bell]

I absolutely would. I have been making exactly those points to anyone who will listen.

[John Milne]

I thank the Minister for his comments. Over the coming weeks, as he will be aware, we will be discussing several amendments that relate to the same issue. It will be interesting to see whether we can reach a satisfactory solution. In the meantime, we will press our amendment to a vote, because we feel that the issue has remained unresolved for such a long time that it needs everything we can give it to get it across the line, but we hope that in the next couple of weeks of debate we can find the best possible solution.

Question put, That the amendment be made.

Pension Schemes Bill (Second sitting)

John Milne Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[John Milne (Horsham) (LD)]

Q Earlier, you were touching on possible investments in local matters, such as affordable housing, which have a strong and desirable social benefit. Could it not be argued that there are extra interests for a local investor? Basically a council could both own the houses and effectively supply the customers via its housing lists, so there is an extra reason for investment from a local government pension fund versus other investors. Alongside that, do you think the Government need to help create these investment vehicles so that there is a sufficient pipeline to invest in?

Councillor Phillips: The Government have a responsibility to support the strategic authorities in developing the pipeline and the vehicles for investment. Affordable housing is probably one of the best examples to use. The pensioner receiving a pension or paying into a pension from the local government sector would be quite proud of the fact that some of their pension money is being invested in providing homes for the next generation of key workers. That is probably one of the best examples you can ever get of local investment. There is real potential, but I go back to the fact that it has to provide the necessary returns. Just as you have to be careful about some of those controversial ones, there is one that you can absolutely lap up.

[John Milne]

Q But would you agree that that could have very stable returns—say a 5% return for affordable housing, or for a care home—because effectively the customers are also coming via the local authority?

Councillor Phillips: There is great potential in all the activities that local government can do, but the fiduciary duty is where we need that clearly spelt out and some guardrails put in for that.

Robert McInroy: Where the LGPS can potentially bring an advantage to bear is by tapping into its local connections and local expertise—when it can see local investment opportunities that others potentially cannot. To come back to affordable housing and the fiduciary duty, if you are the asset owner, you have to be looking at the returns, and that is a difficult challenge for LGPS funds, particularly when it is in their local areas. You are talking about, for example, whether you push up rent and potentially displace a family or basically taking a lower return as a result of that. It is a very difficult thing to stack up. It is new to the LGPS. We need to make sure there are guardrails around it. Within the Bill it would be useful to bring fiduciary responsibility into the elements of local investment and how that overrides any of the local considerations.

[David Pinto-Duschinsky (Hendon) (Lab)]

Q The Minister picked up a point that I was going to touch on, but I would like to ask about broader consolidation. Councillor Phillips, you mentioned that often councils are wrestling with multiple pools in a small area. I think there is broad consensus that consolidation is a good idea, and clearly this is the direction of travel being laid out by the Bill. What kind of challenges do you see to successful implementation of consolidation and how will the Bill drive that forward?

Councillor Phillips: Let us be quite clear. I think the Government’s frustration, which is shared by many of us, is that we are talking about what is generally accepted to be the sixth largest pension scheme in the world, and it does not punch its weight, which is what it needs to do. That is what pooling, which began in 2016, was meant to address, and to date, it has been successful, but it needs to be better. That is where I see a very big positive of coming together.

--- Later in debate ---

[Torsten Bell]

I was encouraging you to say that; you got there.

Helen Forrest Hall: Apologies; we are very, very supportive of the vast majority. This is basically the one substantive issue from our perspective. As Sophia has said, the value for money and consolidation elements in particular are incredibly helpful in removing some of the barriers that have existed, including for trustees. They technically have the ability to operate within their fiduciary duty, but sometimes the legislation and the structure of the industry get in their way. Things such as value for money and scale will really help with that. This Bill is incredibly enabling in the vast majority of its provisions. There are just a small number—mandation being one of them—where we have a bit of concern.

[John Milne]

Q Pension scheme funding ladders can go up, and they largely have done in recent years, but also they can go down. Do you think that the proposals and the framework in this Bill for surplus extraction have the right balance of risk versus actually achieving the objective?

Helen Forrest Hall: From a principles basis, yes, and just to address the funding point, they absolutely can. I know there will be a number of us in the room who have either experienced or been subject to the outcomes of what has happened when those significant events have taken place. In the context of where we are with DB now, a significant proportion of schemes are employing investment strategies that really do protect them against the kind of volatile market movements you might see.

The provisions in the Bill strike the right balance between, as I said earlier, giving trustees greater flexibility to exercise their fiduciary duty in discussion with employers, while also ensuring that they are considering the best interests of the members. One of the key considerations for trustees in that conversation is: how confident are we that our investment strategy would withstand significant market movements at the point when we might release a surplus? That is a key consideration.

We have seen that a number of pension schemes did not benefit from September 2022 in the way that others did, and that was because they had decided to protect themselves against that kind of market movement. There are things that schemes can deploy to give themselves that level of confidence.

Sophia Singleton: We were very pleased to see the stringent funding safeguards that are in the Bill in order to allow a surplus to be released. One thing I would say is that, as Helen says, it is giving the trustees the tools to properly exercise their discretionary power and, in a sense, fiduciary duty, but it has created an opportunity for trustees to negotiate and agree a win-win situation, in a sense. The conversations we are having with schemes is that they are now more likely to be able to feel comfortable in paying, and be able to pay out, discretionary benefits than they would have been before the Bill was in place. It gives schemes the opportunity to run on and for the employer to access the service, but also for members to have more access to discretionary benefits and to additional benefits.

--- Later in debate ---

[Kirsty Blackman]

Q In relation to investments and some of the stuff that was not invested in historically, if we are talking about renewable projects and affordable housing—things that, historically, pension funds have maybe not invested in—you said that investing in these projects is a problem for smaller companies until they build up that level of scale. Are there other barriers? Are there legislative barriers, or other barriers—maybe finding schemes to invest in—that you or other companies could do with additional help in overcoming?

Ian Cornelius: Having a strong pipeline of investable assets is key. There is no doubt about that. Patrick touched on this earlier: one other inhibitor has been cost. It is actually quite expensive to invest in private assets. One of the things that NEST does successfully is to drive that cost down, but that is a barrier. The focus on cost rather than value in the past made it harder. The Bill shifts the focus towards value, which will be really helpful. There are a number of challenges that the bigger you are, the easier it is to work through. The Bill as a whole will therefore definitely be helpful, but collaboration with Government and across industry should help to unlock more of those attractive private market opportunities.

Patrick Heath-Lay: I have previously discussed this with the Minister. There is a role for Government to play here. It was even acknowledged within the Mansion House accord that this is for the benefit of savers, and there is a role for all of us to play in finding those efficient routes to deploy that investment through. The problem right now is not whether there is investment to come; there is. The Mansion House accord has created that. There is a wall of capital potentially available. The issue is connecting it in the right way with the investable opportunities—not only the planning and whatever is needed to create those investment opportunities in the first place, but the routes of access and the investment vehicles used. There are further conversations to be had about how we can do that as an industry. Efficient deployment is probably the biggest challenge for us as an asset owner in ensuring that we are sharing that benefit back with members.

[John Milne]

Q Auto-enrolment is a great success story. It has certainly got lots more people investing in a pension than would have done otherwise. However, the fact remains that large numbers of them are nowhere near on course to have a reasonable pension in retirement. Small pot consolidation helps, but we have to admit that it is going to be a modest contribution to solving that problem. Do you think we are missing a trick in the Bill? Is there something else that could or should be there to help—or is that a job for another day?

Ian Cornelius: That is where we welcome the Pensions Commission. It has been set up to actively look at adequacy: what is right, and are people saving enough? There is no doubt that many people are not saving enough and there are a lot of people who are still excluded from retirement savings. There is a big issue and challenge with the self-employed. There is a challenge for the industry and the Government to work on, but the Pensions Commission creates the right environment to do that. Auto-enrolment has been a big success, but it is only a job half done. Completing that job through the Pensions Commission is incumbent upon the Government and industry.

[John Milne]

Q Is there anything you think should or could be in this Bill that would help?

Patrick Heath-Lay: I completely agree with what Ian just said. The review is the right way, and we need to look at the interaction between saving rates, state pension and the general economic conditions. One thing that we were concerned about with the Bill is this. There is a lot in here that is trying to create better value in the industry as a result of the transformation, but what we have very much seen over the last few years is the rise of retail consolidators, which encourage people to consolidate their lost pensions towards them and effectively put their pensions on their phone. They have taken control of that future. That is a positive thing in terms of people acting and doing something about the number of small pots they have. The issue is that the Bill ignores the rise of that market.

From our own research, we know people are consistently moving their pensions to these types of vehicles, which are much more expensive and, for an average earner, effectively mean that they will retire three or four years later than they could have done, because the value delivered through those models is not going to be anywhere near the level of the competitive workplace market as it operates today. We would like to see the extension of value for money and those types of issues into that market as soon as possible, as there are some bad outcomes where well-meaning people are trying to do the right things and do not understand the consequences of what they are doing. There is not sufficient obligation on providers in that market to make those people aware of the consequences of their actions.

Ian Cornelius: I wholly welcome the Bill. It will increase and improve standards across the workplace pensions market—but only across the workplace pensions market. The pensions landscape is already pretty complicated with contract-based schemes, trust-based schemes and personal pensions. Consumers do not understand the differences between those—and why should they? The fact that the changes only apply to workplace schemes, and that things such as value for money do not apply across personal pensions, is an issue for consumers. They will be confused and will not necessarily make the right decisions. We need to think about how the landscape can be equalised and made as simple and clear as possible for consumers.

[The Chair]

Thank you very much. That completes the questions from Members. I thank the witnesses for their attendance and evidence this afternoon.

Examination of Witness

Tim Fassam gave evidence.

--- Later in debate ---

[Mr Bedford]

Q I am just interested in examples of recent shocks that have happened, where you had to pay out significant sums and what those sums were.

Michelle Ostermann: The biggest example is a macroeconomic shock that would affect the solvency of corporations. The failure of the corporation itself is more likely to have an impact than just a change in interest rates or equity markets. The change in interest rates can affect the fundedness of a scheme, but many of those schemes, over 75% of them now, are actually really well funded. And they have pretty well locked down their interest rate risk because they have put a good chunk of assets against their liabilities in a fairly tight hedge. Although we saw, as a result of the liquidity crisis a few years ago now, that things can change. The degree of risk, specifically leverage risk inside some of those strategies, does make them fallible. I would say the biggest shocks would be massive interest rate movements that are unforeseen, a very significant macroeconomic environment causing failure in many corporations, and technically, even a significant move in equity markets, but we would usually just ride that out. Markets can go down 20% or 30%. We would only go down 10% or 15% and we would be able to recover that in under five years, historically speaking.

[John Milne]

Q It has been a long-standing battle over pre-1997 compensation rights. Would you agree that this Bill is perhaps an opportunity to at last address that issue, perhaps by a judicious amendment or two? Do you think that that is feasible, and what framework might that take?

Michelle Ostermann: We have been progressing on this quite a bit lately. It is one of the most prevalent discussions, both with our board and with our members. We speak very often with the entirety of the industry. Several are very strong advocates for it as well, a few of which are here today, and we have taken quite a bit of humble feedback. We have worked as best we can with the Work and Pensions Committee to estimate a significantly complex set of potential scenarios for making good on historical indexation needs for pre-’97. They range in price, are quite expensive and would require us to incur or crystallise a liability. They are not cheap. It would be difficult for both us and the Government to be able to afford. The taxpayer would have an implication to some of these, depending on how they are formed, and it is beyond our prerogative to make that decision but we have been facilitating and encouraging it to be made. We would welcome progress on that. I understand, in fact, an amendment was tabled earlier today in that regard, so I was warmed by that.

[John Milne]

Q The DWP argues that the funds are on the public balance sheet and therefore they object to using them for this purpose. Do you think that is fair, given that the funds were not acquired by the taxpayer?

Michelle Ostermann: To clarify the word “using”, as I think it is important, the PPF is an arm’s length body and those assets are ringfenced. Our board has independence over those. It was set up that way—arm’s length—20 years ago to make sure that it was a dedicated protection fund for that industry. It so happens that we do fall under some of the fiscal measures, so both our assets and liabilities do show. However, there is a bit of a conflict there in that we manage them in the prudent, almost in a trusteed fashion, on behalf of our members and all of our stakeholders. But the use of them would have to be prescribed by the board, legislated, and then approved by the board for its affordability, so as to not put at risk the rest of the industry that we are backstopping.

The ability for us to be able to afford that and the risk to the organisation is the primary, most sacrosanct thing that our board does. We have very complicated actuarial models to figure out the affordability of all the risks that we take on in the entire industry. That is why we have gone through quite a bit of work to build, just recently, a much more sophisticated model to estimate both the asset and liability implication to us and have even started to form a plan for how we might implement it. So we stand at the ready, but it is beyond our responsibility to be able to legislate the necessary change for it.

[Rebecca Smith (South West Devon) (Con)]

Q Given the international experience that both of you have in this realm, I am interested to know whether there is either anything in the Bill that you think is a red flag or anything that you think is a missed opportunity and not in the legislation in front of us today.

Michelle Ostermann: That is fascinating. I came to the UK, and back to the UK, because I have so much enthusiasm for the UK and the pension system. I am very fortunate to be the chair of the global pension industry association, so I study pension systems around the world and am quite familiar with many of them. The UK pension system is the second largest in the world by size if you include underfunded pensions. It is one of the most sophisticated, but it is the second most disaggregated. As I think a few of my peers mentioned before we got up here, it has fallen behind, frankly. I think the motives that are in this Bill are exceptionally important—they are foundational. I love that we are speaking on scale and sophistication. These are absolutely key, in both DB and DC. I want to underscore that; it is really key.

One thing that is not spoken of quite as much is the concept of an asset owner and the importance of governance. In relation to the successful countries that I have seen, which have mastered the art of pensions and the ability to translate pensions into growth, it is not a proven model, but there is a best practice such that countries are able to make growth by leveraging pension systems. I think that right now we are trying to solve a problem of two things: reshaping the pension system and trying to solve the need for a growth initiative. They are one thing in my mind; they really are one thing. It is not a surprise that as we have de-risked the pension system over two decades, it has, I suspect, quite directly, but at least indirectly, affected overall economic growth.

Making members wealthier pensioners in general and less dependent on social services is what many countries are trying to do and use their pension systems for. I see that out of the commission that is being started, so I am most excited about the next phase. I think there is a lot of potential, and we at the PPF are doing quite a bit of research and want to be able to feed some global ideas into that.

Morten Nilsson: I come from Denmark originally and I think, to echo some of what Michelle said, scale just matters in pensions. The Danish pension industry has been fortunate to have few and relatively large schemes. One of the things I saw when I came over to the UK 15 years ago was that the industry here is very fragmented, and that fragmentation means also that there are so many conflicts of interest in the market. That in a way makes it quite hard to get the best outcomes, and that of course leads into the governance models that Michelle talks about. So this Bill is something we very much welcome across what it is covering. I think it is a really good initiative, but I think scale matters, and governance really matters. I would not underestimate how big a change it is, in the defined benefit sector, that we are moving from two decades of worrying about deficit into suddenly worrying about surpluses and having very mature schemes, which is the other thing that is important. Most of the DB schemes are closed.

If I talk about the BT pension scheme, the average age is 71, so they are pretty old members and that means there is a risk level, from an investment perspective, that really matters. We are paying out £2.8 billion a year in member benefits. That means liquidity is really important. It is really important that we have the money to pay the members and that we do not end up being a distressed seller of assets.

So there is quite a lot in that evolution we are on, and when we go into surplus management or excess funds—Michelle was talking about this at macro level; we would be managing at our micro level in each scheme— I think it becomes really critical that we have the right governance to manage what is a new era. I would really recommend that the Pensions Regulator issue guidance as soon as possible on all this, because it will be quite uncomfortable for a lot of trustees. It will be quite difficult also for the advisers in how we manage this new era.

--- Later in debate ---

[Torsten Bell]

Q We all have work to do; it is never all over. Chris, this question is mainly for you, as I am conscious that you have done lots of work over an extended period on the dashboard. Obviously, there are elements of the Bill that relate to that—mainly relating to the PPF—but not many. However, is there anything you want to tell the Committee about the lessons from it for when we come to the small pots work, which obviously is a central part of the Bill?

Chris Curry: I listened with interest to some of the earlier witnesses talk about dashboards, and there certainly are some lessons that we can learn from the pensions dashboards programme, as it has been evolving over the past few years, for small pots in particular.

There are two issues that I would pull out. The first is on the technology front. I think someone suggested that the next five years or so could be quite a tight timetable to build a technological solution and get it in place. You have to be very careful—you cannot underestimate just how much complexity there is and how long it takes to do these things—but I would say that the work that we have done on pensions dashboards is giving us a bit of a head start. That is not to say that we necessarily need to build on or use parts of the system that we have already built, but it has helped us understand a lot about, for example, how you can find pensions—the way you can use integrated service providers rather than having to go direct to all the schemes, and use a syndicated model to find where people might have their pensions.

It has helped the industry get a long way down the path to where it needs to be, as well. One of the big challenges for pensions dashboards is the quality of data. Enabling individuals to find their pensions means data quality: it needs not only to exist and be there; it needs to be accurate and it needs to be up to date. When you are thinking about an automatic consolidator or default consolidator for small pots, that is even more important. You are not just transferring information, but transferring money, so it is really important that the data is high quality. The work that is being done on pensions dashboards will get people in the industry a long way to having part of that in place as well.

There are definitely lessons that can be learned from how we progressed on the pensions dashboards programme. It has got us much closer to where we would be if we had had a completely blank page to start from, but there is still a reasonable amount of work to do, because it is working in a slightly different way.

[John Milne]

Q The Bill makes the notion of using pension money for macroeconomic benefit—investment in the UK—an explicit objective. Other countries seem to have done this already. Did they do so explicitly and deliberately, or was it just an accidental outcome of good investment decisions? Did it take a conscious effort to make it happen?

William Wright: I think it is a mix of both. It very much depends on what sort of assets we are talking about. For example, if we are thinking about the UK stock market or domestic equity markets, we tend to see that markets such as Canada and the Netherlands have an even lower allocation to domestic equities, whichever way you look at it, than comparable UK pensions have to the UK market.

Ultimately, this comes down to what you might call the accidental design of the UK system. It has evolved over 20, 30 or 40 years, whereas the systems with which we like to compare the UK system, or large parts of them, were actively designed anything from 30 or 40 to 50 or 60 years ago. We are now seeing the benefits of that active design in those systems. Their focus on scale enables them to invest in a far broader range of assets at a lower unit cost.

Going back to the value for money point, UK pensions have ended up in the worst of both worlds. Fee pressure, particularly in terms of winning and transferring new business between providers, is driving down fees, but the average fees on DC pensions today are very middle of the pack: 45 to 50 basis points a year. That is much higher than much larger schemes in Canada, such as the Canada Pension Plan Investment Board, the big Canadian reserve fund, and much higher than large UK schemes, such as the universities superannuation scheme, but they are stuck in the middle: they are actually paying higher fees, but because of the fee pressure they have a very vanilla, almost simple asset allocation. As Tim Fassam from Phoenix pointed out, that tends to steer people towards the lowest cost investment option. Active design, focusing on scale and sophistication, enables pension schemes to take a much longer term and much broader view of what they should invest in and where they should invest in it, whereas in the UK we have tended to accidentally move from one system to another.

[John Milne]

Q So to summarise, you approve of the attempt to take control, as it were.

William Wright: Absolutely. One of the huge challenges in the UK pensions debate over the past 25 or 30 years has been that we sort of knew what was not working and where corporate DB pensions were going to go, and then there was a hiatus and no real active design of what was going to replace them. Auto-enrolment did not start to kick in for a couple of decades, and now we are beginning to see the benefits of that, but the opportunity to actively redesign the structure of the defined-contribution pensions system in this country, and the structure of public sector DB, is long overdue.

[The Chair]

If there are no further questions, I thank the witnesses very much for their evidence this afternoon. Given that the Committee has been sitting for a couple of hours non-stop, I will suspend the sitting for a brief period.

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[Sarah Edwards]

I was contacted by my constituents, so thank you for that.

[John Milne]

I think you have answered all my questions already. We have tabled an amendment, and I would really appreciate your input on whether we could improve it or argue around it between now and when it is raised in Committee.

Roger Sainsbury: Thank you.

[Rachel Blake]

Q Thank you very much for your evidence and your considered responses. There has been a discussion about the £12 billion surplus. Have you done any research on what you estimate would be the extent of the cost of RIPA—the scheme that you have promoted?

Roger Sainsbury: That is a very timely question, because for the past couple of years, we have been working on the basis that the RIPA scheme would cost £5.5 billion. That was the estimate given to us by the PPF. Now—I might almost say hallelujah!—about three days ago, the PPF notified us that they had redone the calculation using a much superior methodology. I think it is a phenomenally difficult calculation to do, but they have redone it, and the answer now is not £5.5 billion, but £3.9 billion, or possibly a bit less. Whereas for two years we have been arguing that £5.5 billion is eminently affordable, £3.5 billion, for example, is obviously even more affordable. We do not get that much good news, but that was definitely a bit of good news we recently received. I am pleased to be able to share it with you, if you did not know it.

Pension Schemes Bill (First sitting)

John Milne Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[Sarah Edwards]

Q I am interested in hearing a little more about unlocking surplus and some of the challenges, particularly in the way that it is described or calculated, and what the thresholds might be. Obviously, there is an opportunity, but there is also a balance around conflicts arising when an employer might wish to access the surplus. Perhaps you could comment on your understanding and interpretation of how the Bill deals with that issue.

Rob Yuille: The challenge is aligning it with scheme members’ interests so that they are not put at risk. If a surplus turns to a deficit, which it can do because it is by no means guaranteed, and if an employer then fails, there is actual detriment to those scheme members. As we know, economic conditions can change. It is an opportunity for employers, though—that is the purpose of it—and schemes can and do extract surplus now, often when they enter a buy-out with an insurer.

It does need guardrails, and the Bill includes the provision that it has to be signed off by an actuary and it is the trustees’ decision. That is important, but there is a related challenge about the interaction of the surplus and superfunds. Each of those is okay: you can extract a surplus, for the reasons that we have discussed, and you can go into a superfund if you cannot afford a buy-out. The problem is, if a scheme could afford buy-out, extracts a surplus and then no longer can, and then it enters a superfund, the scheme members are in a weaker position than they would otherwise be. There are a couple of things that could be done about that: either leave the threshold for extracting surplus where it is—which is buy-out level, rather than low dependency—or change the Bill so that the combination of surplus and superfund cannot be gamed to get around that. In any case, as you say, it is important to monitor the market, and for the regulators to be alive to potential conflicts of interest.

Zoe Alexander: Pensions UK is content with the idea of using the low dependency threshold for surplus release. We think the protections are sufficient. Providing that the actuarial certification is in place, the sponsoring employer is in a strong financial position and a strong employer covenant is in place, we think there are real benefits to be had from surplus release. We highlight the fact that some employers and trustees will be looking to move benefits from DB to DC using surplus release, or even to a collective defined-contribution scheme. We are interested in the potential of that to bolster the benefits of those types of scheme, and we would like Government to look at the 25% tax penalty that applies when doing that, because if those funds are kept within the pensions system, that is to the benefit of savers, so perhaps that tax charge need not apply.

[John Milne (Horsham) (LD)]

Q Do you think that the proposed value for money framework could have the unintended effect of causing excess caution or short-termism in investment decisions? If so, what mitigations would you suggest?

Zoe Alexander: There will of course be metrics in the value for money framework that look at the longer term, and looking at longer time horizons is really welcome. One concern at Pensions UK is about the intermediate rankings in the value for money framework meaning that schemes cannot accept new business. That may well result in schemes doing everything they can, at any cost, to ensure they do not drop from the top rating to the intermediate rating. That could cause damaging behaviours in terms of herding. We want to ensure that people in the intermediate ranking, whether that is within a couple of intermediate rankings—perhaps you have a top one and then a bottom one, but somewhere within that intermediate scale—you can continue to take on new business, and the regulator will perhaps put you on a time limit to get back into the green, back into the excellent rating. We think that if it is so binary that as soon as you drop into intermediate, you cannot take on new business, that will heighten the potential downside risks of investment behaviours that you are describing.

Rob Yuille: I agree with that. I strongly support the value for money framework—I think both our organisations do—and the intent to shift the culture away from just focusing on cost and to value for money more generally, but yes, there is that risk. There are multiple trade-offs here: it is about transparency and how much you disclose, versus unintended consequences of that. We want high performers but, for high performance, you need to take risks.

As well as what Zoe says, which we might build on, we do not want a one-year metric. One year is too short a period; pensions are a long-term business. There should be a forward-looking metric, so that firms can say how they expect to perform over the longer term and then regulators and the market can scrutinise it.

On the points that were raised about intermediate ratings, this is another area where there is a potential combination of two bits of the Bill. There is provision for multiple intermediate ratings. It was originally conceived as a traffic light system, so there would be three ratings. If there were four, it would be okay to say to schemes, “You are not performing; you need to close to new employers,” but if there are three, firms will do everything they can to play it safe and make sure they get the green. So the interaction of those is really important.

[John Grady (Glasgow East) (Lab)]

Q This question is for Ms Alexander. A lot of my constituents are driven mad by small pots; they have worked in different jobs and have no idea how much money they have saved for a pension, so please could you outline the benefits of the small pots reforms to people in my constituency, and the practical steps needed to make the small pots regime work—for example, by way of IT?

Zoe Alexander: The small pots reforms are absolutely critical. The problem of small pots was foreseen by the Pensions Commission years ago. We all knew we would face that problem with automatic enrolment, and I think people would agree that it has taken too long to grasp the nettle. We at Pensions UK are really delighted to see the measures in the Bill to deliver the multi-consolidator model. It is really important that the pot size is kept low, as is proposed in the Bill, at least initially, to solve the problem of the smallest pots in the market. Pensions UK has undertaken a feasibility study, working with Government, to look at how that small pots system might be delivered in practice. That work is publicly available. It gets quite technical quite quickly, so I will not go into the details of it, but we believe there is a feasible model of delivering the small pots solution at low cost—one that should not involve Government in a major IT build.

--- Later in debate ---

[Torsten Bell]

The question to the witness is to expand a bit more on that point. In reality, this provides a “comply or explain” power. In terms of the point Charlotte was just making there, it is absolutely right about the ability of the trustees to say, “This is not in the interest of our members.” It might be worth talking a bit about how when we move forward the consultation will allow us to set out how that would work in practice.

Charlotte Clark: It is an area that we would need to work through in terms of the road map. At the moment, our focus is very much on getting the value for money framework right. How the mandation would work and the process around it—as the Minister says, first, we would consult on it. We would have to have a look to see what information was given and how we would monitor it in the period from now to 2030 or 2035. We would have to work through all of those aspects of the process. We would do that in conjunction with the industry, making sure that what we were asking for was information that it could readily provide and that we felt confident that we could make a good assessment around.

Patrick Coyne: Our engagement with the marketplace so far already shows that many are considering investment strategies that have significant proportions of diversified investments, so the market is already responding based on some of the Mansion House accord commitments.

[John Milne]

Q Do you think that the finance industry has a clear understanding of how to apply its fiduciary duty? Do you think the Bill makes that clearer or muddies the waters, or somewhere in between?

Patrick Coyne: I think that fiduciary duty is a powerful force for good. Across the Bill, this is about giving those trustees the tools for the job. I think there are a number of areas where that is true. Within the value for money framework, at the moment, it is very difficult for employers or schemes to effectively compare performance. As an anecdote, I was speaking to a provider recently. They were pitching for new business. They came in and pitched their investment data, and the employer said, “You’re the third provider today that has shown us they are the top-performing provider.” That cannot be right.

Then, when you are looking across the Bill towards the DB space, because of the funding reality that many schemes are facing at the moment, there is choice in end game options—so, “How do I enhance member outcomes at the same time as securing benefits?” Actually providing a statutory framework for super-funds as another option is a good first step, as is allowing the release of surplus, if it is in the members’ best interests to do so.

[Kirsty Blackman]

Q I have a question about the balance of decision making. Trustees are obviously required to steward and grow assets on behalf of scheme members. This Bill slightly changes the priorities in relation to value for money. There is potential for future mandation, in that it basically allows the Government, or the regulators, more say in what direction trustees are taking. In practice, it is relatively difficult for scheme members to influence decisions that trustees take. My reading of the Bill is that it does not increase scheme members’ power over the direction. For example, if they wanted to disinvest in something, or if they felt strongly about investing more in UK assets, they will not have any more power to do that. Am I correct in my reading of that? Do you feel that some scheme members feel that they should have more influence over what trustees do and the direction of travel?

Charlotte Clark: It is a good question. It is hard to get over the fact that the vast majority of people are very inert in the pension system. Of course, there are some who are not, specifically around ESG—environmental, social, and governance—investments, but most trustees take those things into account, and there has been clarification about how that aligns with things like the fiduciary duty. Obviously, within the contract-based scheme, there frequently are options, if somebody does not like something that is invested in within the default, to have their own investment strategy, if that is what they choose to do. Do I think this Bill changes that? I do not think so. I think what the Bill is essentially trying to do is use the power of scale and collectivism to get better returns and, really, a better service for most savers.

--- Later in debate ---

[David Pinto-Duschinsky (Hendon) (Lab)]

Q I want to build on the questions that the hon. Member for Mid Leicestershire and my hon. Friend the Member for Bristol North East were raising. Obviously, part of the challenge we face is around the proliferation of small pots; certainly, when I talk to my constituents about issues of long-term retirement planning, that is the consistent theme. The Bill obviously sets out a path to try to deal with some of that proliferation that has been caused since the introduction of auto-enrolment. What are your views on the extent to which the Bill provides the right framework for dealing with that kind of proliferation?

Jack Jones: As Zoe said earlier, we should be here already. It has taken us a long time to get to the point where we have an agreed solution. It looks as if the mechanics of it will work. I think we need to let that bed in and prove that it works. The main concern from our perspective is the £1,000 definition of a small pot. Obviously, from a lot of angles, £1,000 is a lot of money—but as a pension pot it really is not. Looking at this once you have proved the concept and you have a system that works and that hoovers up the smallest pots and those most likely to become orphaned is one thing, but I think if you are looking at helping people to avoid accumulating 10 medium-small pots over their career, we need to look at how to increase that over time.

Christopher Brooks: I agree with Jack. I think the Bill is really strong on small pots and the system that is envisaged will really help. I guess my only comment would be that £1,000 is not a huge amount of money, so maybe over time that amount could be raised, and some kind of indication that that is the intention might be helpful.

[John Milne]

Q Do you think there is evidence that fiduciary duties are not interpreted in a way that optimises outcomes for pensions savers? If so, would you support any change in legislation to help?

Christopher Brooks: Yes; I think a lot of schemes do not interpret it broadly, so they probably take things literally regarding financial materiality—that is obviously very important, but they could probably do more. I think there is a very strong case for reform in fiduciary duties, just to make it clear in the law what it actually means. It is more of an enabling tool for providers, I think, rather than anything restrictive. When there needs to be some direction for schemes to invest in particular ways, I think there is sometimes a bit of reticence. That is true of investing in the UK, maybe with some private finance and maybe with regards to climate change. The larger schemes no doubt do understand it, but all schemes need to understand that they can invest in these things and that that is possible.

I am no expert on this, but, as I understand it the fiduciary duty is all over the place in the law, and sort of hinges on bits of case law and bits of very old legislation, so clarifying that would be a really good move.

Jack Jones: I would agree with that. I think there could be statutory guidance to make it very clear to trustees what their fiduciary duty actually involves, and that it does go beyond that kind of narrow interpretation. As I say, you should take into account your members’ quality of life more generally—for example, investing in ways that support the UK, when that is where your members are, is something that is in their wider interests, and managing systemic risks such as climate change is obviously very material financially, but also has an impact on the kind of world they will be retiring into.

As I said before, we do hear fiduciary duty occasionally being used as a reason not to do the hard stuff and not to think through that. There is nothing inherently problematic there, but clarifying and making sure that trustees are fully aware of the breadth of fiduciary duty would be helpful.

[The Chair]

For the last question, I call Rachel Blake.

--- Later in debate ---

[John Milne]

Q From your perspective, what would be the main obstacles or difficulties in fulfilling the value for money requirement in the Bill?

Dale Critchley: From a practical perspective, producing all the data. We need clarity in the regulations and clear definitions, so that everyone is producing the same data in the same way so that it can be compared.

Setting practical considerations aside, one of the risks is that there is a disjoint between the market and value for money. Value for money is looking at value. We still see lots of evidence in the market in terms of looking at price—“We want the cheapest thing possible”—not necessarily the best value. There is a potential tension there.

Longer term, there is the risk we pointed out around herding: if you set benchmarks, that creates a behaviour which, instead of optimising outcomes for members, produces an average. An example of that is in the metrics around service that are currently being thought about. They are what I have described as 20th-century metrics. Rather than metrics that are looking to engage members to drive decisions through electronic engagement, they are measuring, “How long does it take to change someone’s address? Have you got their national insurance number?” We think we could stretch things further, but that creates some challenges for some providers.

Colin Clarke: One of the other things that the industry as a whole needs to consider is around capacity. The value for money framework, if it is managed and regulated effectively, is going to result, ultimately, in members being moved into things that have the potential to deliver better value. All those kinds of projects take a lot of work and a lot of resource, so it would need to be managed carefully to make sure that the industry has actually got the capacity to manage the high volume of traffic that is going to be going through as funds consolidate.

[The Chair]

Mr Bedford, we do have a little time if you wish to ask a question.

Universal Credit and Personal Independence Payment Bill

John Milne Excerpts

Committee of the whole House & 3rd reading
Wednesday 9th July 2025 Commons Chamber

[Graeme Downie]

As my hon. Friend will know, my amendment specifically mentions MS, and she and I have had shared friends who have suffered with that condition. We must ensure that there is a clear understanding of the reality of such conditions on the ground, so that when these provisions are delivered in reality by assessors, people are able to access the additional support that they need.

Welfare reform is undoubtedly needed after the mess of a system that we were left by the previous Government, but wherever possible we must ensure that the wording of the Bill is as clear as possible. We must ensure that those affected are in no doubt about what our intent is, so that that is indisputable and we truly give effect to the intentions behind the Bill. I again thank the Minister for his incredibly helpful intervention, but we will ensure that the reality reflects the Government’s excellent intentions.

[John Milne (Horsham) (LD)]

I rise to speak in support of amendment 36. Over the past weeks, I have met numerous disability organisations, from Parkinson’s UK to Action for ME, and heard directly from those living with complex fluctuating conditions. I have also seen the impact at first hand as an employer of people with long-term invisible disabilities. What I have heard, seen and lived is simple: the current proposals risk unacceptable consequences for those who are already among the most vulnerable. The Government’s redefinition of “severe conditions” hinges on the word “constantly”—a single word that is of dubious clinical value. I appreciate the clarification given to other Members, but it is very late in the day to be getting such important information.

Conditions such as ME/chronic fatigue syndrome, MS, epilepsy and bipolar disorder do not operate on a schedule. They are unpredictable and they fluctuate, yet the Bill would exclude many individuals who have them from vital support, simply because their symptoms do not comply with a Government definition. Amendment 36 would ensure that our assessment system respects the United Kingdom’s obligations under the UN convention on the rights of persons with disabilities. This affirms the principle of non-retrogression so that we do not roll back hard-won rights. It insists that we take invisible and episodic conditions seriously, and it protects people from falling through the cracks.

The Bill has had an extraordinary passage through Parliament, and at this point the most obvious course of action would be simply to pull it altogether and start again. I realise the political difficulties that that may involve, but vulnerable people’s lives are at stake. When the Government come to look again at some of the deleted clauses via the Timms review, it is essential to approach the issue from a “needs first” angle, not a “how much can I save?” angle, because so many Government cuts in the past have ended up costing more than they have saved.

I accept that the Government do not have infinite funds, but the PIP proposal represented an arbitrary change in eligibility—the four-point rule—with the crude objective of making a predetermined saving. It has all been the wrong way around: we should wait to understand needs first, and only then consider to what extent the Government can afford to meet them.

[Anna Dixon]

Does the hon. Gentleman recognise that the concessions that the Government have brought forward and the amendments that are before us today ensure that we are getting it the right way around? It is explicit in the terms of reference that the changes are about a fair and fit-for-the-future assessment, rather than to generate further savings, so does he agree that the Bill allows us to get the Timms review done and to bring forward proposals after that?

[John Milne]

I cannot agree with the hon. Member, and I will partly explain why in a moment.

We need a more honest assessment of the overall financial situation that is being used to justify these drastic cuts, because the wrong diagnosis leads to the wrong solutions. The dramatic rise in PIP claimants is at least partly driven by other Government policy; perhaps one quarter of the rise is simply due to raising the pension age. Large numbers of people who are older, and therefore more likely to be disabled, have been pushed out of pension support into benefit support. The state pension is paid out of current taxation, not past contributions, so the impact is immediate.

--- Later in debate ---

[Kirsty Blackman]

The hon. Gentleman mentioned the NHS and waiting lists. Does he share my concerns about the severe conditions criteria and the requirements for the diagnosis to be made by an NHS professional, in the course of NHS duty, when people may not have access to that? There is also a requirement for the condition to be considered “lifelong” by NHS professionals or health professionals, who may be unwilling to say that schizophrenia or bipolar disease, for example, are “lifelong” because they do not want to tie people down to that diagnosis.

[John Milne]

Yes, I agree that that is an additional concern.

The implication has been made, both by this Government and the previous one, that much of the rise in claims is down to benefit chasing and people simply exaggerating their conditions. This is an assumption that needs serious interrogation because it looks to be substantially untrue. For all these reasons and more, the best course of action would be to pull the Bill now and to make a fresh start. Denying adequate support today will only shift the burden tomorrow on to social care, the emergency services and our already overstretched NHS. We have been warned by the UN not once, but three times, that our welfare system is failing disabled people. Amendment 36 is a chance to show that we are listening.

[Neil Coyle]

I am concerned about some of the amendments before us today, in particular those that call for delays to legislation. We are one year into a five-year term—20% of this Parliament is gone—and the public need to see progress, not further delay.

I am mindful that Ministers have already done a huge amount of heavy lifting to rebuild trust with disabled people and disability organisations since the election. We should all recall that in July 2024, the Department for Work and Pensions was under formal investigation by the Equality and Human Rights Commission for unlawful treatment of disabled people. This Government have made considerable progress since then in trying to rebuild trust, including through measures in this Bill and linked to it, such as abolishing the work capability assessment. I have been here for 10 years—some might say it feels like longer—but before entering this place, I campaigned, as the chair of the Disability Benefits Consortium, to abolish the work capability assessment. I know that disabled people and their organisations are grateful and thankful for the inclusion of that measure in the wider package that the Government are bringing forward.

Although it seems to have been lost in some of the debates we have had on the subject, I am also mindful that in my own constituency, the number of claimants for PIP will rise in this Parliament, spending on that will continue to rise in this Parliament, and the 12,700 universal credit claimants in my constituency will get an additional payment under this Government’s plans, which will be the first ever above-inflation rise in universal credit. There is much to gain and much that is supported by disabled people and their organisations in the package that the Government have brought forward.

I particularly welcome the Government’s commitment to support more disabled people into work. We need to challenge ourselves a little more in this place about some of the language of vulnerability. Being seen automatically as vulnerable because of a health condition or impairment is not in line with the social model of disability. Many disabled people find that patronising and offensive, and we need to update our system, just as we updated our system thanks to previous Labour Governments. We had the first ever blind Secretary of State in David Blunkett—now Lord Blunkett—at a time when the benefits system said that blind people were not required to participate in work-related activity. The benefits system is not a static beast: it is an evolving creature that needs to be updated to reflect changes in assistive technology, medication and adaptation and advances in technology.

We must not end up with a system in which people are written off and parked in a system because it is too difficult to get them into work. That is not a Labour solution. We are the party of full employment, which must and should include disabled people if we are committed to disability equality and if we are the party of progress. I will chip in that this party takes no lectures on what is progressive from nationalists, whether it is Scottish nationalists or the populists in Reform. We see the costs to disabled people of parking under the former benefits system and legacy benefits: the longer that somebody is out of work, the more ill health that they experience, including mental health and depression, and the more costs that they incur for the NHS. There are state benefits and individual benefits for getting the right support.

I speak from rather too much personal family experience. My mum has schizophrenia and my dad had a stroke in his 40s. He was told by the jobcentre, “This is what you will get. Now, basically, sod off—we do not want to see you, and we do not expect to provide you with anything.” He found his own way back into work through going to university as a mature student—well, not that mature—at Newcastle University, and he graduated in the same year as me.

We should look at the wider picture of full employment. I particularly welcome the Government’s broader aim of reducing the disability employment gap, which was deeply neglected for 14 years, and transforming jobcentres from benefit administration centres. They had been failing not because of a lack of will or frontline staff, some of whom are absolutely excellent, but simply because the job they were given to do had changed from being about supporting people into work to simply administering a failing system that, as we discussed earlier, had the highest fraud levels ever seen in the UK social security system.

I think most of us believe that disability equality is measured not in the amount of benefits that individuals receive, but in the shared opportunities and access to life chances open to all in our country. I am deeply mindful of that, because while we had a lost generation under the 14 years of the Conservative Government and the Lib Dem coalition Government, we had a previous Government who were deeply committed to those issues. That Government published a report, 20 years ago today, called “Improving the life chances of disabled people” with an implementation and delivery date that was meant to provide those opportunities and equal access by 2025. Sadly, those coalition and Conservative years set back the clock.

The report is still available to all those who want to see it, and it talks about pathways to work and dedicated employment programmes being necessary, such as the new deal for disabled people. Those programmes were largely demolished by the coalition. It talks about the importance of the role of the NHS, GPs, occupational health and rehab. Again, a Labour Government are now fixing the wider NHS problems to make those aims and objectives deliverable today. The then Prime Minister’s strategy in the report committed to changing the system so that it tested functionality and ability to contribute, rather than writing people off. Again, this Government have had to come back to that after a lost decade.

We had a report 20 years ago that talked about the necessity of a better equipment system and the need to improve access to work—something that Ministers are committed to today and are beginning to transform with faster assessment processes and by delivering the kit needed. The report also talks about the importance of engaging with employers and the positive role that Jobcentre Plus could play in engaging employers early in the process. Sadly, we have seen a long delay in delivering those improved life chances, but this is a Labour party back in government and trying to deliver disability equality and improve the life chances of disabled people. The measures in this Bill are integral to that aim.

As I say, I am concerned about some of the amendments before us. I also have some concerns that the Bill needs to go further in tackling barriers to work for disabled people, such as the benefits structure, including for those in supported accommodation. It is great that we have the right to try, but more is necessary. We also need to go a bit further with employers, including around reasonable adjustments and ensuring that employers do not accept resignations based on ill health immediately, but look at the packages of support that might be necessary, as well as working with them to tackle discrimination. The Federation of Small Businesses in particular, which has done work on this issue previously, would be a really useful partner to have going forward.

Universal Credit and Personal Independence Payment Bill

John Milne Excerpts

2nd reading
Tuesday 1st July 2025 Commons Chamber

[John Milne (Horsham) (LD)]

I have great respect for the experience and intelligence of the Ministers behind the Bill, but what we have left in front of us today is no more than a clumsy salvage operation. How on earth did we end up here? The Government say that the cost of disability benefit is spiralling out of control. They say there is no option but to make cuts. However, the premise behind this argument is too simplistic. Overall, the cost of in-work benefits as a percentage of GDP has not changed much, because every time a Government try to cut one benefit, another rises in its place to compensate.

Before any changes were proposed, there should have been a serious analysis of what is driving the surge in PIP claims, but Ministers have made little attempt to understand why—it is just a curve on a spreadsheet that needs to be flattened. We are left with the implicit assumption that the Government believe that hundreds of thousands of people are currently receiving benefits that they do not really need and do not deserve.

However, there are lots of factors driving this increase, some of which are actually a direct knock-on effect of other Government policies. For example, many of the extra claimants are the result of a recent rise in retirement age; the Government have simply shunted one benefit cost—pension payments—into another—PIP. Another big slice of the increase comes from people who are unable to access healthcare in a timely fashion, especially since covid, and have therefore fallen out of the workplace. Perhaps most of all, people are driven towards benefits by the terrific rise in the cost of living—they just cannot get by any more. Fundamentally, life costs more for people who are disabled. Besides the impact on daily living, many treatments and aids are not available on the NHS.

Overall, there are three telltale signs that what we are looking at is a botched compromise. First, we have the new four-point rule for PIP assessments. Any question that scores a one, two or three will not make any difference to the outcome. If someone cannot undress their lower half and needs help to go to the toilet, incredibly, they will not qualify for help. There is literally no point in asking half the questions on the form. The whole four-point rule has been dreamed up not because anyone thinks it is a good way to assess hardship, but to hit an arbitrary cost saving.

Secondly, we have the incomprehensible proposal to change PIP assessments next year, without waiting for the outcome of the Timms review. I quote from the Commission on Social Security, which has written to the DWP:

“The circus around the proposed changes to PIP and universal credit are a classic example of what happens if policy makers do not work with those whose lives are profoundly affected by Government policy.”

Thirdly, we have the decision to give higher benefits to existing claimants than to new claimants, as if someone’s needs were somehow less because they applied after 2026. I do not know how anyone can stand over this as a credible policy.

Even on the most optimistic forecasts, only a relatively small minority of current claimants will be able to find jobs, and no account at all has been taken of regional employment blackspots. For every disabled person who can be helped back into work, there will be others moving in the opposite direction. About a third of ME and MS sufferers who are currently in work will be unable to continue as a direct result of losing PIP support, but they do not figure in the Government’s back to work estimates. We also have the 150,000 people who will lose their carer’s allowance, which is likely to rebound on the health service and wipe out whatever savings the Government had hoped to make.

The Secretary of State has set high standards to be judged by, saying:

“For me, this is a moral mission because I believe that there is a better future for people in so many parts of the country. It is absolutely not cruel.”

Well, it might have been a moral mission, but it is certainly not a moral outcome. This is not fairer and more compassionate, as the Secretary of State has claimed. It is harsher and more chaotic.

The Bill can no longer be considered a serious attempt at welfare reform—it is just a cobbled together scheme to get us through the next 24 hours. I urge all Members to vote against it.

Oral Answers to Questions

John Milne Excerpts

Monday 23rd June 2025 Commons Chamber

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[John Milne (Horsham) (LD)]

Recently I met Kathryn from my constituency who had to give up a £90,000-a-year job in order to care for her husband. With 150,000 carers set to lose their allowance due to PIP eligibility reforms, some of our country’s most hard-pressed households face losing £8,000 a year. Will the Minister confirm that even if the welfare reforms work out to the most optimistic expectations, there will be far more net losers that net gainers among PIP claimants?

[Sir Stephen Timms]

Among households as a whole, there will be more net gainers than net losers from the package. The reason for that is the increase to the standard allowance of universal credit, which according to the Institute for Fiscal Studies is the biggest increase to the headline rate of benefit since at least 1980. We are consulting on support for those who will lose carer’s allowance because of the changes and considering what additional help they may need, including for health and care needs. The hon. Member will have seen in the Bill we have published that we have committed to a 13-week run-on of benefit after an assessment decision so that people have time to adjust to the new situation.

--- Later in debate ---

[The Minister for Social Security and Disability (Sir Stephen Timms)]

We are reviewing universal credit to ensure that it makes work pay and tackles poverty, and we are looking at exactly the kind of problem that my hon. Friend highlights. I would be delighted to meet him to discuss it, because Nicola, Steven and all 7,000 households claiming universal credit in his constituency will benefit from the standard allowance increase proposed in the Universal Credit and Personal Independence Payment Bill, which we will be debating next week; it is the biggest increase in the headline rate of benefits since at least 1980.

[John Milne (Horsham) (LD)]

In her March Green Paper, the Secretary of State promised to provide an additional £1 billion in funding to help benefit claimants back into work, but only £400 million has actually been allocated, and even that will not come until 2028-29. We have heard some talk of efficiency savings, which is practically the definition of a magic money tree if ever there was one, so will the Minister confirm that the promised £1 billion for employment support will be all new money, and not cannibalised from other vital DWP services?

[Liz Kendall]

Yes. Already this year, we are rolling out £300 million of support through our Get Britain Working plan and Connect to Work. That will rise to £600 million next year and build to an additional £1 billion. This is the biggest ever investment into employment support for sick and disabled people, because we believe work is the route out of poverty. We want to build dignity and a better life for those who can work, while protecting those who cannot.

Oral Answers to Questions

John Milne Excerpts

Monday 12th May 2025 Commons Chamber

[Torsten Bell]

My hon. Friend raises an important point. Although we celebrate the success of auto-enrolment, as the hon. Member for Mid Bedfordshire (Blake Stephenson) has just done, we must complete the job. We need bigger and better pension funds that are better able to deliver returns for their members, support our economy and invest in infrastructure and private assets in the months and years ahead.

[John Milne (Horsham) (LD)]

10. What estimate her Department has made of the potential impact of changes to the eligibility criteria for personal independence payment on the number of people receiving that payment who will move into employment.

[The Minister for Social Security and Disability (Sir Stephen Timms)]

Pathways to Work sets out reforms to stop people falling into inactivity. They include tailored employment support for people out of work on health and disability grounds, including those claiming personal independence payments, so that they can fulfil their ambitions like everybody else.

[John Milne]

The Government say that their PIP reforms will help people into employment, but the Multiple Sclerosis Society says that 60% of sufferers believe those reforms will make it harder for them to find work, not easier. An estimate must have been made of what percentage of claimants will feasibly enter employment as a result of these reforms. Will the Minister share those figures?

[Sir Stephen Timms]

This is a very important set of reforms, for exactly that reason—to make sure people do have the opportunity to move into work. One in five working-age PIP claimants were in work in March last year; we want many more to have that opportunity. We are going to improve employment support substantially, Connect to Work is being rolled out across the country this year, and there will be an additional £1 billion per year for employment support by the end of the Parliament. As the hon. Gentleman knows, the impacts of these changes will be set out by the Office for Budget Responsibility at the time of the autumn Budget, and there will be very big improvements for those who are intended to benefit from them.

Public Authorities (Fraud, Error and Recovery) Bill

John Milne Excerpts

Report stage
Tuesday 29th April 2025 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I shall impose, with immediate effect, a four-minute time limit.

[John Milne (Horsham) (LD)]

When it comes to public money, everyone accepts the importance of preventing fraud; there is no dispute about that. The mere thought that our benefit system could be exploited loosens the cement holding our welfare system together. However, if we look back in history, there has been a track record of fraud recovery measures not delivering what was hoped. This measure will also probably never save the £1.5 billion that is expected of it, so I ask: will the alleged rewards of this legislation ever match the scale of the imposition on our civil liberties, and are we really going after the right targets?

We all want to catch deliberate and professional fraudsters, but they are precisely the people who are astute enough to change tactics, set up separate bank accounts, and avoid suspicion. Instead, it will be the innocent and the accidental claimants who fall into the trap. The implicit assumption is that we should trust in the DWP as a completely error-free organisation across the entirety of its massive operation. But the DWP does make mistakes. It makes mistakes all the time. And even when it knows that it has made a mistake, and it has been told so, it is very capable of making the same mistake all over again.

In my constituency of Horsham, Anthony and his husband were accused of providing misinformation to the DWP and were overpaid £10,000 as a result. Anthony protested without success. After a long fight the case went to appeal. The tribunal wasted no time deciding in his favour—it was an open and shut case. But then, earlier this year, Anthony and his husband were migrated over to universal credit. After confirming all details were correct, the DWP overpaid them again, and then sought to claw the money back over the following months. The DWP’s mistake, but Anthony pays the penalty.

The DWP has its rules, but real life does not run in straight lines. Real life is messy. How can we possibly rely on the DWP to mark its own homework when we know that there are just four fraud advisers per regional office to handle cases flagged by frontline staff?

Yes, there are some checks and balances within this legislation, but what is really needed is a profound cultural change within the DWP, and that is much harder to achieve. The common experience of people who have to deal with the DWP on a daily basis is that they feel that it is always looking to catch them out. Years and years of inflammatory rhetoric under a succession of Conservative Governments have convinced people to regard the DWP as their enemy, not their friend. If anything, the Bill digs that hole a little deeper.

What concerns me most about the Bill is its extreme overconfidence. It assumes that Government agencies always get things right and that individual citizens are to be automatically treated as objects of suspicion. In Committee, the Government were resistant to any amendments except their own, so I very much hope that they will reconsider today and accept the Liberal Democrat amendments.

Statutory Sick Pay

John Milne Excerpts

Tuesday 22nd April 2025 Westminster Hall

[Imran Hussain]

As ever, my hon. Friend makes an important and pertinent point. If he bears with me, I will address that later in my contribution. It is actually one of two points I want to address.

Hon. Members will know that I tabled two amendments to the Employment Rights Bill to strengthen its provisions on statutory sick pay. The first sought to bring statutory sick pay into line with the national living wage, so that no full-time worker is forced to live in poverty while unwell. The second amendment aimed to guarantee that no worker would be worse off under the new system, regardless of their earnings—my hon. Friend the Member for Leeds East (Richard Burgon) made reference to that, and I will come on to it.

First, I turn to the rate of statutory sick pay. For far too long, our statutory sick pay system has been one of inadequacy, and it has failed workers when they are at their most vulnerable. The pandemic laid bare just how broken the system is. Over a third of workers rely on statutory sick pay, and at a rate of £118.75 a week it is nothing more than a cruel joke—a poverty wage that leaves workers in financial insecurity, instead of being able to rest, recover and take the time they need to return to work fully fit.

The current rate makes up a mere 16.5% of the average weekly wage in the UK, far behind our European counterparts. To name some, workers in Iceland, Norway and Luxembourg are entitled to up to 100% of their pay during sick leave. However, we do not trail far behind only our international counterparts. When statutory sick pay was introduced in the 1980s, it was equivalent to 35% of the average weekly wage—double what workers can expect today. No other financial responsibility in a worker’s life is ever slashed by 83%. When someone falls ill, their bills, their council tax, their electricity bill, their mortgage payments and their grocery bills do not suddenly go down. That poses the question: why does statutory sick pay remain such a paltry sum, forcing people to choose between their health and their financial survival?

We know that the current rate pushes too many workers into the workplace when they are simply not well enough. It entrenches presenteeism, harming public health, reducing productivity and contributing to longer-term sickness and burnout, which makes workers drop out of the workforce entirely. The clear consensus is that the rate of statutory sick pay must increase, and it must increase in line with the national living wage.

That call is echoed by unions such as Unite and Unison, and by organisations such as the Child Poverty Action Group, Scope, Mind and Disability Rights UK. It is also supported by the majority of the British public. I urge the Minister not to ignore the swell of public opinion or the needs of workers across the UK, and to share the next steps that the Government are taking to fairly recompense workers during periods of illness.

The rate of statutory sick pay is not the only change that is urgently needed. Despite the Government’s best efforts, those on the lowest incomes, who do the hard and vital work in our economy, will be financially penalised for falling ill. These are the workers who are the backbone of our economy: cleaners, carers, drivers and retail workers. They are the very people who can least afford it. Low-paid workers—disproportionately women, young people and disabled workers—will still face the hardest burden.

The reality is that the new 80% earnings replacement rate extends sick pay to those who were previously excluded, which is very welcome, but it risks creating a system where some workers are worse off. I have worked with the Minister for many years, and I am sure that this was not the Government’s intention. But under the new rules, the reality remains that more than 300,000 workers earning between £123 and £146 a week could see their sick pay cut, which is something that my hon. Friend the Member for Leeds East referred to.

While previously a worker earning £123 a week was entitled to an earnings replacement of 95%, which is comparable to statutory maternity leave, for example, now a worker earning £124 for three days’ work a week will receive 80% from the first day of illness—£99.22 a week. Under the old rules they would have been entitled to the flat rate of £118.75 from the fourth day of illness. Under the new rules they will be worse off after five weeks. The fact that it takes five weeks to become worse off should not be seen as a mitigating factor, because this is not just about numbers.

The new rules will directly affect workers with chronic illnesses, those recovering from serious surgery and those undergoing cancer treatment. In short, it affects the people who can least afford to take a financial hit at the most vulnerable time of their life. These are workers who rely on every penny that they earn, and they must not be left behind under the new rules. That is the bare minimum that working people should expect.

I ask the Minister to outline how the Government will be supporting workers with chronic illnesses who fall sick, especially those who currently work and rely on disability benefits such as the personal independence payment to be able to dress, wash and get out and about in their daily lives. These workers have been left terrified by the recent announcement of changes to PIP eligibility criteria, and now they could also see statutory sick pay reduced, if they find themselves in that situation.

I urge the Government to think again about making the most vulnerable in our society pay for economic instability that is not of their making. It is not just an economic issue but a moral one. We can and must go further to support workers during their most vulnerable times.

[John Milne (Horsham) (LD)]

In my Horsham constituency office, I employ a member of staff who has ME. Fortunately, we can be very flexible with their working hours. However, under current law—where statutory sick pay is based on days worked not hours worked—an ME sufferer could easily miss out altogether on sick pay. Does the hon. Member agree that the Government should legislate to ensure that all employees are granted fair access to sick pay?

[Imran Hussain]

Absolutely—that is the crux. As I said before, I acknowledge that the Government have gone a considerable way. The Employment Rights Bill will make significant changes that allow millions of people to benefit from statutory sick pay when they would not have before. But the journey must not end there. The hon. Member is absolutely right that there are many people who are still missing out—there are 300,000 people who will significantly miss out, as I said.

This is not just an economic issue, and it should not be viewed as one. It is a moral issue. The Government have the power to ensure that every worker—whether in an office, a hospital, a factory or on the frontline—can take the time they need to recover without fear of financial ruin. They also have the power to ensure that no worker, especially those with long-term illnesses, receives less under the new rules than they would have received before. Let me be clear: we cannot allow this opportunity to pass without ensuring that every worker benefits from the changes we have introduced. This is our chance to build a fairer society that treats working people with the dignity and respect they deserve.

I hope the Minister, for whom I have much respect and regard, understands that I come at this from a place of support. He has a long track record of understanding these issues, and this is our opportunity. We must go further, because that is the only way we will address this matter, so I urge him to do so. Will he commit to reviewing SSP so that workers no longer have to rely on poverty pay when they are sick? Will he today commit to reviewing the impact of the new changes, specifically in relation to the 300,000 people who will be worse off under the new 80% replacement rate?

On the second question in particular, I urge the Minister to provide information to allow the House to see the impact on those 300,000 people. I do not believe for one minute that the Government intend to make them worse off; but, equally, I do not think we can just ignore it.

Finally, will the Minister outline exactly what steps he is taking to make sure that those with the most severe illnesses, and those who find themselves sick or in recovery for longer than five weeks, do not find themselves unfairly punished? The Minister knows that if we fail here, we will fail an entire generation of workers.

Public Authorities (Fraud, Error and Recovery) Bill (Twelfth sitting)

John Milne Excerpts

Committee stage
Tuesday 18th March 2025 Public Bill Committees

[Steve Darling]

I encourage colleagues to support these proposals about the carer’s allowance. Carers are the backbone of many households across the United Kingdom, and I hope the Minister will support the amendment.

[John Milne (Horsham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Western.

The DWP is making extensive and growing use of algorithms for investigation purposes. Without proper oversight, these systems threaten error, unfairness and bias, which could lead to wrongful debt collection. Our amendment therefore calls for an independent audit of these systems at least every six months, to ensure accuracy and fairness. The audit must be conducted by experts in data science, ethics and social policy with no ties to the DWP or system developers. True independence is key.

The audit look at issues such as accuracy, so whether the algorithms are correctly identifying overpayments; fairness, so whether they unfairly target certain groups or operate with bias; and, above all, transparency and accountability. After each audit, we suggest that a full report must be published, presented to Parliament within 14 days, and made publicly accessible. If serious flaws are found, the Secretary of State must respond within 30 days with a clear action plan to fix these issues. Overall, Liberal Democrats are positive about benefiting from new technology, but we do need to consider whether it offers help, not harm.

In the wider context, what work is the use of AI generating? There are already chronic staff shortages at the DWP, with 20% vacancy rates becoming routine. Disability Rights UK has commented that operational failures now permeate every layer of welfare administration. Fraud investigation teams therefore already lack capacity to address the annual £6.4 billion of overpayments. There are only four fraud advisers per regional office to handle cases flagged by frontline staff, which has created a bottleneck, so that very often 90% of suspected fraud cases go uninvestigated. In other words, one could suggest there is already plenty of fraud to investigate without trawling for more. This amendment ensures regular scrutiny, transparency and fairness. I urge the Minister to consider it.

[Andrew Western]

It is important that I begin by paying tribute to the millions of unpaid carers across this country. The Government recognise and value the vital contribution made by carers every day in providing significant care and continuity of support to family and friends, including pensioners and those with disabilities. The 2021 census indicates that around 5 million people in England and Wales may be undertaking some unpaid care, and many of us take on a caring role at some point in our lives. Like other hon. Members, through my postbag and at events across my constituency, I see much of the work carers do. Carers are fortunate to have some wonderful advocates, not only their MPs but organisations such as Carers UK, Carers Trust and the Learning and Work Institute, to name but three.

We inherited a system in which busy carers already struggling under a huge weight of responsibility had been left having to repay large sums of overpaid carer’s allowance, sometimes worth thousands of pounds. We needed to understand exactly what had gone wrong so we could set out our plan to put things right. This is why we launched an independent review of earnings-related overpayment of carer’s allowance. We were delighted that Liz Sayce OBE agreed to lead this review, which is now well under way; we anticipate receiving its conclusions this summer.

The review will investigate how overpayments of carers allowance have occurred, what can be done to best support those who have accrued them, and how to reduce the risk of these problems occurring in future, but we are not sitting back and just waiting for the outcome of the independent review. Right now, we want to make it as easy as possible for carers to tell us when something has changed in their life that could affect their carer’s allowance, so we will continue to review and improve communications. From this April, the weekly carer’s allowance earnings limit will pegged to 16 hours’ work at national living wage levels, so in future it will increase when the national living wage increases. The earnings limit will be £196 a week net earnings, up from £151 today. As a result, over 60,000 more people will be able to receive carer’s allowance between 2025-26 and 2029-30. That is the largest increase in the earnings limit since carer’s allowance was introduced in 1976.

As the Chancellor said at the Budget, we need to look at the current cliff edge earnings rules. A taper could further incentivise unpaid carers to do some work and reduce the risk of significant overpayments, but introducing a taper to carer’s allowance is not without challenges. It could significantly complicate the benefit, and significant rebuilding of the carer’s allowance system would be required. The DWP has begun scoping work to see whether an earnings taper might be a feasible option in the longer term, but any taper is several years away.

New clause 10 sets out four points. As I have mentioned, an independent review has been commissioned, its terms of reference have been published and it is well under way. It is anticipated that it will report its conclusions in the summer. Both the report from the independent review and the Government’s response will be published, and we will report to the House.

I disagree with the hon. Member for Torbay on two issues. It would not be responsible of us to commit in advance to implementing all and any recommendations from such a review, sight unseen. We need to consider them carefully. In addition, the proposed new clause, as I understand it, would not have the effect he desires. We would still be able to recover overpayments of carer’s allowance from benefits under the powers in the Social Security Administration Act 1992.

The new clause would prevent our recovering debts directly from bank accounts of those not on benefits or PAYE, which is one of the additional powers given in this Bill. Even if the new clause operated as intended, it would be disproportionate to suspend all recovery of carer’s allowance overpayments until after the review is concluded, as those with overpayments are already covered by the usual safeguards of appeal rights, affordable deductions and, in exceptional circumstances, waiver. Given the discrepancy this would create between those on PAYE and benefits and those with other forms of income, I hope the hon. Gentleman acknowledges the need to withdraw the new clause rather than create further unfairness in the system.

Regarding new clause 11, I re-emphasise that we will not speculate on the findings or any potential outcomes of the independent review. All recommendations will be considered when the independent review concludes. It would not be appropriate of the Department to commit to this new auditing requirement until that has happened, when we can take a holistic view of carer’s allowance and how DWP uses data. Nevertheless, it is helpful to set out how DWP currently uses data to verify eligibility for carer’s allowance. Verification of earnings and pensions alerts were introduced to carer’s allowance in October 2018 as part of a wider strategy to identify data sources, to verify information provided by the claimant, or to identify if information has not been provided by the claimant. Like all data we use for that, it is not intended to replace the legal requirement of a claimant to provide information that may change their entitlement to social security.

VEP alerts arise from HMRC payroll data. The alert service provides a notification of new earnings or pensions as they come into payment, or if amounts change during the life of the claim. The Department uses business rules to prioritise those alerts, based on data provided by the real-time earnings system. Since 2019, we have actioned around 50% of the alerts received in the Department as part of our focus on reducing the risk and level of overpayments. Having secured additional funding in the one-year spending review, we will be deploying additional resource in 2025-26,to action the alerts received from HMRC as quickly as possible. The Department is also testing an approach of using text messages to remind customers of the need to report changes in their circumstances.

Finally, I emphasise that the use of VEP alerts does not replace human decision making. If the Department processes an alert that highlights a change in earnings and a customer has not reported the change, DWP officials will contact the customer to confirm details have changed. If any overpayment is identified, it will be referred to debt-recovery teams. DWP remains committed to working with anyone who is struggling with their repayment terms, and will always look to negotiate sustainable and affordable repayment plans.

In the light of the information I have set out, and the ongoing work of the carer’s allowance independent review, I urge the hon. Member for Torbay to withdraw the proposed new clause.

--- Later in debate ---

[Rebecca Smith]

I beg to ask leave to withdraw the motion.  

Clause, by leave, withdrawn.  

New Clause 14

Inclusion of systems within the Algorithmic Transparency Reporting Standard

“(1) For the purposes of this section, ‘system’ means—

(a) algorithms, algorithmic tools, and systems; and

(b) artificial intelligence, including machine learning

provided that they are used in fulfilling the purposes of this Act.

(2) Where at any time after the passage of this Act, the use of any system is—

(a) commenced;

(b) amended; or

(c) discontinued

the Minister must, as soon as reasonably practicable, accordingly include information about the system in the Algorithmic Transparency Reporting Standard.” —(John Milne.)

This new clause would require the use of algorithms, algorithmic tools, and systems, and artificial intelligence, including machine learning, to be included within the Algorithmic Transparency Reporting Standard.

Brought up, and read the First time.

[John Milne]

I beg to move, That the clause be read a Second time.

The new clause would require that the use of algorithms, algorithmic tools and systems, and artificial intelligence, including machine learning, should be included within the algorithmic transparency reporting standard. That standard, established by the Government, is supposed to be mandatory for all Government Departments. However, last November, The Guardian reported that not a single Whitehall Department has registered the use of AI systems since it was made mandatory.

Throughout debate on this issue, the Government have consistently downplayed the risk of using AI to trawl for suspect claimants, but if it really is that simple, why have so many organisations come out with concerns and opposition? That includes Age UK, ATD—All Together in Dignity—Fourth World, Amnesty International, Campaign for Disability Justice, Child Poverty Action Group, Defend Digital Me and Difference North East. I could go on: I have half a page, which I will spare the Committee from, listing organisations that have expressed concern. It is quite a roll call.

Governments can and will get things wrong. History tells us that if it tells us anything. In June 2024, a Guardian investigation revealed that a DWP algorithm had wrongly flagged 200,000 people for possible fraud and error; it found that two thirds of housing benefit claims marked as high risk in the previous three years were in fact legitimate, but thousands of UK households every month had their housing benefit claims wrongly investigated. Overall, about £4.4 million was wasted on officials carrying out checks that did not save any money. We know that more mistakes will happen, no matter how hard we try to avoid them. I therefore ask the Minister to support the insertion of new clause 14 as a small measure of defence against future institutional failings.

[Rebecca Smith]

As we have heard, Liberal Democrat new clause 14 would require the use of algorithms, algorithmic tools, and systems, and artificial intelligence, including machine learning, to be included in the algorithmic transparency reporting standard. I have obviously just heard the comments of the hon. Member for Horsham, but I would be interested to know precisely what the Liberal Democrats are aiming to achieve with this new clause and how such reporting would better enable the Government to crack down on fraud and error. Is that the intention behind the new clause?

[Andrew Western]

I share the support expressed by the hon. Member for Horsham for the algorithmic transparency recording standard as a framework for capturing information about algorithmic tools, including AI systems, and ensuring that public sector bodies openly publish information about the algorithmic tools used in decision-making processes that affect members of the public. However, I do not think the new clause is a necessary addition to the Bill, and I will explain why.

First, all central Government Departments, including the DWP and the Cabinet Office, are already required to comply with the standard as appropriate. We are committed to ensuring that there is appropriate public scrutiny of algorithmic tools that have a significant influence on a decision-making process with public effect, or that directly interact with the public. We have followed and will continue to follow the guidance published by the Department for Science, Innovation and Technology on this to ensure the necessary transparency and scrutiny.

Secondly, I remind the Committee that although the DWP and PSFA are improving their access to relevant data through the Bill, we are not introducing any new use of machine learning or automated decision making in the Bill measures. I can continue to assure the House that, as is the case now, a human will always be involved in decisions that affect benefit entitlement.

Thirdly, although I do not wish to labour the point yet again, I remind the Committee that the Bill introduces new and important safeguards, including reporting mechanisms and independent oversight in the Bill, demonstrating our commitment to transparency and ensuring that the powers will be used proportionately and effectively. The DWP takes data protection very seriously and will always comply with data protection law. Any information obtained will be kept confidential and secure, in line with GDPR.

[John Milne]

I am content to beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 15

Offence of encouraging or assisting others to commit fraud

“(1) The Social Security Administration Act 1992 is amended as follows.

(2) In section 111A (Dishonest representation for obtaining benefit etc), after subsection (1G) insert—

‘(1H) A person commits an offence if they—

(a) encourage or assist another person to commit an offence under this section, or

(b) provide guidance on how to commit an offence under this section.’

(3) In section 112 (False representations for obtaining benefit etc), after subsection (1F) insert—

‘(1G) A person commits an offence if they—

(a) encourage or assist another person to commit an offence under this section, or

(b) provide guidance on how to commit an offence under this section.’”—(Rebecca Smith.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.