Pensions (Special Rules for End of Life) Bill

Laurence Robertson Excerpts

2nd reading
Friday 2nd February 2024 Commons Chamber

[Mr Laurence Robertson (Tewkesbury) (Con)]

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

This very small Bill is narrow in scope, but it will provide financial assistance and fairness to people who are terminally ill who have seen the sponsors of their pension schemes become insolvent. It will do that by changing the definition of “terminally ill” for this purpose. I thank the legislative team of the Department for Work and Pensions and my staff for their help preparing the Bill.

I think everyone in the House would agree that those who receive the devastating news that they have a terminal illness should receive as much financial help as possible in their final days. The loss of their right to pension payments is a blow that they should not have to suffer, and that is what the Bill seeks to address.

By way of background, the Bill focuses on the Pension Protection Fund and the financial assistance scheme. The Pension Protection Fund was established by the Pensions Act 2004 and pays compensation to individuals when the sponsors of defined benefit pension schemes—usually their employers—become insolvent and lack the necessary assets to pay those pensions to the level that the Pension Protection Fund would ordinarily pay. That applies to insolvency that has taken place on or after 6 April 2005. The financial assistance scheme applies to individuals whose pension schemes were unable to meet their pension liabilities in full if those schemes started to wind up between 1 January 1997 and 5 April 2005.

The Bill relates to compensation payments from those schemes made to people with terminal illness. When meeting the liabilities of pension schemes, the Pension Protection Fund can pay a one-off lump sum to someone who is terminally ill. The financial assistance scheme can start to make pension payments, but not pay a lump sum, to someone at any age with a terminal illness. The issue is the definition of a terminal illness. The Pension Protection Fund and the financial assistance scheme use the same legal definition of terminal illness, which is that a person is terminally ill

“at any time if at that time the person suffers from a progressive disease and the person’s death in consequence of that disease can reasonably be expected within 6 months.”

[Richard Fuller (North East Bedfordshire) (Con)]

I commend my hon. Friend on bringing forward this Bill, and I hope that he will not mind that at times I will ask some questions about it; I may also make some comments later. He was talking about the assessment of what is a terminal illness. Can he spend a bit more time on who is making that decision, and what the range of illnesses is? Are the illnesses set down by the NHS? Is there a limited list of those illnesses? Who assesses whether a person is within the bounds of what would be called a terminal illness for the purposes of this Bill?

[Mr Robertson]

I thank my hon. Friend for his intervention. As I understand it, the assessment is made by a health professional. What illnesses he or she is entitled to take into account goes beyond the scope of this Bill, and I do not think that I can list those illnesses. The Bill is about the length of time someone is expected to live. If he will allow me, I will leave my explanation there.

[Sir Greg Knight (East Yorkshire) (Con)]

On that point, is there provision for a second opinion to be obtained in cases where there is doubt? If my hon. Friend cannot answer that today, will he write to me?

[Mr Robertson]

I thank my right hon. Friend for that intervention. I am not aware of the process that someone would have to go through when being assessed. The assessment of the time that someone has to live, which is a technical legal point, is particularly concerning, but I am certainly happy to look into that.

The definition of “terminal illness” is a disease that can reasonably be expected to bring an end to somebody’s life within six months. The Department for Work and Pensions used that definition for calculating benefits, but in the Social Security (Special Rules for End of Life) Act 2022, that six months was extended to 12 months. It therefore seems logical to change the definition of “terminally ill” applied by the Pension Protection Fund and the financial assistance scheme, so that it is consistent with the definition that is applied when considering social security payments. The Bill seeks to make that extension from six to 12 months.

It is hard to know how many people would benefit from this legislation. I suppose, paradoxically, we do not want people to benefit from it, because that would mean that the sponsors of their pension fund had become insolvent, which we do not want to happen. However, the Bill will help terminally ill people where that is the case.

While the Bill’s scope is technically limited to the Pension Protection Fund and the financial assistance scheme, I hope that my bringing it forward will encourage any workplace pension scheme that does not have provision for members with a terminal illness who have a life expectancy of 12 months or less to consider putting that in place. Many private pension schemes can already make what are called serious ill health payments under tax law to a member who has up to a year to live. That would be a change well worth making.

[Richard Fuller]

My hon. Friend has made another interesting point. He says that the Pension Protection Fund is there for when a pension fund fails, and that the Bill may be an incentive for viable pension funds that do not already use a 12-month period to do so, and to mirror what the Pension Protection Fund does. Will he, or perhaps the Minister, tell me whether there is an understanding of how many pension funds have a 12-month provision? Will the Bill increase that in viable pension funds?

[Mr Robertson]

I grateful to my hon. Friend for making a good point. I do not have those figures, and I do not necessarily expect the Minister to have them to hand, but we should look into that, and try to take that point forward.

[Rob Butler (Aylesbury) (Con)]

My hon. Friend is making a powerful speech that I am sure most of us will have no difficulty agreeing with. In the lead-up to the Bill’s introduction, has he spoken to charities and other organisations about what impact extending the period from six to 12 months will have on people’s real lives, and on their families and friends?

[Mr Robertson]

I thank my hon. Friend for that. Yes, I spoke in particular to the Marie Curie charity, which told me of some very sad cases. It is important to stress that the Bill refers to occasions when the pension fund or its sponsoring company becomes insolvent, so the Bill is narrow in scope. However, he makes a good point. The charity gave me a number of examples, and there are many others. That brings us back to my point that we should look to extend the 12-month provision beyond the Bill to other pension schemes. The last thing that someone given a terminal illness diagnosis needs is more financial problems. If there is anything we can do about that, I am happy to take it forward with the Minister and the Government. I thank my hon. Friends for their interventions.

Determining the length of time that someone has to live falls to health professionals, and it is a heartbreaking and difficult judgment to make. Modern medicine, surgery and palliative care—such as that provided by the excellent Sue Ryder hospice in my constituency—and the general care provided by our NHS staff make that judgment even more difficult. I therefore feel that it is right to extend the definition of “terminally ill” from the very narrow band of six months to the more accommodating threshold of 12 months. That is fairer not only to the people who are ill, but to those who have to make that very difficult judgment—a judgment that it is especially difficult for health professionals to make when they know that a person’s pension payments may rest on it.

The Bill extends throughout the United Kingdom, and would come into force in England, Scotland and Wales

“on such day or days as the Secretary of State may by regulations appoint”,

and in Northern Ireland when the Department for Communities appoints by order. I am about to wind up, but I think my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) wishes to intervene again.

[Sir Greg Knight]

My hon. Friend is generous. I think he is referring to clause 2(4). Is he entirely happy about the wording of that subsection? The Bill could be passed with unanimous support from all parts of the House, but under that subsection, a Minister could later decide not to implement the measure. We would be unable to do anything about that.

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[Mr Robertson]

I am grateful to my right hon. Friend for mentioning that point. The Government have been very co-operative while I have been preparing the Bill, so I remain confident that they will not hesitate to name the day. Technically, the Bill will not come into force until the Government decide that it will, but I am confident that that will happen. I thank my hon. Friends for their interventions, and for all the reasons I have stated, I commend the Bill to the House.

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[Mr Robertson]

I thank the Minister for that response and the shadow Minister for her contribution. I also thank my right hon. and hon. Friends for their speeches and interventions. They all raised good points, but I think the most important one, made by my hon. Friend the Member for Shipley (Philip Davies), was that the Bill takes us in the right direction but should not be the last word on this issue. We must look at assessing people in terms of illness, because it is not just about time; it is about the diagnosis and the seriousness of those illnesses. I am pleased that the Minister picked that up. We must look to extrapolate this principle into other pension payments and schemes, as I mentioned in my speech.

Finally, I am pleased that the Minister confirmed that the Government intend to ensure that the Bill starts to have an impact as quickly as possible after Royal Assent. I look forward to working with her and the Government on that basis.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).

Pensions (Special Rules for End of Life) Bill

Laurence Robertson Excerpts

Committee stage
Wednesday 24th April 2024 Public Bill Committees

[The Chair]

With this it will be convenient to consider clauses 2 and 3 stand part.

[Mr Laurence Robertson (Tewkesbury) (Con)]

It is a pleasure to serve under your chairmanship, Dame Siobhain. I thank you, the Minister and all Committee members for attending. I also thank the Department for Work and Pensions legislative team, who have been a great asset and a source of useful assistance throughout the process. I thank the Opposition for their support and my hard-working staff for their efforts.

As I said on Second Reading, the Bill is small and narrow in focus, consisting of just the three clauses. It seeks to amend existing legislation that covers the definition of terminal illness for the Pension Protection Fund and the financial assistance scheme, which is currently a life expectancy of only six months. We seek to increase that definition to 12 months. The extension would allow people with a terminal illness to receive terminal illness payments when they are likely to have 12 months or less to live. Such payments are a one-off lump sum from the PPF scheme or an early payment from the FAS.

I am sure we would all agree that when someone receives the devastating news that they have a terminal illness, they should receive any and all financial help possible during their final days. The constant advances in medical science—treatments, drugs and palliative care—make this Bill that much more important, because things are rather difficult to predict. This extends to the pension schemes as well. Most private pension schemes already provide cover in the form of serious ill health payments.

As will be explained, the Government passed legislation two years ago to ensure the same outcome for individuals receiving certain social security benefits such as universal credit, employment and support allowance, and personal independence payments. I came to understand, however, that two aspects of pensions legislation lacked updated coverage. That legislation relates to the Pension Protection Fund and the financial assistance scheme—the focus of the Bill—which retained the six-months definition. The Bill seeks to rectify that.

In case any right hon. or hon. Members present in Committee were not at the Second Reading debate, I shall explain briefly what exactly the PPF and the FAS are. The Pension Protection Fund was established by the Pensions Act 2004. It pays compensation to individuals when the sponsors of their defined-benefit pension schemes—usually their employers—become insolvent and lack the necessary assets to pay pensions to the level that the Pensions Protection Fund would ordinarily pay. That applies for insolvencies that take place on or after 6 April 2005. The financial assistance scheme applies to individuals whose pension schemes were unable to meet their pensions liabilities in full when those schemes started to wind up between 1 January 1997 and 5 April 2005.

Currently, the PPF can make a one-off lump sum payment to someone who has not yet drawn their PPF compensation but is terminally ill. The FAS makes similar provision by allowing the early payment of financial assistance. Both the PPF legislation and the FAS regulations use the same definition of terminal illness. As I alluded to earlier, the Bill will bring the Pension Protection Fund and the financial assistance scheme in line with the Department for Work and Pensions’ definition of terminal illness, which, following the Social Security (Special Rules for End of Life) Act 2022, was likewise extended up to 12 months when calculating certain benefits. Therefore, the Bill seeks to harmonise the legislative definition of terminal illness such that following its commencement all legislation will use the extended 12-month definition.

I repeat that I hope that by harmonising the legislative definition we can encourage all pension providers that do not already have provision for considering serious ill-health payments when the member has a life expectancy of 12 months or less to consider putting that in place or updating or extending their scheme rules. Yes, the Bill has a narrow scope, but it might act as a prompt and as encouragement to other pension providers.

The Bill is legally tight, consisting of just three clauses. Clause 1 amends the current definition of “terminally ill”, normally referred to as “end of life”, from six months to 12 months in all relevant legislation; clause 2 covers the territorial extent and commencement of the Bill; and clause 3 establishes the short title of the Act: the Pensions (Special Rules for End of Life) Act 2024.

[Sir Greg Knight (East Yorkshire) (Con)]

Is my hon. Friend entirely happy with the wording of clause 2(4)? Has he had an undertaking from the Minister that the Government will bring the Bill into force as soon as possible? I ask because I was lucky enough to take the through Parliament Parking (Code of Practice) Act 2019, which had a similar clause. Some five years later, we are still waiting for the Government to introduce the parking code of practice, which is outrageous. If my hon. Friend has not had an undertaking from the Minister, does he think he should obtain one?

[Mr Robertson]

I am grateful to my right hon. Friend for reminding me that the Bill’s introduction depends on the Minister taking action. It was not this Minister who spoke on Second Reading but one of his colleagues, and we did receive an assurance that the legislation would be in place as soon as possible. As I understand it, we need to make sure that the situation in Northern Ireland is brought together with our legislation, because it is a devolved matter. I will come on to that in a minute. The Minister on Second Reading assured me that it would be brought in as soon as possible; I do not know exactly when that will be, but I am sure that the Minister will confirm it today. If he does not confirm it as strongly as we would like, maybe we can intervene on him, but I am satisfied that, given the Government’s support for the Bill, they will seek to introduce it as soon as all the ducks are in a row—that is how I can best describe it. But my right hon. Friend’s point is very important.

The Bill’s territorial extent is slightly complicated, given that aspects of the Pension Protection Fund are covered by devolved legislation in Northern Ireland, as seen in clause 1(3) and (4) and clause 2(2). However, officials are working with the devolved legislature on that matter, and as I understand it our colleagues in Northern Ireland are keen to see the alteration happen as soon as possible.

As explained, the Bill focuses on only the Pension Protection Fund and the financial assistance scheme. Thus, clause 1 and its subsequent subsections seek to amend relevant legislation and provisions connected to the Pension Protection Fund and the financial assistance scheme. Specifically, subsections (1) and (2) amend the definition of terminal illness by changing the period of life expectancy from the current six months to 12 months, in respect of Pension Protection Fund compensation.

[James Gray (North Wiltshire) (Con)]

I warmly congratulate my hon. Friend on this extremely worthwhile Bill. It really is a superb effort and I am grateful to him for it. I am puzzled, however; perhaps I should have asked this question on Second Reading. Who defines whether the person is terminally ill within 12 months? After all, many diagnoses of terminal illness may well last longer than 12 months, and some people may have no such diagnosis. Where does the six or 12 month-period come from? Who decides it, and what is the certification that that is the case?

[Mr Robertson]

I am grateful to my hon. Friend for raising that point. As I understand it, it is a classification or assessment made by the medical person in charge of a person’s very sad case. One of my motivations for introducing the Bill is that, given advances in medical science, it can be difficult to predict how long somebody is likely to live. Six months is a very short period of time and, through appropriate care, somebody can perhaps live longer than that. I seek to extend it to 12 months, which is somewhat more all-encompassing, but it is still a prediction. It is still drawing a line somewhere.

One of the points raised by my hon. Friend the Member for Shipley (Sir Philip Davies) on Second Reading was that perhaps we should assess the person’s capabilities and physical and mental state rather than try to predict how long they will live. That was a worthwhile intervention from him, but I do not think we are at that stage yet. What we are saying now is to extend the six-month period to 12 months, because that would make it a little more predictable—if that is the right word. It is a difficult area and my hon. Friend the Member for North Wiltshire has picked up on a good point.

Clause 1(1) amends schedule 7 to the Pensions Act 2004 and subsection (2) amends schedule 5 to the Pensions Act 2008, with both substituting six months for 12 months.

[Christine Jardine (Edinburgh West) (LD)]

I, too, offer the hon. Gentleman my congratulations. The Bill is extremely worth while. We have talked about the difficulties of diagnosis and the fact that 12 months is a more reasonable period, but does he anticipate that extending the period from six to 12 months will bring a lot more conditions and illnesses into the scope of the legislation?

[Mr Robertson]

I am grateful for that intervention; it is a good question. Not being a medical person, I assume it would bring some more illnesses within the definition, but it will not affect a huge number of people. As I say, the Bill is fairly narrow in scope. What I hope it will do is prompt the providers of other pension schemes to consider adopting the 12-month period rather than six months. Yes, I am sure it will bring in more people with various illnesses. Not being a medic, I would hesitate to go any further, but that is a good point.

Clause 1(3) and (4) make similar provisions to subsections (1) and (2) but for Northern Ireland, amending the definition of terminal illness in respect of Pension Protection Fund compensation payments. Subsection (3) amends schedule 6 to the Pensions (Northern Ireland) Order 2005 and subsection (4) amends schedule 4 to the Pensions (No. 2) Act (Northern Ireland) 2008. Again, both substitute six months for 12 months.

I have a few more provisions to read through yet; I apologise to the Committee. Subsection (5) amends the definition of terminal illness and the period of life expectancy in relation to progressive disease in regulations 2(9) and 17(3D) of the Financial Assistance Scheme Regulations 2005. Again, both substitute six months for 12 months.

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[Christina Rees (Neath) (Lab/Co-op)]

I congratulate the hon. Member on his commendable Bill and thank him for inviting me to be part of his Committee today. Please forgive me, for I should know this, but I cannot find it in the notes: which medical professional would be responsible for assessing the life expectancy term? Would that be confined to one or two medical professionals?

[Mr Robertson]

I am grateful to the hon. Lady for raising that point. My understanding is that it is one medical professional. I cannot give her a specific answer, but I understand that it is the person who is in charge of that case for that particular person. I do not know exactly how senior they are. I understand that it is not subject to second opinions or anything like that.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I thank my hon. Friend for allowing me to intervene at this point. I was responsible as Secretary of State for doing quite a lot of this realignment. In essence, the NHS treats and issues certificates on the basis—which brings in other elements—that the end of life is, in its view, 12 months, so it will be a doctor, nurse or similar who does that. This is a simple alignment with how the NHS defines terminal illness in practice.

[Mr Robertson]

I am grateful to my right hon. Friend for providing more information than I have to hand. As far as I can see, that is the right way to go about this. Twelve months probably gives a little more reassurance to the person making that assessment.

Transitional provisions are guidelines that outline how to transition from the old regulations to the new ones, and saving provisions are designed to protect certain rights, privileges, obligations or legal proceedings that are already in place before the new regulations or orders come into effect. That means that subsections (7) and (8) of clause 2 simply allow for the creation of regulations or orders that include special clauses to manage the change from old to new regulations, protecting against any unintended consequences that might arise during the transition.

To return to the Bill—we are getting there—subsection (9) of clause 2 provides that regulations under subsection (4), relating to the Secretary of State for Work and Pensions and with the territorial extent of England, Wales and Scotland, will be made by statutory instrument. That is a form of legislation, as everybody here is aware, that allows a provision of an Act of Parliament to be subsequently brought into force or altered without Parliament having to pass a new Act. Subsection (10) provides that an order made under subsection (5) of clause 2, relating to the Department for Communities in Northern Ireland and with the territorial extent of Northern Ireland, is exercisable by statutory rule—again, a form of legislation that allows for detailed regulations to be created without the need for a new Act of Parliament.

Finally, as I mentioned, clause 3 is simply the short title of the Act, which, if the Bill is passed, will be the Pensions (Special Rules for End of Life) Act 2024. I do hope that it will be passed in this Parliament and that the extended definition of terminal illness—life expectancy of 12 months—will come into force, providing a little bit of ease to individuals who have received the most devastating news. I thank the Committee for its indulgence.

[Dr Coffey]

It is a pleasure to speak in Committee about the Bill, which I strongly support. As I have already pointed out, some of the realignment involved is intended to ensure some simplicity for people at one of the most difficult times of their lives, so that they do not have to go around getting different aspects of treatment or negotiating. We made that good change a few years ago. There have been various bits of legislation along the way—some welfare and pensions legislation is done through regulations and some through primary legislation, so it can seem cumbersome. But this is the right moment to make sure that this part of the support available to people in their difficult last moments is fully aligned.

I would like to say something to the Minister. I am conscious that getting even regulations through Parliament takes time and more effort from officials. I would like him either to confirm that the regulations have already been drafted in anticipation of Royal Assent, so that they can be laid before Parliament straight away, or to say that he will consider simply changing the element in question. I have been encouraging others leading private Members’ Bills through Parliament to change the commencement dates so that they come into force three months after Royal Assent.

I am conscious that the Pensions Regulator and similar organisations might have to address some issues, but they should know that the Bill has the full support of this House—of both Houses, I anticipate. We should not wait for further legislation to be commenced, given that people at the end of their lives would welcome this matter being put to bed straight away.

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[Paul Maynard]

I am grateful for that intervention, because I should have thought to start my speech by paying tribute to Frank Field and the immense amount of work he did in the Department for Work and Pensions. He was a thoughtful and humane man, respected on both sides of the House, and I am more than happy to join in paying tribute to him.

Being told that one is nearing the ends of one’s life can be a devastating and frightening experience. It is crucial that those reaching the final stages of their life do not have to worry as much about their finances and can focus on spending their time with the people who matter to them. The Bill takes us one step further toward ensuring that that can happen, building on the changes made back in 2022. I am grateful to my hon. Friend the Member for Tewkesbury for promoting the Bill, and I commend it to the Committee.

[Mr Robertson]

I thank the Minister for that positive response. We look forward to the measure being introduced as soon as practicable. I also thank all members of the Committee for their attendance and contributions today, as well as the team who helped to put the Bill together.

It was rather remiss of me to forget to pay tribute to Frank Field, and I am grateful to my hon. Friend the Member for North Wiltshire for reminding us. A long time ago, before I was elected to this House, I had the pleasure of working with Frank on a charity project I was involved with, just across the river at Lambeth Palace. We were raising money to create a hostel for homeless women in London at Marylebone complex, just off the Marylebone Road, and Frank was very active member of the fundraising committee. There was no benefit to him; he did it because he felt it was the right thing to do. I pay sincere tribute to Frank.

That seems a good point to finish my speech by restating my thanks to everyone who helped with the Bill.

[The Chair]

I am sure we are all united in sending our condolences to the family and friends of Frank Field, a man who showed us all how to be a Member of Parliament.