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.

--- Later in debate ---

[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.

--- Later in debate ---

[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).