Pension Schemes Bill [HL]

Lord Vaux of Harrowden Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Monday 2nd March 2020 Grand Committee

[Lord Vaux of Harrowden (CB)]

My Lords, the noble Baroness, Lady Sherlock, talked about the business model of these dashboards. The noble Earl has just talked about multiple commercial dashboards. There must be a reason why people will wish to create these things, and therefore there must be a business model behind them. What is the Government’s vision for that?

[Earl Howe]

The Government’s vision is for consumers to have access to their own information if they wish, and a multiplicity of ways to achieve that. We believe that more is better in this context. That is not to make comparisons between one provider and another, but multiple dashboards will give consumers more choice in where they access their pensions information, and will drive innovation to meet what are bound to be the varied needs of those 25 million people with private pension wealth who are not yet in receipt of their pension.

[Lord Vaux of Harrowden]

My apologies: my question was not clear. I was asking specifically about the business model behind this. What is the incentive for commercial providers to create these things? Is it advertising? We have talked about transactions, et cetera. If we are going to have this multiplicity of them, there must be a multiplicity of reasons. Do the Government have a view on the best model and controls around that, whether it might be advertising, transactions or charges to funds?

[Earl Howe]

Scheme providers have been absolutely clear that they are keen for this to happen, mainly because the more exposure that the information has to the particular consumer, the more opportunities there may be for a dialogue between the consumer and the scheme provider—“Are you saving enough? Can we do more for you?”, that sort of thing. They see marketing opportunities in this, but that is very distinct from allowing the dashboard to enable them to enter into transactions. I hope that I have already covered that point satisfactorily.

--- Later in debate ---

[Lord Vaux of Harrowden]

I am staggered by the numbers on the cost of doing this that are bandied around. As far as I can see, the main work here is formatting data into a consistent format so that it can be uploaded to whichever platform it needs to be uploaded to. Frankly, the creation of a platform is pretty trivial stuff. It is not dramatically different to what happened with open banking in that respect; that was a question of formatting data and ensuring that it was in a consistent format. Do we have any idea of the open banking process costs so that we can compare them—and, if they are dramatically different, ask why?

[Baroness Altmann]

I echo the words of the noble Baroness, Lady Drake. A number of elements of the expense shown in the impact assessment are elements that one would have hoped that the industry would take upon itself in any case. I sometimes need to remind providers that automatic enrolment has been an absolute gift to them. It has brought them 10 million new customers on a plate, with all the associated tax relief money. Surely they need to take an obligation upon themselves to modernise their processes and bring their IT into the 21st century. The standard answer is: “It’ll cost too much”, or, “We’ve got our own system, we don’t want to change to a new one”, but in Australia, the Government mandated a particular system that everybody had to adopt so that there was a common standard. It worked very well. My noble friend suggested that the industry delivery group is working on such a potential procedure, which would be excellent. It would incur costs but it would set the industry up for much more business in future on a long-term, sustainable basis.