State Pension Age: Women

Debate between Nick Thomas-Symonds and Ian Blackford

Wednesday 29th November 2017 Commons Chamber

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

I beg to move,

That this House calls on the Government to improve transitional arrangements for women born on or after 6 April 1951 who have been adversely affected by the acceleration of the increase to the state pension age.

Madam Deputy Speaker, may I wish you and everybody else in the Chamber a happy St Andrew’s day for tomorrow? With your forbearance, I will just remark that today is the 50th anniversary of the mighty Hibernian football club defeating Napoli—with Dino Zoff in goal—5-0 at Easter Road, ensuring that they went on to the next stage of European football.

I am delighted to open the debate and to move the SNP’s Opposition day motion calling for mitigation for women born in the 1950s. We are here in support of the Women Against State Pension Inequality Campaign and its efforts to secure fairness for women affected by the acceleration in their retirement age. I am saddened that we are having yet another debate on this issue, but the fundamental fact is that the Government should have taken action to mitigate the increase in women’s pensionable age. There must be action. The 3.8 million affected women have waited simply far too long for effective mitigation.

[Nick Thomas-Symonds (Torfaen) (Lab)]

The right hon. Gentleman will recall that we both called for action well over two years ago when he and I were our parties’ respective pensions spokespeople. Does he share my deep frustration that we have still had absolutely nothing?

[Ian Blackford]

I welcome that intervention, and I certainly look back fondly on the period when he and I were holding the Government to account. When the evidence is before us that the women did not get appropriate notice and that the acceleration is happening so quickly, it is an absolute outrage that we have had nothing from this Government.

Local Government Pension Scheme

Debate between Nick Thomas-Symonds and Ian Blackford

Monday 24th October 2016 Westminster Hall

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

I beg to move,

That this House has considered e-petition 125475 relating to the Local Government Pension Scheme.

It is a privilege to serve under your chairmanship, Sir Edward. I appreciate that, on the face of it, the motion is about the corporate governance of local authority pension funds in England and Wales, and the interaction with central Government in certain circumstances, but it is also about infrastructure investment in a broad sense. In introducing the debate, I am minded that it is about local authority schemes in England and Wales, but it forms part of a wider debate on corporate governance and infrastructure investment globally. Indeed, there are important initiatives in that regard in Scotland. The primary reason I am introducing the debate is in my capacity as a member of the Petitions Committee, but I should also note that I am the Scottish National party spokesperson on pensions.

On 23 September, new regulations affecting local government pension schemes were laid before the House and they come into force in just a few days’ time, on 1 November. To put that in context, we are talking about a very large market in the UK. According to the Local Government Pension Scheme Advisory Board, as of 2015 local authority schemes held £217 billion of assets, across 91 local authority pension funds that have 5 million members.

We should welcome the principle of infrastructure investment and pooled funds, but we also need to recognise the debate in the overall context of pension funds. Of course, across the pension fund landscape, there is a desire for growing diversification; and there is the issue of low returns from Government bonds, which affects many pension funds, and the questions of whether they go into deficit and how they meet their future liabilities. In that regard, the debate about infrastructure investment is important, and the costs and benefits, and the potential returns, of pooling local authority pension funds are worth considering.

Other countries, most notably Canada, have already embraced those challenges and have done so with what is perhaps a more effective corporate governance model than the one we have today in the United Kingdom.

[Nick Thomas-Symonds (Torfaen) (Lab)]

Previously, I served as my party’s shadow Pensions Minister and I was struck by the concern of people I met, particularly scheme members, about where and how their own funds were invested. Does the hon. Gentleman agree that it is the wishes of scheme members that should be paramount in any corporate governance model to which he is referring?

--- Later in debate ---

[Ian Blackford]

I am grateful for that advice, Sir Edward, and will move on. I was trying to put across the point that, regarding the Government interfering in local government pension schemes, their track record on pensions is not something I would see as commendable.

Unison has argued that investment decisions should be made by their funds and their members. I agree. Let us remember that the pension funds we are talking about are members’ funds. The Local Government Association has also said that there is even the risk of the regulations and the Secretary of State infringing European law on Government intervention in pension fund investment—a point that was made earlier. I find myself, not for the first time, on the side of European law and against the Government.

The Local Government Association has welcomed some of the changes, stating:

“Under the previous LGPS investment regulations there were express limits and thresholds on the assets that LGPS funds could invest in. The new framework moves the LPGS to a ‘prudent person’ approach as exists in the private sector. Under this approach outright limits and thresholds are replaced with a system that gives LGPS administrating authorities more flexibility and requires them to have their own policies on asset allocation, risk and diversification.”

I do not think anyone here would object to that but, having given local authorities that clear mandate, we need to see them investing under the conditions set for them and in the best interests of the members, without interference from Government.

On the Government reforms, the Pensions and Lifetime Savings Association states:

“We agree with the Governments proposals for pooling and the need to ensure that fund are committed to delivering these pools. However, there is a risk that such broad powers, combined with the lack of an explicit fiduciary duty, could ultimately be used by a future government to direct what funds invest in, with limited regard on the impact to the payment of members benefits and the costs to employers and members.”

[Nick Thomas-Symonds]

Is it not important that there is full transparency in respect of those costs so that everyone—scheme members and the public—can see precisely what is being charged to members?

[Ian Blackford]

Absolutely. The hon. Gentleman makes an important point that should be seen in the wider context of information that should be given to plan holders, including those in the state pension scheme. All potential pensioners should be given an A4 sheet detailing their entitlements, backed up by transparency about the charges for all the schemes invested in. There is more work to be done.

I ask a simple question: is it really the Government’s intention to be in a position in which they can be challenged regarding seeking to direct local authority pension schemes? The Pensions and Lifetime Savings Association states that the Government ought to pause and reflect on their obligations and on the importance of local democracy and accountability. In their consultation document, the Government state:

“However, given the very large sums of public money at stake, we believe that it is entirely appropriate for the Secretary of State to be able to intervene where concerns have raised, having taken account of all available evidence.”

That is illuminating. As a number of us have said, we are talking about plan holders’ money. Yes, there must be regulation and oversight, but the Government are hardly a neutral participant in the process and they must think again and learn from best practice elsewhere.

Earlier this year, new legislation came into force in Quebec, which has been framed as a measure that potentially ensures that costly defined-benefit plans are sustainable in the long run. We should consider having that here. Under the legislation, the province no longer requires defined-benefit plans to fund themselves based on short-term assumptions about their own finances and market volatility. Instead, they need to fund themselves based only on long-term, less conservative assumptions. The law, which aims to reduce contribution volatility for employers and thus make defined-benefit plans more sustainable, is the first of its kind in Canada. The changes will be particularly supportive when it comes to longer-term infrastructure investment. That is the kind of debate that we ought to have in this country.

The e-petition motion, and the changes to the governance of pension schemes, relate solely to England and Wales, but it is worth reflecting on the fact that there is active engagement on the topic of local authority investment in infrastructure in Scotland, where responsibility is devolved to the Scottish Parliament. The SNP-led Scottish Government are committed to changing pension scheme regulations to ensure that they are not a barrier to local government pension schemes investing in infrastructure, and they are working with the scheme advisory board to achieve that. We in Scotland realise that there needs to be more of a balance between encouraging that approach and paying due regard to the responsibility of scheme managers to invest pension fund moneys in accordance with the scheme managers’ fiduciary duty. The Scottish Government are committed to achieving that delicate balance.

The discussion of pension scheme investment takes place in a wider context, which includes activities centred on the cities and a major programme of infrastructure investment. Cities and their regions are key drivers of our economy and the Scottish Government are committed to working with all our cities to unlock investment, whether individually, collectively through a city deal, through one of the Scottish Government’s devolved initiatives to stimulate growth and deliver infrastructure investment, or through a combination of all those measures.