Pension Schemes

Debate between Paul Maynard and Stephen Timms

Thursday 2nd May 2024 Commons Chamber

[Paul Maynard]

My right hon. Friend has pre-empted a topic that I was about to come to, because I could see that it was going to come up in the discussion on the Select Committee report. I have now been to see the Cabinet Office Minister with my officials, and my officials then went back for a second visit. So although I cannot give him a timeline, I can say that I am motoring this issue along as rapidly as I can. When I say that this is complex, it is because it is complex; it is not merely because that is a useful and convenient word to cover a multitude of things. We continue to work as fast as we can to try to reach a conclusion. I hear the points that he has made to me, both in this place and outside, about wanting to draw this to a conclusion as best we can.

The regulations that I referred to on the funding and investment strategy clarify what prudent funding plans look like, allow open schemes to take account of new members and future accrual, make it explicit that there is headroom in the regulatory environment for schemes to invest more productively, and require all schemes to be clear about their long-term strategy to protect member benefits.

DB funding levels have improved in recent years, and it is important that schemes take advantage of the opportunities that this brings. The scheme funding regulations will help schemes get the most from their assets, while at the same time ensuring that scheme members can be confident that they will receive the benefits that they are promised.

The regulations embed good practice and build on the existing funding regime for DB schemes by providing clearer funding standards, which will ensure, as far as possible, that schemes are properly funded over the long term. Scheme members can and should be confident that the regulations provide increased security for their promised pensions, which is important to many of the people whom the right hon. Member for Orkney and Shetland is trying to support through this debate.

In addition, the new general code for the Pensions Regulator has come into effect since we last discussed these issues. The new general code consolidated and simplified 10 of the existing codes to make it easier for trustees and those running occupational pension schemes to find the information they need on the regulators’ standards of conduct and practice. It came into force at the end of March this year.

I will do my best to reply to some of the points that have been raised in the debate before I continue with my speech. I am grateful to the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), for covering many of the issues in what was a very helpful report on DB schemes. I know that we often discuss Select Committee reports in this place on a Thursday, and it is quite right that we should do so. Normally, however, we do so after the Government have issued their official response to that Committee report. If the Chair of the Select Committee will forgive me, I will not pre-empt every recommendation in the report. But I can assure him that I sat down for a marathon session with my officials not so long ago, going through every last sentence in the report, so I can tell him that I am giving the matter full consideration.

It is worth noting that both the right hon. Member for East Ham and the hon. Member for Strangford (Jim Shannon) mentioned the auto-enrolment reforms. I am happy to place on the record today our ongoing commitment to consult in the mid-2020s on that issue. I am keen to make progress. I hear all across the Chamber that there is a recognition of why it is important that we make as rapid progress as we can.

The right hon. Gentleman mentioned that he will have to provide a consultation. He summarised the general tone of the contributions very well. Certainly there have been more responses to that consultation than to any other during my time in the Department. I have read most of them myself, rather than just waiting for the summary. I have absorbed similar mood music to the right hon. Member for East Ham, and I hope that we can have a proper Government response very soon.

[Sir Stephen Timms]

I thank the Minister for the attention that he is paying to the recommendations in our report. On the auto-enrolment review recommendations, does he envisage the consultation on implementation happening this side of the election?

[Paul Maynard]

No decision has yet been taken on when that might be. It would be wrong for me to speculate at the Dispatch Box about when it might occur but, as I say, I am keen for it to happen as soon as we can manage it.

The hon. Member for Cardiff South and Penarth (Stephen Doughty) rightly raised his constituents and the AWS pensioners. As he may be aware from the oral evidence I gave to the Work and Pensions Committee, I have met with the pensioners. I fear this always sounds like a cliché, but I listened carefully, commissioned work on the back of that meeting, received that work and reviewed it, and then commissioned some further work on the back of that. The policy development process is ongoing. I am happy to meet the hon. Gentleman. He asked for a timeline. He actually read out my timeline when he quoted my reply to him from 18 April, so he answered his own question. As I say, I will happily meet with him and the pensioners, but I caution him that I doubt that I can say very much more at this stage than I have already. He may want to consider at what point he wishes to have a further meeting, given that it is a long way for them to come from south Wales to hear me say what I already said to them a few months ago, but I am working hard on the issue.

My right hon. Friend the Member for Suffolk Coastal (Dr Coffey) spoke eloquently about the potential value of CDCs, not least in this place. I cannot wait for the Royal Mail one to get off the ground. I welcome her comments on the importance of employers doing right by their employees. We should always note just how many do that. She asked for an update on the pensions dashboards. As I am sure the House knows, there was a reset of the pensions dashboards shortly before I arrived in the Department. I have taken a close personal interest in it, having overseen a few rail infrastructure projects in my time that also needed a bit of a reset. The chief executive of the Money and Pensions Service, Oliver Morley, and I are taking a careful, scrupulous and in-depth interest in the progress of the reset. I am satisfied that we are making good progress. The timetable for connections has now been issued, and we are very much on track.

The hon. Members for Strangford and for Ayr, Carrick and Cumnock (Allan Dorans) mentioned WASPI. I am not sure that there is much that I can usefully add right now, because I do not think that this is the debate for it. I note the comments that were made and entirely understand them. As the hon. Member for Strangford mentioned, there will be a debate on WASPI in this place very soon, as an important part of the engagement with Parliament that the ombudsman identified. I look forward to hearing what Members have to say.

I will do my best to cover a few issues around discretionary increases, because it is important to put on record the legal situation. There are clear legal requirements for schemes to provide indexation on all defined-benefit rights accrued after 1997, and on guaranteed minimum pension rights accrued between 1988 and 1997. Some pension schemes go beyond the legal requirements and provide more generous indexation. If higher levels of indexation are set out in the scheme rules, those levels of indexation must be paid. The scheme rules set out the pension package that members have the right to receive. Some schemes provide additional indexation on a discretionary basis. In some cases, these payments may have been made regularly in the past, but they are not part of the pension package promised by the employer; rather, they are, and remain by definition, discretionary.

I understand the frustration that will cause for pension scheme members no longer receiving such discretionary increases, and during a previous debate I committed to looking closely at the situation in order to better understand whether the arrangements that we have in place are working as intended. That commitment still stands, and I recently met with the Pensions Regulator to personally discuss the issue, along with many of the other concerns that were raised in January, and indeed some of those raised today. I have to stress that the legislation does not and cannot seek to set out exactly what every scheme must do in each and every circumstance. The legislation sets out some minimum standards for indexation. That does not prevent more generous arrangements, which may be brought into a scheme through its rules or provided on a discretionary basis. Those arrangements are the concern of the scheme trustees.

The Government set a minimum legal requirement, which trustees and sponsoring employers can exceed if they choose, if they judge that scheme can afford it in the short and the long term. It is important to achieve a balance, providing members with some measure of protection against inflation while not increasing a scheme’s costs beyond what most schemes can generally afford. Trustees, whether of big firms or small ones, must have an eye to the future viability of their scheme.

I am very grateful to all Members who have contributed to this debate. It has been wide-ranging, partly because, being called “Pension Schemes”, it covers a multitude of issues beyond the more precise ones that the right hon. Member for Orkney and Shetland raised. I am grateful to all who have participated, and I commit to working much harder on this issue in the future, because I know how important it is to many of our constituents.

Child Maintenance Service

Debate between Paul Maynard and Stephen Timms

Tuesday 27th February 2024 Westminster Hall

[Paul Maynard]

The hon. Member makes an interesting point that may risk becoming a digression. I note that the secondary legislation he refers to is regarding automatic uprating of particular indicators. This is a more fundamental change to how the entire structure of child maintenance is conducted, so is perhaps not suited to secondary legislation. We often hear criticism that too much goes through secondary legislation, unscrutinised by this place. As a Member rather than a Minister, I always think that I would rather such a fundamental change be scrutinised properly in the form of a Government Bill. That is an important point.

[Sir Stephen Timms]

Will the Minister give way?

[Paul Maynard]

I will. I am in danger of making things up now, which I should not do.

[Sir Stephen Timms]

I take the point entirely about the complexity of the review’s underlying formula, which the Minister has just been talking about. Can he give us any sense of how long he envisages that review will take to complete?

[Paul Maynard]

I have made a lot of comments today about the drumbeat of ongoing changes and how we implement some of the private Members’ Bills that have gone through, for example. I hear what the right hon. Gentleman says about the progress and the drumbeat, but I am not sufficiently close to the actual data and the information that he seeks. I will ensure that he is written to, along with other Members present today. I am sure that will be discussed when he meets Viscount Younger.

Social Security

Debate between Paul Maynard and Stephen Timms

Wednesday 31st January 2024 Commons Chamber

[Paul Maynard]

Indeed, a few days ago I was asking those questions about whether to take the motions separately or together. They are being taken separately.

[Sir Stephen Timms (East Ham) (Lab)]

I am very relieved that we are getting a proper uprating this year, but the current headline rate of benefits is the lowest it has been in real terms for 40 years. Why have Ministers set benefits at a level so much lower in real terms than was chosen by Margaret Thatcher, Peter Lilley, John Major or Norman Fowler? Why is it so much lower?

Welfare Reform Bill

Debate between Paul Maynard and Stephen Timms

Wednesday 1st February 2012 Commons Chamber

[Stephen Timms]

That is absolutely right; that is how the Government are changing the system. Disabled young people, in recognition of their particular circumstances, have been assured since the 1970s—under Governments of both parties—of an independent income from the state. This Government are taking it away from them. As a result of this change, they will lose that security in exchange for very little saving at all to the Exchequer. The Child Poverty Action Group points out that the current arrangement helps

“young disabled people who may be vulnerable to forming unsuitable relationships, or may avoid forming a suitable relationship due to fears about losing an independent income”,

as my right hon. Friend the Member for Birkenhead (Mr Field) correctly said. The current arrangements give the chance of a more secure and independent life to people who would, through absolutely no fault of their own, find that very difficult otherwise. At less than £10 million a year, that is a price worth paying for the independence of severely disabled young people. I urge the House to reject the Government motion.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I am pleased to welcome the vast bulk of what the Government are doing. It is a pleasure to hear that people are not being defined by their condition and are not being forced to have decisions taken about them on the basis of a label or a particular condition. That is why, as I say, I strongly welcome much of what the Government are doing.

I would, however, like to reflect briefly on amendment 23, which relates to the youth passport. It is not that I particularly disagree with what the Government are doing, but I wish to focus on a few questions, which I hope the Minister will answer, about how we intend to ensure that these young people are given, as it says in the impact assessment, the “equal footing” that the Government rightly want them to have.

My primary concern is that these young people have not been able to acquire national insurance contributions because they are severely disabled. I would welcome some clarity about the expectation that they will accrue these contributions and be protected in the welfare system at the point at which they become an adult. Despite reading the impact assessment and all the debates in the House of Lords and listening carefully to what has been said today, I am still not entirely clear how that will be achieved.