Defined-Benefit Pension Schemes

Debate between Philip Davies and Paul Maynard

Wednesday 17th January 2024 Westminster Hall

[Paul Maynard]

I agree entirely. Since coming into this job, I met representatives of the Pensions Action Group— an organisation that covers employees of a number of companies that went into liquidation many years ago. Differing rules around indexation have caused very different outcomes for those individuals, so I am very conscious of the issue. I made a point of meeting them because I believe predecessors have not met them; I wanted to make sure that I heard their case and could reflect on it, and I have commissioned further work from officials. They are aware that that is ongoing, and I look forward to hearing what my officials have to say.

Key to the points I have heard in this debate is the role of trustees. No matter whether they are employer-nominated or member-nominated, they have first to comply with the rules of the scheme and, secondly and crucially, to act in what they regard as the best interests of their members now and in the future. That includes investment decisions that they may choose to make. It also includes decisions on indexation. The trustees will sometimes need to make difficult decisions; that is the nature of trusteeship. The needs of different parties, today and in the future, have to be balanced. They have to ensure that funding problems do not emerge in the future. Trustees and sponsors must work together to seek the best way forward, taking account of a whole range of issues including the long-term health of the scheme.

Depending on the circumstances of the scheme, different models of trusteeship may be more or less appropriate. The type of trustee best for appointment to a scheme will depend upon the characteristics of the scheme. The governance and trusteeship of a scheme is best handled by the scheme and its sponsors. They will know better than anyone else what the scheme’s long-term future looks like and how best to get there, but trustees, regardless of whether they are appointed by members or by sponsors, do not and cannot act to represent any particular group. There are safeguards, however. The Pensions Regulator has powers to remove and replace trustees with an independent trustee or add an independent trustee to a trustee board should it have concerns about the capability or behaviour of a trustee.

A defined-benefit pension is a promise to pay the person concerned a certain amount of pension income every month in retirement for the rest of their life. That means that while the sponsor remains solvent, a person’s retirement income cannot decline below a set amount, regardless of the value of the pension fund or the wider economic situation. In addition, a proportion of the DB pension may also be inherited by a spouse after the pension holder’s death—again, guaranteed in value for life.

Rights in a defined-benefit pension scheme are extremely valuable and we should be rightly proud that such schemes exist for the bulk of today’s pensioners, but ensuring that these rights are protected for all scheme members involves many different parties: trustees, employers, and current and future individual scheme members. The governance of defined-benefit pension schemes must therefore balance the needs of all those different parties. It has to work for today, and in the short and long term. Our priority is to ensure that schemes pay out the full value of the promised pension to each member when it falls due, as set out in the scheme and in line with the relevant legislation. When it comes to indexation, legislation sets out the minimum standard that tries to ensure there is a measure of protection against inflation.

Having listened to the debate today, as well as to other individuals I have met in recent days, it is difficult not to have sympathy with pensioners who have planned on the assumption of receiving certain increases, no matter how discretionary they may be, but then find that their income is not increasing as they had expected or planned on. As much as I can do, I will look closely again at the situation regarding the scheme that I have heard about in this debate—and others that I am sure other Members might have covered had they been able to attend—and try to understand fully what has happened and whether the arrangements currently in place in regulation are working as intended. I will do this by discussing it with the Pensions Regulator in particular.

I will also look at the proposals we made in the autumn statement on improving the quality of trustees. I am not saying that all trustees are awful or anything like that; we have excellent trustees in many pension schemes, but we also have to bear in mind that, as I and the hon. Member for North East Fife (Wendy Chamberlain) said, many large and monolithic employers have a different ability to absorb rapid changes in the pensions landscape compared with much smaller schemes. I do not want smaller schemes pushed into administration under the Pension Protection Fund, which would then lead to reduced pensions for those scheme members. Both must be kept in balance.

I thank the right hon. Member for Orkney and Shetland.

[Philip Davies (in the Chair)]

Order.

Motion lapsed (Standing Order No. 10(6)).

Oral Answers to Questions

Debate between Philip Davies and Paul Maynard

Thursday 24th October 2019 Commons Chamber

[Philip Davies (Shipley) (Con)]

Many of my constituents think that, as far as the Government are concerned, “northern powerhouse” only means Leeds and Manchester, so will the Secretary of State prove my constituents wrong by unequivocally committing to a station stop in Bradford for Northern Powerhouse Rail, which is vital for the local economy?

[The Parliamentary Under-Secretary of State for Transport (Paul Maynard)]

I am sure that my hon. Friend has heard what the Prime Minister has had to say on this matter. He will also know that Transport for the North is looking at options including Bradford for trans-Pennine links. I am immensely sympathetic to his argument.

Oral Answers to Questions

Debate between Philip Davies and Paul Maynard

Thursday 23rd February 2017 Commons Chamber

[Philip Davies (Shipley) (Con)]

Is the Secretary of State in a position to confirm that Bradford will be one of the stations on the northern powerhouse rail?

[Paul Maynard]

I imagine that there is a strong case for that. We are waiting to see what Transport for the North has to say about northern powerhouse rail, but I will be surprised if Bradford does not feature in those plans.

Transparency and Consistency of Sentencing

Debate between Philip Davies and Paul Maynard

Thursday 2nd February 2012 Commons Chamber

[Philip Davies]

They must have had to commit an awful lot of crimes to get themselves into prison, because it is very difficult to get sent to prison in this country.

Let me emphasise the point. In 2009, according to the Ministry of Justice, 2,980 burglars and 4,677 violent offenders with 15 or more previous convictions were still not sent to prison. Today, the Secretary of State was saying that if someone commits a burglary they should expect to go to prison. In one year, however, 2,980 burglars with 15 or more previous convictions still were not sent to prison, which seems rather to defy the message that the right hon. Member for Berwick-upon-Tweed is trying to give.

[Paul Maynard]

Does my hon. Friend share my concern that there are prisons, secure children’s homes and independent institutions where people, on their release, knock on the door begging to be taken back in? Those settings were the only place in which they received the care and support that they needed to be a meaningful member of the local community on their release. Does he share my concern?

[Philip Davies]

I share many of my hon. Friend’s concerns and I am certainly concerned that many people are anxious to get back into custody. There are an awful lot of reasons for that, one of which he has given. Some might argue that another reason why people are so keen to get back into prison is that their quality of life in prison is far better than their quality of life outside prison. When 4,070 prisoners enjoy the luxury of Sky TV in their cells—not even in a communal area—we know that something is fundamentally wrong with our criminal justice system.

[Philip Davies]

My hon. Friend is absolutely right. We have this wretched organisation, HM inspectorate of prisons, the members of which come down from their nine-bedroom mansions in Oxfordshire, go around the prisons and say, “Oh, it’s jolly awful in here, isn’t it? Absolutely terrible.” If those same people came from the same crime-ridden estates that people in prison tend to come from, they would probably say, “It’s jolly nice in here.” There is rather a big disconnect between the backgrounds of the people in prison and of these do-gooders, the prison inspectors.

[Paul Maynard]

As one of those do-gooders—I realise that that might be a matter of concern to my hon. Friend—may I ask whether he has any proposals on how we could improve local authority accommodation for young people, for example, to ensure that the communities where they live are safer for them than a secure custodial setting? What positive proposals does he have in addition to his House of Commons research?

[Philip Davies]

My positive proposal appears to have escaped my hon. Friend. I think I am right in saying that he is a member of the new 301 group, which I thought referred to the number of seats we had to win at the next election; I did not realise it was the target for the number of people we should have in prison, which seems to be the approach advocated. What about the quality of life of many law-abiding people in this country? We talk about the rights of criminals, but what about speaking up for the law-abiding people who think that their quality of life would be improved if more people were sent to prison in the first place? Not only are all those people not being sent to prison, but we still have a system in which someone who goes to court with 100 previous convictions behind them is still more likely not to be sent to prison than to be sent to prison. How on earth can we have a criminal justice system in which that is the case?

--- Later in debate ---

[Philip Davies]

The figures my right hon. and learned Friend dismissed are the ones supplied by his Department. All I can do is give the figures as they are. They indicate that of the 206 people who have been released having served an IPP sentence, only 11 have reoffended. It is up to hon. Members to draw their own conclusion from those figures. The principle that we should not release people from prison until it is safe to do so strikes me and my constituents as a rather good one to have in the criminal justice system. His suggestion that we should release people from prison regardless of whether it is safe to do so seems rather bizarre.

[Paul Maynard]

Will my hon. Friend give way?

[Philip Davies]

If my hon. Friend does not mind, I will make some progress, because many other Members wish to speak and I want to draw my remarks to a close.

My final point is on the automatic release of offenders halfway through their sentence, which is one of the shameful things the previous Government sneaked through in the last Parliament. Prisoners are now not just eligible for release halfway through their sentence; they are automatically released. I think that that is a terrible situation. When I visited Denmark, whose criminal justice system is always seen as very liberal, I found that they do not have that system. They have the system we used to have, whereby prisoners became eligible for release halfway through their sentence. In fact, 30% of their prisoners were refused parole altogether and served the full sentence handed down by the courts, and they think that that is one of the major reasons why they had such low reoffending rates. I urge the Secretary of State not to have a system where we automatically release prisoners willy-nilly halfway through their sentence and irrespective of their behaviour in prison or their risk of reoffending. We should make proper judgments about people’s fitness for release before we agree to release them. I think that we can learn from Denmark in that regard.

--- Later in debate ---

[Paul Maynard]

I agree with my hon. Friend entirely. I have always believed there should be a strong correlation between the amount of crime being committed and the number of people being sent to prison. If one is going in one direction, I fail to understand why the other is not going in the same direction, but it is not. There are now twice as many people in prison as when Michael Howard announced that “prison works”. I therefore believe that for certain categories of prisoner it is essential to look at alternatives to custody that are robust without being harsh and that have lower reoffending rates. Indeed, the Lord Chancellor pointed out that that was one of the crucial indicators he had placed at the heart of the Ministry of Justice’s work. In my view, that means we should start to focus not only on how many people reoffend after longer sentences but at what we mean by a short sentence and what is an appropriate sentence.

I might just about agree with my hon. Friend the Member for Shipley that sentences of less than 12 months are almost decorative. People at the young offender institutions I have visited say that the most they can do is fix people’s teeth in that time, if they are lucky. Perhaps the shortest sentence should be 12 months, but that does not absolve us from trying to confront what we do in the community. I do not support the idea that anyone who is found guilty should be sent to prison, no matter what their crime. That simply is not the way to go. Within the youth justice system, there has been a 30% fall in the number of children in custodial settings without any increase in youth crime. That is an important example to which we should hold true. It is possible to reduce incarceration levels while keeping crime levels low. Once again, the two are not connected. Indeed, the Government have been able to cancel plans to build a new young offender institution at Glen Parva, thereby creating savings for the taxpayer.

My hon. Friend the Member for Shipley was rather dismissive of my participation in the 301 project. I hope he is not similarly dismissive of our participation in “No Turning Back”; indeed, perhaps he is a fellow member. I hope he shares my concern for effective financial management and good stewardship of taxpayers’ money. One of my key concerns about the approach to criminal justice that he advocates is that it pays no attention to the cost to the public purse.

I make no apology for that consideration. Only yesterday, we spent time agonising over the Welfare Reform Bill and the deeply difficult cuts that we are having to make that will affect some very vulnerable people. Those are difficult decisions, which we do not take with any great pleasure. If we give that level of scrutiny to our welfare system, I strongly believe that it is incumbent on us to look with equal forensic attention at how much we are spending on our prison and criminal justice systems.

[Philip Davies]

I asked the Ministry of Justice what was the highest number of crimes that somebody had committed while still not being sent to prison—the number of previous convictions. The answer was 578. Somebody with 578 previous convictions was not sent to prison. That was 300 for shoplifting, 131 for drunk and disorderly behaviour, 79 for public disorder, 18 for breach of bail, 14 for criminal damage, nine for assault, eight for robbery, four for possessing an offensive weapon, one for actual bodily harm and 14 others. Does my hon. Friend agree that that person should still not have been sent to prison?