Pensions (Special Rules for End of Life) Bill

Richard Fuller Excerpts

2nd reading
Friday 2nd February 2024 Commons Chamber

[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.

[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.

--- Later in debate ---

[Richard Fuller]

I am listening to my hon. Friend’s speech with great interest. He is providing a lot of detail, so I hope he will not mind my asking some specific questions. He will be aware that the Pension Protection Fund does not necessarily pay up 100% of what people would have got had their pension fund not become insolvent—and often, insolvency occurs through no action of the employees themselves, but is about how the directors of the companies made contributions. He will also be aware that shortfalls in the Pension Protection Fund are covered by a levy that is charged on other pension funds. I am almost certain that the effect of the changes—which, as my hon. Friend has rightly said, are supported generally throughout the House—will be significant, but has he made an assessment of the cost changes? Has he had any thoughts about what the implications might be for how the Pension Protection Fund might have to change its rules and/or what it might mean for the levy charged on other pension funds?

[Philip Davies]

My hon. Friend raises typically astute points that need to be considered. The short answer is yes, I have. If he will bear with me, I will come to that, because I have sought professional advice on the implications for those funds. I promise my hon. Friend that I will come to that; if he feels that I have not done so sufficiently, he can feel free to have another bash, so to speak.

Since the special rules were introduced, there have been significant advances in how the NHS treats and cares for people nearing the end of their lives, meaning that many terminally ill people now live for longer with their illness. Given the advances, the then Secretary of State for Work and Pensions announced in July 2019 that the DWP would undertake an in-depth evaluation of how the UK benefit system supports those nearing the end of their lives.

As part of that consultation, the Department sought feedback from the terminally ill, those who support them and clinicians. Much of the reasoning and findings from that report are directly applicable to the Bill.

The purpose of the evaluation was to consider the policy and implementation of the special rules relating to people defined as “terminally ill”. It aimed to take a holistic view of the support provided, and took into account direct contributions from people nearing the end of their life, who shared their first-hand experiences of accessing support via the special rules, as well as from charities and organisations supporting them. As well as receiving written evidence, the evaluation team held engagement sessions, including an event for people living with or affected by motor neurone disease; conducted telephone interviews with people nearing the end of their life; and met charities that provide support for people nearing the end of their life.

The study also took into account the views of healthcare professionals who work with and support people approaching the end of their life, through national expert palliative and end-of-life care clinical groups; and nearly 1,000 clinicians from a range of professions, in England, Scotland, Wales and Northern Ireland, also had a chance to respond through a survey. Their views should not be underestimated, as they play a large part in respect of access to financial benefits under the special rules, which is the bit I want to look at in a little more detail.

The Department’s findings agreed with the purpose of the Bill, showing that there was a consensus across all groups that the Government should extend the current six-month rule and support for the Department for Work and Pensions to adopt a 12-month end of life approach that would allow people in the final year of their life to claim under the special rules. An added benefit of the 12-month approach was that it would also bring greater consistency with the definition of “end of life” used by the NHS and right across Government.

The overwhelming evidence of medical advances in the past 30 years, since the special rules were first implemented in 1990, demonstrates that the law in its current state is no longer fit for purpose. In general, public health has changed dramatically, both with the pandemic, and with the advances in pain relief and other trial drugs that now make living with a terminal illness for longer more likely. The leaps and bounds made in both the care for terminal patients, and the identification and diagnosis of these patients, have progressed extensively. All forms of palliative care have progressed, from how people nearing the end of their life are treated and cared for, and how their conditions are managed, to how clinicians define people nearing the end of their life. That is why the questions from my hon. Friend the Member for North East Bedfordshire (Richard Fuller) are so important: it is because of these huge changes that have taken place.

New approaches in care have been developed using the Gold Standards Framework and the Daffodil standards. The “Ambitions for Palliative and End of Life care: a national framework for local action 2021-2026” NHS guidance has also led the way in reforming caring for people nearing the end of their life. The Gold Standards Framework is a registered charity and has been the UK’s leading training provider for generalist frontline staff in caring for people in the last years of life for more than 25 years. Its aim is to enable a gold standard of care for everyone with any condition, in any setting, given by any care provider, at any time in a person’s last years of life. That is focusing on the medical side of things, and this Bill hopes to provide the equivalent standard in terms of pensions. Both frameworks have been integral to the improvement in palliative care and the greater life expectancy of terminally ill patients, because with better care and treatments, the longer people will live, and hence the need for the amendment proposed by the Bill.

One of the largest issues relating to the Bill is how clinicians define who should be eligible for the special rules. The DWP survey showed a consensus across all groups that the current definition is not fit for purpose, for several reasons. Some patients who have fluctuating conditions or uncertain life expectancy found it difficult to access the special rules, as their life expectancy was indeterminable. Many conditions progress rapidly and then plateau, and some conditions do that regularly. Two groups of patients who struggle with that are motor neurone disease sufferers and cancer patients. In preparing for today’s debate, I contacted the Motor Neurone Disease Association to ask how it feels about the change and how it will affect people diagnosed with MND. I am sure everyone in the House is familiar with the “Scrap 6 Months” campaign, led jointly by the MNDA and Marie Curie, which my hon. Friend the Member for Tewkesbury (Mr Robertson) mentioned and which is supported by thousands of campaigners across the country. They told me:

“This Bill will ensure that a greater proportion of people living with MND will be”—

able to receive—

“terminal illness payments from the Pension Protection Fund and Financial Assistance Scheme...

This is important given the context of the financial impact of living with MND, especially as symptoms of the condition increase”.

So, on that basis, they very much support the Bill.

Macmillan Cancer Support plays a large part in end-of-life care and has its national call centre based in my constituency in Shipley. It told me that it was supportive of the decision to widen the criteria from six months to 12 months, ensuring that those with a terminal diagnosis have timely access to financial support when they need it most.

In some cases, the six-month rule forced clinicians and patients to have very distressing conversations about life expectancy either too early or at the wrong time for them. There are two ways in which this issue can be tackled. The first is the 12-month rule, which is where we are with the Bill, mirroring the end-of-life approach used by NHS England. The second is taking out the timescale and instead using a clinical recommendation supported by guidance, which does not have an explicit timeframe attached to it—in effect, looking at the nature of somebody’s condition.

The first option is an increase in the term of life expectancy to 12 months, which is what the Bill would do. Obviously, this approach aligns the welfare state with the work of the NHS, and so would make it easier for organisations across the UK that support people nearing the end of their lives to understand the application of the special rules, because it makes them all consistent. Clinicians have many difficult conversations when discussing end-of-life care, and this could be added into those conversations instead of being had separately, also saving the NHS time.

However, I just want to point out that any time-bound rule could be subject to the same problems, as life expectancy can fluctuate and nothing is certain—even within a year. There is therefore an argument for basing it on a clinical diagnosis, rather than a fixed term, which by definition is always going to be slightly arbitrary.

Social Security and Pensions

Richard Fuller Excerpts

Monday 6th February 2023 Commons Chamber

[Guy Opperman]

My hon. Friend is right: these are difficult times for everyone, but the Government have decided to provide the maximum amount of support to the most vulnerable. That is why we are uprating the benefits on an ongoing basis. We also provided a £37 billion cost of living support package last spring and an energy price support package last September, and in 2023-24 we will provide a package that includes uprated support for the most vulnerable and a further winter fuel payment.

The order increases the personal and standard allowance of universal credit by 10.1%. The monthly universal credit work allowance—the amount that a person can earn before their universal credit payment is affected—will also increase in April by 10.1% to £379 for those also receiving support for housing costs, and to £631 per month for those not receiving support for housing costs. The order also increases by 10.1% statutory adoption pay, statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory shared parental bereavement pay, and statutory sick pay. In addition, in April, the carer’s allowance will increase by 10.1% to £76.75 per week. Unpaid carers also have access to support through universal credit, pension credit and housing benefit, all of which include amounts for carers. For a single person, the carer’s element in universal credit will increase to £185.86 a month from April, and the carer’s premium in pension credit and other income-related benefits will increase to £42.75 a week.

[Richard Fuller (North East Bedfordshire) (Con)]

Can the Minister explain to the House—not right now, but perhaps a little later—the interaction between the changes in carer’s allowance and the number of hours that carers can work, particularly in the light of the very welcome increases in the national living wage? What has been the Government’s thinking on that in recent times?

[Guy Opperman]

My hon. Friend asks a legitimate question: how can we improve the situation for carers who wish to work more hours, long term? It would be wrong to give full disclosure of all discussions, but I will work out what I can say about that in my closing remarks, and I am happy to engage with him privately on the subject as well.

Under the benefit cap regulations, there will be an increase to the benefit cap of 10.1%. That will ensure that all households see an increase in their benefit following uprating. The national benefit cap will be £22,020 a year for couples and lone parents, and £14,753 for single people. For households living in Greater London, it will be £25,323 a year for couples and lone parents, and £16,967 for single people.

Under the Guaranteed Minimum Pensions Increase Order 2023, there will be an increase of 3% paid by occupational pension schemes, which means that that part of the GMP will increase by 3% from April 2023. The 3% cap strikes a balance, I suggest, between providing members with some protection against inflation and not increasing scheme costs beyond what can be afforded. I commend the regulations to the House.

Pensions Dashboards (Prohibition of Indemnification) Bill

Richard Fuller Excerpts

3rd reading
Friday 20th January 2023 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

As is often the case in these debates, one prepares a long speech, only to be told to hurry up and only speak for a couple of minutes—hon. Members may have heard that from me during our last Bill debate. I will take this opportunity to ask the Minister some questions that I hope will be helpful, and to make a broader general point to the House.

As other hon. Members have said, the underlying change regarding pensions dashboards regulations that this Bill, skilfully introduced by my hon. Friend the Member for Cheadle (Mary Robinson), seeks to make is to improve a commonplace problem for many pensions, which is that we do not know where our pensions are. They are very hard to track, which leads to all sorts of unintended consequences: indeed, the Pensions Policy Institute has estimated that 1.6 million pensions with a total assessed value of £19.4 billion have been lost. I do not know whether that is a number that the Minister recognises, but my hon. Friend is absolutely right to bring the Bill forward as an additional measure of consumer or pensioner protection.

Could the Minister clarify the stage at which penalties will be levied? Is it on advisement that a pension provider has done wrong? Will it be after a warning, or after egregious ignorance of warnings by a provider? I think that clarity would be helpful. Will it be in the public domain that a penalty has been levied, similar to the national living wage regulations? It is an important question, because there is a significant imbalance in knowledge between fund operators and pension holders.

What assessment has taken place of levying fines on those with professional qualifications, and the ability of professional standards bodies to operate assessments? Clearly, integrity is a crucial characteristic when managing people’s pensions. When it comes to levying fines against an individual—I understand that fines can be levied against both an institution and an individual—have we investigated the implications carefully enough? Have the Government liaised with professional standards bodies to ensure that if someone is fined, it does not unduly limit their ability to continue to operate? Who will levy and assess the fine: the regulator or the courts? I believe the Minister will say that it will be the regulator, but perhaps she could confirm that.

That point brings me to a more general one about the House’s oversight of regulators. In this instance it is the Pensions Regulator, but we also have Ofgem, Ofwat and the FCA. We assume that providing powers to a regulator means that everything will work wonderfully well, but frequently it does not. There is a significant gap in the oversight of many of our regulators in the UK. It affects the operations of this Parliament, and it needs addressing urgently. For example, when the Financial Services and Markets Bill was going through this House, I sought amendments to ensure that the FCA met certain performance indicators as a requirement for providing services to participants, because without them our competitiveness is hurt.

Another example is Ofgem’s decisions about who can participate in the energy market or how on earth to handle the price cap through 2020-21. Those are serious questions and serious decisions, but where is the accountability? I am not sure that the current structure, in which we rely on Select Committees, is sufficient. Without getting into the general point, perhaps the Minister might find time to say whether she is happy about the ability of the Work and Pensions Committee to fulfil its duties with respect to oversight of the Pensions Regulator.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call the shadow Minister.

Health and Social Care Levy (Repeal) Bill

Richard Fuller Excerpts

Committee stage
Tuesday 11th October 2022 Commons Chamber

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

I rise to support new clauses 1 and 2, and I suspect we will soon vote on new clause 1. Let us be clear: the economic issues we are now facing—rising interest rates for homeowners, and a crashing of confidence in the British economy—are partly because the Government will not produce proper, transparent plans about how they are managing tax and spend.

New clause 1 would force the Government to publish proper documentation on how they will manage that expenditure. We cannot scrimp and save any more on social care, and while it is right to reverse this tax, which was pernicious and hurt the poorest the most, the Government’s failure to outline how they will raise the revenue and properly spend it will cause more chaos and more lack of confidence in the Government. It will contribute to the ongoing crisis in interest rates, and it will end up hurting hard-working people in this country again. Although the reversal of this tax is welcome, without proper analysis the danger is that people in this country will still pay, but they will be paying not through tax to the Government, but through pernicious interest rate rises to lenders and banks. That would be worse than the current situation.

Social care needs to be funded. Brighton and Hove City Council spends £154 million a year on adult social care. That is care for older and disabled people—social care in all its forms. It only raises £160 million through council tax and the precept, so it has only £10 million discretionary funding, although of course it gets grants for schools and other non-discretionary funds. That is the same up and down the country. It is no good just finding Treasury money to support an expanding need for social care; it is a scandal that any penny of council tax is going on adult social care at all. No voter I ever speak to thinks it is appropriate for council tax to be spent on adult social care. Council tax should be for council services, universal services, and ensuring that our local areas are better, more prosperous and thriving. Every person I speak to thinks that social care should be centrally financed. Yes, councils should deliver it, just as they do with education and other services, but the grant must be fully funded by the Government. That the Government have not outlined how they will do that, or have even a long-term plan to do that, continues the pressure and burden on councils and is wrong.

Not only is it wrong, but there is another way of doing it. That is why new clause 2 is so important. It starts to set out the alternatives, and my hon. Friend the Member for Leeds East (Richard Burgon) stated that we should be looking at taxing income from wealth. It is a scandal that generations after generations have squirreled away wealth, hiding it away like Monopoly money on a Monopoly board, and they are then able to generate money from doing almost diddly squat. That is wrong when hard-working people are toiling and paying a higher rate.

There are other ways that the tax could be raised, such as abolishing the upper earnings limit and the scandal of people who earn more than £50,000 paying only 3.25%—less once the levy is abolished—on national insurance. That rich people pay less national insurance as a percentage of income than poorer people is a national scandal. Rather than a progressive tax, it is an innately regressive tax. The poorer someone is, the more they pay; the richer they are, the less they pay as a percentage. If that was abolished and we had a flat tax for everyone, that would have raised £10 billion more than this failed tax U-turn. The Government would have been able to fund all they wanted. It would have been fair, and it would not have hit poorer people. There were many alternatives and the Government did not pursue any of them.

Last week I visited my local A&E at Royal Sussex County Hospital. Fantastic nurses and doctors were working their socks off, and the management were trying to cope with reducing resources. What did I see? Tens of people in beds in corridors, and more than 30 people in waiting chairs, waiting not to be treated in A&E but to be moved on to adult social care or other wards in the hospital. One person had waited for 23 hours, and another who had been discharged the day before had been waiting in A&E for four days. Why is that? It is because our social care system is failing. People are leaving in droves because there are no national terms and conditions and no decent pay. It is a disgrace that care workers earn less than £10 an hour in Brighton and across the UK. They are on poverty wages yet they do such important work.

We need a proper plan for how social care will be paid for. It is no good for the Government to remove this pernicious tax and then come forward with no plans, no ideas, no nothing. This Government have run out of ideas, and Conservative Members have run out of a future for this country. All they are in now is a quick “grab as much as they can” in the next two years, before they lose the election. It is not right for this country. We need them to move aside because Labour has the ideas. Labour has the plan for adult social care, and for everything.

[Richard Fuller]

New clause 1 was tabled by the hon. Member for Ealing North (James Murray), and he raised two specific points. One was on the direct cost that HMRC will incur as a result of this Bill, and he is right; there will be some additional costs. It costs to make these changes, and there will also be costs in future months from additional calls that may come into HMRC. Those numbers have not yet been fully quantified, but I will write to the hon. Gentleman with those costs when we have them. I do not think this was the intent of his question, but on the changes to dividend tax rates, the 1.25% cut will be implemented from April 2023 and is not taking place this year.

Overall funding for health and social care services will be maintained at the same level as if the levy was in place, and we will do that without the tax increase. The Chancellor and the Government are committed to fiscal sustainability, ensuring that debt to GDP falls over the medium term, and the Chancellor will set out further details in his medium-term fiscal plan on 31 October. Strong growth and sustainable public finances go hand in hand, and maintaining fiscal discipline over the medium term will provide the confidence and stability to underpin long-run growth. In turn, faster growth can promote confidence in the UK economy and lead to higher tax revenues without the need to raise levels of taxation. That broader context of the medium-term fiscal plan in the round is the right way to assess these changes, not via the specific measures in new clause 1. I therefore urge the House to reject the new clause.

I will make a point to my hon. Friend the Member for Winchester (Steve Brine), who rightly spoke about the importance of prevention. To reassure him, the Department’s spending review settlement provided £2.3 billion over the spending period to transform diagnostic services and funding to enable local authorities to invest further in prevention through the public health grant.

I turn to new clause 2, tabled by the hon. Member for Leeds East (Richard Burgon) and supported by the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle), who I was interested to hear advocating flat taxes—I look forward to further discussions with him about the merits of flat tax rates. There are key differences between the tax bases of earned income, capital gains and unearned income such as dividends. For example, employers also pay national insurance contributions on employment earnings, which broadens the base of revenue from national insurance contributions across employers, employees and the self-employed. In practice, if the taxation of dividends and capital gains were aligned with the taxation of earnings, we could expect to raise less than the levy was forecast to do due to the size of the tax bases and the significant behavioural responses by both tax bases. One of the key points that the hon. Member for Leeds East misses is such behavioural changes when we seek to change certain taxes in a significant way.

Unlike the Opposition, the Government are committed to lowering taxes, not raising them. We have already committed to reversing the 1.25 percentage point increase in dividend tax from April 2023, as I said, to drive growth and investment, and the Chancellor of the Exchequer will publish the medium-term fiscal plan on 31 October. I therefore urge the House to reject new clause 2. With thanks to those hon. Members for tabling their new clauses, I hope that they are satisfied with my explanations and that the hon. Member for Ealing North will not press his new clause to a Division.

Question put, That the clause be read a Second time.

Oral Answers to Questions

Richard Fuller Excerpts

Monday 13th September 2021 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

T7. Despite the Government’s best efforts, many freelance and self-employed people in my constituency and throughout the country had a very tough time during the covid restrictions. Within the remit of her own departmental responsibilities, but also in her discussions in the Cabinet, what is my right hon. Friend doing to encourage people to take that extra risk in pursuing a future means of access to work by becoming self-employed?

[The Parliamentary Under-Secretary of State for Work and Pensions (Mims Davies)]

My hon. Friend will be pleased to know that we are currently working across Government to understand local labour market needs and opportunities, and to understand how best to support those who wish to enter self-employment and be self-supporting and, above all, self-starting. We have learned from the new enterprise allowance and we also understand the impacts of covid, and we are working on all that right now.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (First sitting)

Richard Fuller Excerpts

Committee stage
Tuesday 15th June 2021 Public Bill Committees

[The Chair]

Thank you. I call Richard Fuller, who has five minutes. I remind hon. Members please to keep their questions within the scope of the Bill.

[Richard Fuller (North East Bedfordshire) (Con)]

Q Thank you, Ms Ghani. I will stay within the scope of the Bill. I have two questions about the impact of the Bill on established principles of caveat emptor and the expectation that it might have in terms of greater socialisation of losses from decisions that people make. First, Mr Darbyshire from the FSCS, in what way might the provisions of the Bill have an impact on that message that individual consumers who purchase financial products should understand that they are primarily the ones who bear responsibility? Will the Government’s provisions in the Bill affect that in any way?

James Darbyshire: That really is a question of judgment for the Government and Parliament in relation to the impact on the Bill. The FSCS’s role is simply to administer the Government’s redress scheme as efficiently and effectively as possible. We are committed to paying compensation to eligible investors within six months of the scheme going live.

[Richard Fuller]

Q I have just one further question on that. I understand that the change is yours to implement, but from your experience over the years, have you seen any change in expectations?

James Darbyshire: The balance between consumer protection and consumer responsibility is a delicate one. Ultimately, that is a policy question that has to come from the Government and through the FCA. In our role, we are focused on ensuring that consumers can make decisions in a way that they are as informed as possible about whether there is FSCS protection for particular products. That is critical to the way they make decisions. For example, at the moment we have a comms campaign about pensions and investments, to make sure that consumers are checking whether they are covered when they make those decisions.

[Richard Fuller]

Q Thank you. The second part I would like to direct to Ms Howard. From the FCA’s point of view, in terms of improving processes for the regulation of firms, does the Bill—another way of the Government stepping in to compensate the losses—have any impact on the imperative at the FCA to regulate firms as effectively as possible, knowing that, ultimately, the Government will step in if there is an error in your regulatory policies?

Sheree Howard: I will pass that on to Robin, if I may.

Robin Jones: Of course. The first thing to say is no, the Government stepping in in this particular scenario most certainly does not affect the FCA’s commitment to effective regulation, and to making the changes that Sheree set out. As the Government have already noted and the Economic Secretary to the Treasury has highlighted, this is only the third time that such a scheme has been set up in the recent past. It is exceptional and unique. We are not expecting it to be happening on a regular basis.

At the FCA we have accepted all the recommendations of Dame Elizabeth’s report, and Raj Parker’s report into Connaught. We are now taking a number of steps to respond to that. We have steps that we are taking this year. As we have highlighted, our new chief executive, Nikhil Rathi, has a significant transformation programme in place and has brought in a range of external executive directors to lead that change and to bring an operational excellence focus to the changes that are needed in the organisation. I do not see this scheme and the Government stepping in, in unique and exceptional circumstances, as creating any risk of diverting our focus.

[The Chair]

Thank you. I call Gareth Thomas—you have six minutes.

--- Later in debate ---

[Richard Fuller]

Q Thank you, Ms Ghani. Mr Taylor, this Bill arises in large part because of an acceptance of some regulatory shortcomings as they applied to a particular firm and, in part, it results in an expectation, as you have just said, of a maximum levy on other firms in the industry that have operated fairly, ethically and well. Do you think that that is the right solution to the identified problem or is it just a necessary requirement as a result of the problem?

David Taylor: Like a number of other systems, the Fraud Compensation Fund was set up to be an industry-funded system. Our role in this is simply to administer that system and it has become apparent that, in order to deal with the cases that are eligible, more money will be needed. As I understand it, the plan is to maintain the system of industry funding and the Government will be consulting in the autumn on any changes to the levy rates.

[Richard Fuller]

Q Administering yes, but I think you also have discretion to decide at what level you charge the levy.

David Taylor: Yes, that is true.

[Richard Fuller]

Q The explanatory notes to the Bill say:

“The FCF is funded by a levy on eligible pension schemes and at the time of the judgment had assets of £26.2m. Even with future levy income, the expectation is that there will be unfunded liabilities in the region of £200m to £250m.”

Is it your expectation that the Government’s consultation later in the year will be about resolving that funding shortfall or that, with current resources, over an acceptable horizon, that funding shortfall can be reduced?

David Taylor: I will pick up on a couple of points there. To go back to the question of how big the shortfall is, as I said earlier, those numbers are based on our best current estimate of the claims that will come in. As for how that shortfall is then funded, the loan that we are talking about and that the legislation enables will effectively resolve the cash-flow issue while we make the payments. As I understand it, the plan is that it will be reimbursed through the fraud compensation levy. In terms of what the levy is, there is a balance to be struck between the level at which the levy is set and the period over which we are required to pay the money back to Government.

[The Chair]

I call Mr Gareth Thomas.

Oral Answers to Questions

Richard Fuller Excerpts

Monday 8th March 2021 Commons Chamber

The Secretary of State was asked—

[Richard Fuller (North East Bedfordshire) (Con)]

What assessment she has made of the effect of the removal of the requirement that kickstart applicants bid to deliver a minimum of 30 jobs on the accessibility of that scheme to a wider range of employers.

[Peter Gibson (Darlington) (Con)]

What assessment she has made of the effect of the removal of the requirement that kickstart applicants bid to deliver a minimum of 30 jobs on the accessibility of that scheme to a wider range of employers.

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

I am pleased to update the House that, after removing the threshold last month and allowing direct applications for any number of roles, we saw an increase of 3,000 employer applications throughout February, which is a jump of 75%. There will continue to be an important role for gateways as we progress to our ambition of 250,000 kickstart jobs, which we are well on the way to achieving, with almost 150,000 roles approved, more than 4,000 young people having started their roles and another 30,000 vacancies live right now.

[Richard Fuller]

I thank my right hon. Friend for her answer. Given the large number of small and medium-sized enterprises across the county, jobcentres in Bedfordshire, including the one in Biggleswade in my constituency, are raring to go to enable small businesses to take advantage of this change in Government policy. Can she advise me what she is doing to ensure that those small businesses are aware of the scheme and its benefits?

Statutory Sick Pay and Protection for Workers

Richard Fuller Excerpts

Wednesday 18th March 2020 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

I thank the Labour party for devoting some of its Opposition time to allow us all to discuss this serious, pertinent, timely and important issue, given the uncertainty facing many of our constituents across the UK.

With your forbearance, Madam Deputy Speaker, I stress at the outset for anybody watching that people should follow the advice of their local health authorities, such as NHS Scotland or Public Health England. Regular updates are coming from the Governments across the isles. I recommend that, as best as possible, employees and employers follow the available guidance.

I commend everyone leading the response to the situation, including NHS staff, other emergency services, local authorities, the voluntary sector and Governments across the isles, who have been working together as best as possible to ensure that the best advice, based on science, and the best support is available at the right time. I particularly praise Professor Jason Leitch, a former dux of Airdrie Academy in my constituency and the Scottish Government’s national clinical director. Alongside the Scottish Health Secretary Jeane Freeman and the First Minister Nicola Sturgeon, he has been the model of calm, erudite leadership.

In the spirit of cross-party co-operation that we have seen emerge at Holyrood, I, too, have no desire to be political or criticise where working constructively can bring about better outcomes and engender greater confidence in the response of all Governments to the crisis. When I call for further action, therefore, it is not because I think the UK Government are deliberately holding back. I believe there is a genuine desire across all Governments to do the right thing at the right time.

The concerns that remain in large sections of society regarding the UK Government’s economic response to covid-19 essentially boil down to ensuring that incomes are protected when demand falls in huge sections of the economy. Renters, the self-employed, small business owners and people who are in or out of work just want to know that they will get the financial support they need to survive.

Constituents who are self-employed, such as taxi drivers, driving instructors, childcare providers and many more, have contacted me because they are worried about making sure that they do the right thing at the right time, while providing for their families and employees. My right hon. Friend the Member for Ross, Skye and Lochaber (Ian Blackford) and the shadow Health Secretary, the hon. Member for Leicester South (Jonathan Ashworth), have led calls for statutory sick pay arrangements to be improved to help workers who contract covid-19 or who have to self-isolate.

Although we welcome the UK Government’s move to make sick pay kick in from day one, and for the cost of sick pay to be met by them for companies with fewer than 250 staff for a period of 14 days, there is still more to do to support workers and businesses. Statutory sick pay is a reserved matter, as is employment law, so those areas are required to be decided upon here.

My right hon. Friend compared statutory sick pay rates in the UK with the rates of our European neighbours. As the House will be aware, that is not currently a favourable comparison for the UK Government. The UK rate is currently £94.25 a week—the second lowest rate when compared with EU nations. Ireland doubled its rate to £266 in response to covid-19, while Germany and Austria both pay £287 a week. At £94.25 a week, the UK Government are presiding over a system of poverty pay for those who are sick. One Tory MP was asked on Twitter whether she could live on £94.25 per week, and she simply responded “Get a life”.

This is really serious. We are asking people, even if they have mild symptoms, to self-isolate for the greater good, to contain and delay the spread of covid-19. We must be sympathetic with constituents who are asking legitimate questions about the advice and support they are getting. Statutory sick pay is an issue that should have been resolved before now, frankly. In response to this situation, the UK Government must act quickly.

At the Work and Pensions Committee hearing this morning, there was consensus among the witnesses that statutory sick pay should be raised. Citizens Advice is asking for it to go up to £180 per week. Scope is asking for it to be the equivalent of the national minimum wage. Others have said that the equivalent of the real living wage would be more appropriate, and Scandinavian countries are making it 100% of wages. The UK Government must act.

Alongside the rate of statutory sick pay, there are other specific areas where we want to see action from the UK Government.

[Richard Fuller (North East Bedfordshire) (Con)]

Just for clarification, is the hon. Gentleman asking for a permanent change in Government policy on statutory sick pay, or a temporary change for this period?

[Neil Gray]

We have to reflect on the fact that, even not at times of crisis, UK statutory sick pay rate is considerably lower than that of other European nations. A permanent change is required, but a temporary measure which might go beyond that permanent increase is required to deal with covid-19, so the answer is both, if that makes sense.

The Government must extend the policy further to ensure that sick pay is set at an hourly rate and available for everyone for 52 weeks instead of 28. Current rules on statutory sick pay are not flexible enough to meet real-life needs and fall far short of meeting a dignified standard of living, even with this new change. Disability groups have been especially vocal in calling for an overhaul of the sick pay system. Their concerns must be factored into the UK Government’s response to the sick pay consultation.

The UK Government should accept the TUC’s recommendations on sick pay for all. Those include abolishing the lower earnings limit, which would extend coverage to almost 2 million additional workers; permanently removing the waiting period for sick pay; increasing the weekly level of sick pay from £94 to the equivalent of a week’s pay at the real living wage; permanently agreeing that the legal requirement on fit notes after seven days of absence be extended to 14 days, with employers accepting self-certification for anything less than that; and permanently providing funds to ensure that employers can afford to pay sick pay.

The UK Government must do all they can to support businesses, to ensure that jobs are kept for the duration of this crisis. I would like to see the UK Government provide much greater grants, rather than loans, to help all businesses stay afloat, and attach conditions about ensuring that jobs are protected. We have seen that type of initiative in Denmark, and I hope the UK will follow.

Clearly, we all hope that these issues are temporary. The UK Government must do all they can to ensure that the attachment between employer and employee is not detached. That is important for workers, employers and the wider economy. Yesterday, Robert Chote, the chair of the Office for Budget Responsibility, urged the UK Government not to be “squeamish” about spending whatever it takes to prevent mass foreclosures, bankruptcies and millions of job losses as the UK effectively goes into lockdown. He said:

“When the fire is large enough you just spray the water and worry about it later.”

I turn to measures to support people who are self-employed and other business owners. The UK Government must do more. I echo the calls from my hon. Friend the Member for Glasgow Central (Alison Thewliss) last night. We must protect the incomes of people who are self-employed and do so quickly, to give them confidence. She was also right to raise issues around maternity leave, parental leave and support for people with no recourse to public funds; they are extremely vulnerable at the best of times, but right now they must be supported. The UK Government must give information to the devolved Governments as quickly as possible, and encourage much greater information sharing to allow all Governments to act swiftly and appropriately. At Prime Minister’s questions, my right hon. Friend the Member for Ross, Skye and Lochaber raised the prospect of some form of minimum income guarantee, such as a universal basic income. The Prime Minister appeared to accept the general premise, but time is now of the essence. Can the Minister give an idea of when he expects some form of announcement on people receiving financial support?

The UK Government should consider whether they will extend the normal deadlines for people to provide the necessary information to support social security applications, while paying people much more quickly as the demand is likely to be much greater. There is clearly a need to go further on social security. Ministers have heard me discuss the various issues that there are routinely with universal credit. The changes I want to universal credit, although they would undoubtedly help in this crisis, may not be practically achievable in a useful timescale—I am talking about scrapping the five-week wait, the two-child cap and increasing work allowances.

Instead, for the duration of this crisis, the UK Government need to ensure that those who are in or out of employment, those who are employed or self-employed, are paid an amount that allows them to get through. Universal credit advances, for instance, should now come in the form of a grant, not a loan. The Government should also look at urgently suspending the tax credit income disregard for reductions in earnings, at least for the 2020-21 financial year, to ensure that, where earnings fall, household tax credits entitlement takes account of that loss.

We now know that schools in Scotland and Wales are to close at the end of this week. That puts huge pressure on families who rely on free school meals, so I urge the UK Government to look at this area, as pressures are going to be on those families for the duration of the school closures.

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[Richard Fuller (North East Bedfordshire) (Con)]

I am grateful to you for allowing me to speak, Madam Deputy Speaker, and I apologise to the hon. Member for Wirral West (Margaret Greenwood) that I was not in the Chamber for the first part of her speech. I wanted to listen and make a contribution, and I appreciate the opportunity to do so.

I thank the Opposition for holding this debate, which covers two of the things that are on most people’s minds: reducing the likelihood that I, anyone in my family or anyone I work with will get sick, and providing protection for me if that does happen; and trying to protect my job over the next few weeks and as we recover. The debate has raised a number of issues. I am not going to pick out any particular ones, but I want to make some observations.

The first is what a difference a week has made. It is seven days since the Budget, and these are very different circumstances. We should give credit for all the efforts made in this House and for the measures that the Government have taken to respond as quickly as they can on such a wide range of issues. None of us in this room has the power of the Almighty, and we should understand that we work within human frailties. I will come back to the frailties of the systems that we work within.

Secondly, I would like to add to some of the examples given by the hon. Member for Airdrie and Shotts (Neil Gray) about the public’s response. This week, I have met churches that are working on good neighbourhood schemes. I spoke today with a playwright in the village of Arlesey who is setting up a group to bring skills together in the community, to assist people. We are seeing the best of people, but as some Members have said, we are also seeing the worst of people. In a free society, we can see the best, but we can frequently see the worst. Harley Street doctors are reselling tests at a high price that will not be available to everyone. That is a disgraceful thing for anyone with a professional qualification to do. We have seen pictures of hoarders in shops, meaning that elderly and vulnerable constituents of mine—and, I am sure, of all Members—are not able to access the foodstuffs and other products they need. We have seen the reaction of the bosses of some of the largest companies.

[Wendy Chamberlain (North East Fife) (LD)]

On that point, I have been contacted by a constituent who has informed me that their employer is insisting that they cannot work from home because it is waiting for stronger guidance from the Government. Can the Government give clear guidance right now to my constituent’s employer and many others across the country that, if people can work from home, they must?

[Richard Fuller]

I appreciate the hon. Lady’s intervention. I am not speaking for the Government—I am sure the Minister will seek to address that—but I have to say that it sounds to me as though her constituent’s employer is just making an excuse, because the Government have been absolutely clear that it is the right thing to do socially for everyone in this country, if they have a concern, to be able to isolate themselves from others and to work from home. What more does that person need to understand what they should do? I hope they will get that message very clearly from the Front Bench.

On the point of leaders not doing the right thing, the experience of Virgin airlines has been raised. The owner or partial owner of Virgin airlines has suggested that employees should take eight weeks of unpaid leave, and I decided to look at how much that would cost. Eight weeks at the £94.25 rate of statutory sick pay would cost £754 per employee. There are 8,571 employees of Virgin airlines, so if all of them took eight weeks of unpaid leave, that would be a cost of £6.4 million. Sir Richard Branson’s net worth is $3.8 billion. If he is able to get 2% interest on that money for eight weeks, he will earn the equivalent of £9.9 million. So I say: Sir Richard Branson, give up the interest on your wealth for eight weeks, and pay your employees yourself their unpaid leave.

Big or small—a leader of a church in a small village or a leader of the large business—when it comes to looking at the protection of their workers, the time is now, and we will judge them all by their actions. It will be the same for the Government’s actions.

As I say, are we choosing the right policies? We have heard a lot about that today. I congratulate the Government on the staging of the announcements. There is so much pressure—all MPs are under pressure, with loads of questions: small or micro ones, and very large ones covering many issues—but I think the staging of announcements is a good approach, because we need this to bed in with people each day. If we put everything into an announcement on a single day, I would worry that, although we would feel we were communicating, we would find that it was not being received and understood as clearly as it should be.

[Neil Gray]

I commend the hon. Member’s speech thus far. To some extent I agree that, for preparedness in working through particular policies or interventions, there has to be some preparation and that does take time. However, in terms of people’s livelihoods, people are losing their jobs now and businesses are making decisions about their future viability now, so would he encourage the Government, as I have, to make an announcement about the financial impetus that could be given to protect individuals and jobs in hours, not days, so that this response can be adequate?

[Richard Fuller]

Yes, yes, yes, yes and yes. Those yeses are for each of the businesses in my constituency that I have spoken to in the last 24 hours that have asked for precisely that. We often think: how can a business suddenly be short of money to pay its own workers within a short period of time? But the truth is that, in some sectors, cash flow is of a nature that those issues do come up. More importantly, I say to those on my Front Bench that every single responsible private sector business right now will be thinking, first and foremost, “How can I protect cash flow for the long-term survival of my business?” One of the nearest short-term costs that can be reduced is their employee cost, so there is the sense that this is needed, as the hon. Member rightly says, in hours rather than days. To be fair, I think the Chancellor was very aware of that in his statement yesterday.

To that end, may I encourage hon. Members on both sides—there are slightly more on the Opposition Benches than on the Government Benches for certain reasons—to think more about using what is already in place, such as the systems that connect what the Government can do to those institutions and people that need it, rather than trying to broaden it out into a big and different debate about whether we should have this or that. There is of course a time for debating universal income, and there is time for us to think about ways in which we might look at a better overall system in the future.

Right now, I say to my right hon and hon. Friends on the Front Bench that we should be looking at proposals using the existing arteries of the financial system, of the benefits system and of the pay-as-you-earn and tax system that can reach people, either to amplify payments that are already made or to reverse flows from into the Government to back out to those who need them, and I ask them not to get too distracted by items along the way.

We should also recognise that in this period there will be a test for the labour market structure in the United Kingdom. The UK does have some not quite unique but nuanced features, particularly its reliance on flexible working and on self-employment. The changes that Governments have put in over the past 15 years to create a flexible market—there are benefits to that—will also be tested during this pause in the economy. After we have gone through this crisis, I would encourage the Government to see what lessons can be learnt from that.

This is also a test in terms of the enlightenment we have in our social insurance system. I was moved by the contributions from the hon. Member for Leeds West (Rachel Reeves), the Chair of the Business, Energy and Industrial Strategy Committee, and the hon. Member for Ilford North (Wes Streeting). It is absolutely right that this is an opportunity for us to look at those things and to reflect. We may have different perspectives on it, and we will definitely have different politics, but only a fool would say that we should not look at this and learn lessons. This is no time for fools.

My core message for the Government is this: the staging of announcements is absolutely right, so that they can bed in with people; use the systems we have to get money into the hands of the people and businesses who need it; and follow the advice from both sides of the House, which is that we would welcome the Government’s moving with speed between the announcement and the time that the money is available in the bank manager’s office in Arlesey, Bolnhurst or anywhere else in the country, or in that person’s pay packet, their bank account, or their benefits slip.

AEA Pension Scheme

Richard Fuller Excerpts

Wednesday 26th October 2016 Westminster Hall

[Sir Oliver Letwin]

I agree that there was probably a subtle incentive, but I will come on to that in more detail in a moment. At this stage of the argument, all I am saying is something that I think is unchallengeably certain: the Government Actuary’s Department gave advice that did not bring to light the material difference in risk between one situation and another. That is fact. Beyond that, one can speculate, but that is fact.

When I say that the Government Actuary’s Department had a duty to highlight that difference of risk, I am again not speculating. Although at the time it did not exist, the Government Actuary’s Department now has a statement of practice. I have a copy of it in my hands. Under the heading “Security”, the statement of practice—essentially a code of conduct—says:

“It is recognised that the security of a private sector scheme cannot be provided in the same form as that applying in the public service”.

It is practically impossible to imagine that the Government Actuary’s Department would offer advice now in the form it did then, because it would be guided by its own code of practice. If it were not, I imagine rapid action would be taken to correct it, because if a Government Department issued a code of practice and then did not follow it, that would lead a Minister quickly to do something. Therefore we know that the Government Actuary’s Department had a duty, which unfortunately was not at that time written down in the code of practice, that it did not observe to bring to light the difference in security between the two positions. It did not do that.

It is important to make one last point about what the Government Actuary’s Department did. A freedom of information request has revealed an interesting sequence of events about which I intend in due course to write a little monograph, because it is very instructive about what happens inside Government and agencies when they engage in commercial transactions. The FOI revealed that there were exchanges of drafts between the Government Actuary’s Department, UKAEA and AEA Technology. The drafts went back and forth, and the various parties commented.

When the draft of the very section to which I am referring, which was at that time labelled 3.1.1 instead of 3.2.3—I will come on to that point, but it is ipsissima verba—was sent to AEA Technology, the person looking at it from AEA Technology noted in handwriting, “Delete”. So even an observation that it was possible the AEA Technology scheme might conceivably go bust, or that the UKAEA scheme might not deliver, was objected to by AEA Technology. It tried to get that deleted. To be fair to the UKAEA people and the Department then in charge of them, which is effectively now the Department for Business, Energy and Industrial Strategy, that did not get deleted.

I mentioned, however, the numbering, which is also instructive. Section 3.1.1 became section 3.2.3 because UKAEA supported the AEAT proposition that the advantages of preserving—in other words, staying in the public sector—should not be presented before the advantages of transferring, as it was in the original draft, but vice versa. Indeed, that change was made. That whole sequence of events illustrates very clearly that AEA Technology and UKAEA had a joint interest in trying to get as many pensioners as possible to transfer into the AEA Technology scheme—not because they were evil schemers, but because they wanted that scheme to be viable. They were putting as much pressure as they could on the Government Actuary’s Department, to get as close as they could get it to go to telling the pensioners that that was a good thing to do.

To be fair to the Government Actuary’s Department, it did not say that that was a good thing to do, but it also did not illustrate the fact that if we looked at the risks, it was a very bad thing to do. That is a very important point. The Government Actuary’s Department did not just fail to point out the risks; it failed to point out the risks under conditions in which some pressure upon it was being brought not to reveal those risks in full.

I want to make one last point about the advice from the Government Actuary’s Department before I move on to the law. The role of the Government Actuary’s Department, which comes out clearly in the whole of its advice, was to look at the benefits of the two possibilities—remaining or transferring the accrued rights—and to see whether, on an actuarial basis, one was superior to the other or the other to the one. The Government Actuary’s Department concluded that there was not really anything to choose between them. That was translated into the view that all in all, the benefits were as good in the one case as the other. Of course, for a particular individual—this was pointed out—it might be different, but by and large, people got the same kind of benefit in the two cases.

We have the word of the Government Actuary’s Department that there would be no financial difference for pensioners, by and large, whether they stayed or went to the AEAT scheme—except, of course, that there was a huge difference. In the one case, they were getting the same benefits guaranteed, and in the other case they were getting the same benefits not guaranteed, because they were supported only by a commercial firm that could have gone bust and did go bust, and whose pension fund could have been in deficit and was in deficit—and lo and behold, they have indeed suffered.

Under pressure from those responsible for the transaction, the Government Actuary’s Department assessed the two schemes as being of equal value to employees without taking account of the difference in risk. It failed to point out that difference and therefore led the pensioners to believe that there was nothing particularly wrong with transferring their accrued rights to the AEAT scheme. They could have had the benefits guaranteed permanently had they remained in the UKAEA scheme, but they did not ever realise that great difference in risk.

[Richard Fuller (Bedford) (Con)]

My right hon. Friend has pointed to advice from the Government Actuary’s Department about a privatisation. There was a period when many other Government businesses were being privatised. Has his research identified whether the advice was similar in other cases, or was this piece of advice unique to the circumstances of AEA Technology?

[Sir Oliver Letwin]

I do not know whether my hon. Friend brilliantly waited until this moment to ask that pertinent question, but he has asked exactly the right question at exactly the right moment. It was generally the case that undertakings were given—I was involved as a financial adviser in many privatisations—about the solidity of the pension scheme that was going to be available for pensioners if they transferred to the new undertaking. I strongly suspect, although I cannot prove, that many of the AEA Technology pensioners who later suffered imagined at the time, not least because the Government Actuary’s Department did not say anything about a difference of risk, that such undertakings were available.

Moreover, the pensioners were probably led to have greater faith by the accident that the provisions of the law that gave rise to the transfer of the undertaking suggested—although did not say, if we read them carefully —that it would be just as good a pension scheme as the one they were leaving. In fact, in this case there were no such undertakings, and therefore there was a difference between this and many other privatisations. That was never brought out in the documentation, and the Government Actuary’s Department did not refer to it. That further strengthens, to my mind, the point that the Government Actuary’s Department advice served to mislead the pensioners.

I apologise, Ms Dorries, for the fact that that was all just the shaggy dog story, and now I am coming to the actual point of the debate. Everything I have described is a series of allegations by a Back-Bench MP—namely me—about what I think the Government Actuary’s Department did, and who the hell cares whether a Back- Bench MP thinks the Government Actuary’s Department behaved well, badly or indifferently? There is another body that judges these things that is much more important than a Back-Bench MP for these purposes, and that is the Parliamentary and Health Service Ombudsman. That body gets to judge whether a Government agency—the Government Actuary’s Department is certainly one of those—has acted in such a way as to maladminister. That is the task of the ombudsman.

It is well established in the case law surrounding the ombudsman that if a Government Department misleads people, that is a form of maladministration, and if it causes them loss, that is a form of maladministration that the ombudsman can rule requires remedy. That is a perfectly well established chain of thought. We might think, therefore, that the Parliamentary and Health Service Ombudsman would be able to rule on whether I am right in asserting that the Government Actuary’s Department misled these pensioners and therefore engaged in an act of maladministration.

If we look at the Parliamentary Commissioner Act 1967—although it has often been amended since—and its original description of what the ombudsman should do, our heart lifts to begin with, because section 4 says clearly that the Act applies to

“government departments, corporations and unincorporated bodies”

listed in schedule 2. If we turn to schedule 2 of the Act, lo and behold, one of the bodies listed is none other than our friend the Government Actuary’s Department. We might therefore think that we do not need to speculate about this; we just need to write a letter—I have written letters, as a matter of fact—to the Parliamentary and Health Service Ombudsman to ask it to investigate the Government Actuary’s Department action in this case.

Alas, it ain’t so, because schedule 2 is subject to the notes to schedule 2, and in those notes—I do not know how this happened—the Government Actuary’s Department is specifically included in the purview of the ombudsman only

“relating to the exercise of functions under—

(a) Part 2 of the Insurance Companies Act 1982, or

(b) any other enactment relating to the regulation of insurance companies within the meaning of that Act.”

I will not trouble the Chamber with what goes on in the Insurance Companies Act 1982, but I assure hon. Members that I have been through it—it is incredibly boring—and there is absolutely nothing that would in any way enable the ombudsman to look at the Government Actuary’s Department’s action in this case.

I imagine that the underlying purpose of that massive exclusion was that someone at the time—in 1967 or later—wanted to ensure that the parliamentary ombudsman would not be able to second-guess the actuarial calculations of the Government Actuary’s Department. I thoroughly sympathise with that. As a former Minister, I would certainly not want to see the Parliamentary and Health Service Ombudsman trying to be an amateur Government Actuary’s Department No. 2. That would be mad, and I am not asking for that.

In this case, we are not talking about an actuarial calculation. I am assuming, as I have done throughout my remarks, that Government Actuary’s Department calculations of the value of the two schemes to the pensioners, if they had been of equal risk, were perfect. My problem is what the calculation did not bring to light. It was not an actuarial calculation. It was a failure of a duty to point out the obvious in an extremely important way to people who may not have known it was obvious.

It is arguably clear that that is maladministration that the parliamentary and health service ombudsmen should be able to adjudicate on. It would require only a small amendment to section 4(1) of the 1967 Act in the forthcoming parliamentary ombudsman Bill to remedy that. We would then be able to go back to the ombudsman and say, “Now you have the power to look at what the Government Actuary’s Department did, whether it constituted maladministration and whether in your view that maladministration was material in having an effect on the pensioners, the choices they made, and hence the losses they incurred.” Then, as with Equitable Life—I threatened to go on hunger strike if the then Government did not bring in the ombudsman and agree to follow its ruling—it would be possible to introduce a scheme with compensation proportionate to the extent to which the losses to the pensioners were caused by the maladministration.

We all know that the Equitable Life scheme is not perfect and does not fully compensate the pensioners, because much of the problem was due to the directors and not the regulators. However, to the extent that it was due to the regulators, there has been a compensation scheme exactly like my proposal. We could do that in this case if we changed section 4(1) of the 1967 Act.

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[Ian Blackford]

I will do so, Ms Dorries, as I was intending to.

I congratulate the right hon. Member for West Dorset on securing this important debate. He has been assiduous in pushing the case, and his suggestion this afternoon of looking at amending the law as it affects the ombudsman certainly has some merit.

I also congratulate the right hon. Member for Wantage (Mr Vaizey). He has very accurately shown what happened with the advice that was given, some of the deficiencies that were there, and the possible interference from AEAT in that process and the advice that was given.

As my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Dr Monaghan) said in his concluding remarks, we need to remember that pensions are a contract, not a benefit. Those who have paid in to pension schemes deserve to get their due entitlement. It is the responsibility of the UK Government to ensure that there is confidence in the pensions industry throughout the UK. We all look forward to a time when people can save in pensions, secure in the knowledge that they will get their due entitlement. We need to have that confidence, and it is the Government’s responsibility to ensure that the Pensions Regulator and the ombudsman discharge their obligations to ensure that the consumer interest is protected.

It is clear that pension scheme members in this case, as we heard last week in a debate in the main Chamber on the BHS scheme, are not fully protected—they are not protected to the extent that they should be. Lessons must be learned and appropriate action taken. Whether that is done through the ombudsman or the regulator is a moot point and we can come back to it in due course. What needs to be remarked on today is that, with the AEAT scheme ending up in the Pension Protection Fund, those who worked for the company when it was in the public sector have, among others, lost pension entitlement. The Government cannot walk away from their obligation to what were public sector workers. That is not acceptable.

It is clear from its conduct that the UK Government Actuary’s Department has ducked its responsibility to the AEAT pension scheme members. Liability has to lie somewhere. As discussed in a Westminster Hall debate on this topic in March last year, the Government Actuary’s Department was the author of a leaflet designed to inform pension scheme members of their next course of action in the light of the creation of AEAT. According to evidence given to the Pensions Ombudsman Service, that leaflet suggested three options, but also said that it was unlikely that the UKAEA scheme would fail or that

“the benefit promise made by either the UKAEA scheme or the AEAT scheme would ever be broken.”

That was in my book an inducement and assurance to the scheme members. Who will stand behind the scheme members who were made those promises? Will the Minister accept that the Government at least have a moral and ethical responsibility?

[Richard Fuller]

I heard the hon. Gentleman make these points in the British Home Stores debate last week. Does he not think that it will be very difficult for the Government to take action on employer behaviour that seems to fall below the norms that they would expect if they do not keep their own ship in order?

[Ian Blackford]

The hon. Gentleman makes a very valid point. I argued last week and argue again today that we must learn the lessons of the failure that has taken place. We have to ensure that we create confidence in pensions—that is what emerges, whether we are talking about BHS, the AEAT scheme or many others. We have to look at the responsibility that the regulator and the trustees have, but it is a responsibility, ultimately, that we all have as legislators.

The pensions ombudsman said that the scheme’s post-privatisation survival, and hence scheme benefits, were not guaranteed:

“AEAT was a private sector company and so there was a risk of the company getting into financial difficulties or failing altogether.”

It is clear that the circumstances surrounding the information provided by GAD at the time of the transfer, or the lack thereof, warrant thorough investigation in the light of AEAT being unable to meet its commitments. If it is the case that vital information was left out of the leaflet, it is a serious matter and must be treated as such.

This would certainly not be the first time that a UK Government Department has been found guilty of misinforming pensioners. The shambolic handling of the notification process for the WASPI women has meant that thousands of women born in the 1950s face hardship, having unexpectedly to push back their retirement by years. The members of the AEAT scheme deserve a full and thorough investigation that incorporates the timelines from the creation of UKAEA to the present so that mistakes can be identified and those responsible held to account. When hard-working employees are promised a pension and it is not delivered, there should be a concerted effort to establish a thorough and independent investigation to determine accountability and all avenues that can be explored to protect pension rights.

The Scottish National party has long called for the establishment of an independent pensions commission to build the architecture to ensure that employees’ savings are protected, and that a more progressive approach to pensions is taken. Will the Minister commit the Government to doing that today? There are far too many issues affecting pensions policy and they need to be addressed in a holistic manner. Establishing a pensions commission would be an important step in ensuring fairness in pensions policy, dealing with problems such as this one and building confidence in pension saving.

In summary, I look forward to hearing the Minister’s response. For the first time in his capacity as Pensions Minister, I welcome him to the debate, and also welcome the Labour Front-Bench spokesman, the hon. Member for Stockton North (Alex Cunningham).

--- Later in debate ---

[Richard Harrington]

I thank my right hon. Friend for those comments. It is certainly true to say that the area of risk is not discussed explicitly and it is reasonable to argue that there should have been a box with a health warning saying that one piece of advice—or not advice, but information—was different from another because of the risk element, but it is also fair to say that the note does not attempt to assess risk. It may imply by default that one was less risky than the other, but it certainly does not say anything that could be interpreted as misleading the people who received it, in my view.

I understand the position of constituents in the Public Gallery today, some of whom are understandably shaking their heads, given their views about what I have just said, but it is very easy, years later, to pick pieces out of documents. If it said that this was advice, that would be one thing, but it clearly says that people should take independent advice.

My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), the former Secretary of State for Work and Pensions, said that independent advice would not cover the risk of transferring. Please do not misunderstand me: I am not saying that I have no reason to believe him, but I cannot understand why an independent financial adviser would be more or less likely than anybody else to comment on the risk or the lack of risk in giving advice. As I said, I accept that it is easy for us to say things all these years later, but the note does not seem to me to be intended to cover every eventuality. It was eight pages long and it was not intended to cover everything. It does not completely ignore the subject of insolvency.

[Richard Fuller]

I am struggling with something that the Minister said. He indicated that the advice of the actuary was able to be second-guessed by someone then going to an independent adviser. My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) talked about the role of the PHSO and said that it did not investigate the rulings of the actuary so that it could not second-guess the advice the actuary gave on liability. So which way should we have it?

[Richard Harrington]

My hon. Friend knows very well that I did not say that. I said that an independent adviser is no more or less likely to consider the idea of risk. I was actually referring to the view of my right hon. Friend the Member for Preseli Pembrokeshire that suddenly Government advisers did assess risk, but independent advisers could not possibly do so. I will have to make progress, because we are running out of time. I believe that the note was intended as a helpful starting point but did not constitute advice for members.

I will move on to the parliamentary ombudsman—I must deal with the ombudsman service generally and the choice of ombudsman, because they are so important in this case. It is correct that the actions of the Government Actuary’s Department fall generally outside the parliamentary ombudsman’s remit. I understand, however, that is only one of the reasons that the parliamentary ombudsman gave for deciding not to investigate. I hope I am not misrepresenting what she said—I have tried to look into this in some detail—but it seems to me that her decision was made partly on the basis that the complaints were not about the actions of a Government Department in relation to a citizen, which is what the ombudsman service is for. She has concluded that the complaints are about information provided in relation to employees and employees’ pension rights. That is why it is not the concern of the parliamentary ombudsman. If that is a correct interpretation of her opinion, changing the legislation to allow her office to have greater oversight of GAD would not solve the difficulty raised in this debate.

Supported Housing: Benefit

Richard Fuller Excerpts

Wednesday 20th July 2016 Commons Chamber

[Grahame M. Morris]

It is a matter of fact. It is a kind of chicken-and-egg situation: surely you review the evidence before you announce a decision and then put it on hold. I believe the review was started in 2015—perhaps the Minister can correct me if I am wrong—so why are we still waiting for the results? Why did the Chancellor of the Exchequer make an autumn statement that had huge implications for some of the most vulnerable people living in supported housing, without looking at the evidence first?

[Richard Fuller (Bedford) (Con)]

Will the hon. Gentleman give way?

[Grahame M. Morris]

I will give way this once, and then I would like to make a little more progress.

[Richard Fuller]

I do hope the hon. Gentleman will talk about the 20 years prior to this review, when there was no review. For many years under the Labour Government, there was no review of what was happening with the additional housing benefit for people in supported housing or of how it was being spent. Does he remember that in the last debate on this issue, many people said they did not know where that money was? They did not know how much money was being spent, what it was being spent on or whether it was effective. Are the Government not therefore absolutely right to conduct this review and then to come forward with their proposals? Is he really not just scaremongering?

[Grahame M. Morris]

We have to deal with the position we now find ourselves in. Demand for supported housing has changed and increased dramatically. One million people rely on food banks, which certainly was not the case 10 years ago. We have a huge problem with people suffering from mental health problems and learning difficulties. We have a debt to our armed services personnel—our veterans—many of whom have post-traumatic stress disorder and need supported housing.

There are therefore new factors that we need to take account of, but, if I may be so presumptuous, it is surely the job of the Government to commission the studies. [Interruption.] Well, indeed. My right hon. Friend the Member for Wentworth and Dearne and my noble Friend Lord Beecham—or Jeremy Beecham, as we know him—have tabled a series of questions and got the answer that Ministers do not know. That is a bit of an indictment of Ministers, who are supposed to compile an evidence base on which to make decisions.

Looking again at the advice of professionals, we see that the National Housing Federation estimates that a staggering 80% of the total planned new build will not be built.

[Richard Fuller]

indicated dissent.

[Grahame M. Morris]

The hon. Gentleman is shaking his head, but this is—[Interruption.] In practical terms it means that 9,270 specialist homes will not be built—[Interruption.] I will tell the hon. Gentleman why that is, because he is chuntering.

[Richard Fuller]

I’m sceptical.

[Grahame M. Morris]

Sorry, the hon. Gentleman is sceptical. The reason is that providers need certainty; without certainty they cannot proceed. Often, they are raising funding for these schemes—I can see the Minister for Housing and Planning nodding in agreement—and they need certainty when going to the market. Where there is uncertainty, they cannot raise the necessary funding. On that basis, as responsible organisations—they are a mixture of local authorities, housing associations, charities, charitable trusts and so on—they cannot reasonably go on to build the supported housing units I think everyone in the House agrees we need.

There is another effect as well. That situation, in turn, has a knock-on effect on the construction industry. The jobs that would have been created, and that I think we all want, will not now happen. This is an important sector, and we should be growing it, not allowing it to contract. At a time when house building outside London remains in the doldrums, that will be another setback for the industry and the economy.

How on earth can Ministers expect supported housing providers to continue, when they know that spending cuts and other policy decisions have already hit people living in supported housing schemes? Supported housing provides vital help for tens of thousands of people across this country. It is mark of a decent, civilised society that services such as this exist in the first place. They play a crucial role in providing a safe and secure home with support so that people can live independently and others can get their lives back on track. As I mentioned, that includes supporting ex-servicemen and women to find a stable home, including those suffering from post-traumatic problems, and with mental health needs and physical disability needs.

I remind the House of the armed forces covenant, which sets out the relationship between the nation, the Government and the armed forces. It recognises that the nation as a whole and this House in particular have a moral obligation—I call it a debt of honour—to members of the armed forces and their families. It establishes how they should expect to be treated and how we should expect to treat them. I am an eternal optimist—I am a Sunderland supporter and we have escaped four times—but if Ministers do not do a U-turn today, they will be breaking that covenant with our veterans and those who have given so much in service to their country.

In addition to ex-servicemen and women, many older people also rely on supported housing to maintain their independence. These elderly citizens have worked all their lives and paid their taxes, only to find in the autumn of their lives that their Government are turning their back on them. Personally, I think that that is morally indefensible and a betrayal of a generation that gave us the welfare state and the national health service.

I know that some of my hon. Friends are going to address the issue of victims of domestic violence, who are another important group. Over time, a number of Members—not just Opposition Members, but Government Members—have raised concerns about the closure of homes for victims of domestic violence. I understand that at least 34 such establishments have closed, and I am advised by housing associations that all eight in my own region are at risk of closure, including that in my own constituency.