Oral Answers to Questions

Seema Malhotra Excerpts

Monday 17th May 2021 Commons Chamber

[Mr Speaker]

I call Seema Malhotra, the shadow Minister.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

May I say that this is going to be my last DWP questions in this role and thank the Minister for the constructive way that she has developed the relationship? I will be handing—

[Mr Speaker]

This is disappointing news.

[Seema Malhotra]

I am sorry, Mr Speaker, but I will be handing over to my hon. Friend the Member for Middlesbrough (Andy McDonald), on whose behalf I ask this question.

Last month’s data shows kickstart helping less than 4% of 16 to 24-year- olds who have lost their jobs over the last year. The scheme is nowhere near matching the scale of the challenge and, even worse, the Department, as has just been confirmed, still plans to end the scheme just as unemployment is set to peak. Employers speak of delays of weeks for vacancies to be approved and then advertised. It is almost a year since the Chancellor announced kickstart. There is no excuse for long-term unemployment becoming a legacy of the pandemic, so when are things going to change, and will the Secretary of State now urgently review the December kickstart end date in line with calls by Labour, the Confederation of British Industry and the Youth Employment Group, so that employers can also plan ahead?

[Dr Coffey]

First, I congratulate the hon. Lady on her new role; I understand that she is moving into the shadow Business, Energy and Industrial Strategy team and I am sure that she will be a huge success there, too.

In terms of kickstart, in the last four weeks, we have achieved, on average, 400 starts a day. This is in line with what we are seeing with the opening up of the economy. Today, we are on the first element of step 3, and we expect the starts under kickstart to get going. On the plan for jobs, we want to make sure that we properly evaluate all the measures to make sure that they achieve the ultimate goal of ensuring that as many people as possible are in work by the end of this year.

Oral Answers to Questions

Seema Malhotra Excerpts

Monday 8th March 2021 Commons Chamber

[Mims Davies]

I can absolutely assure the hon. Gentleman that we work with the local recovery plans and that we have a plan for jobs in Cambridge and beyond, so there is positive news in his constituency. We are doing our sector-based work academy programmes in construction, warehousing and care. We are working with our new job finding support service with the Papworth Trust. We are engaging with local companies on kickstart—indeed, we are working with Addenbrooke’s and a bunch of other local companies—and we have recruited 50 new work coaches for the Cambridge jobcentre since March, with 18 more to come, making an extra 68 to help in his constituency with that local recovery plan.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

In June, the Prime Minister promised an opportunity guarantee for every young person. With 800,000 young people now not in education, employment or training, and only 4,000 kickstart placements to date, the Minister recently told the Work and Pensions Committee, “Watch this space”, and that details on the guarantee would land at the Budget. If the Prime Minister announced it and she supports it, did the Chancellor not get the memo or has the Treasury once again blocked support where it is needed? Can the Government not get their act together on a jobs promise such as the one Labour has proposed so that young people out of work or training at six months get the opportunities that they need?

[Mims Davies]

I know the hon. Lady is committed to opportunities for young people, as am I, and our plan for jobs has multiple interventions: the £2 billion kickstart scheme, job finding support, JETS—job entry targeted support—the 13,500 new work coaches, our £150 million boost to the flexible support fund, and restart coming this summer. I assure her that our focus on youth continues. In her constituency, 17 employers are engaging with kickstart for young people, with 77 vacancies available and 11 starts. Of course, 140,000 opportunities are coming through the system now and I continue to have this focus on youth employment, as she rightly points out that we should, and I will continue to work across Government to highlight that.

Social Security

Seema Malhotra Excerpts

Tuesday 9th February 2021 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I speak today on behalf of my hon. Friend the Member for Westminster North (Ms Buck), who is unable to be with us.

This country has been tested over the past year and our communities have seen struggle in many ways. The pandemic has also held up a mirror to our country’s resilience and to household resilience. I join the Minister in thanking the work coaches and other civil servants across the country for all that has been done in the DWP to support those in need.

It is right that the uprating order will increase working-age benefits, disability support and the state pension this year, but the Minister will know that the Conservatives froze working-age benefits between 2016 and 2020, and finally increased them by 1.7% last year. However, unemployment support was still at its lowest level in real terms since 1992 prior to the emergency uplift, a policy that has left families struggling to make ends meet.

Labour supports the Government’s decision to honour the triple-lock state pension commitment this year, which will see the basic state pension and the new state pension rise by 2.5%. The Secretary of State has decided to uprate the personal or standard allowances of universal credit, income support, housing benefit, jobseeker’s allowance, employment and support allowance, and disability carer and other working-age benefits in line with prices, but that comes after this decade of cuts. Excluding coronavirus-related increases, the majority of working-age benefits were between 9% and 17% lower last year than they would have been if benefits had been updated by CPI since 2010; that is according to the House of Commons Library.

I want to highlight in my remarks three important omissions from the order. The Minister has referred to the first of them; I think he spent so much time talking about the withdrawal of the uplift because it is a matter of concern to colleagues on both sides of the House—and I do mean both sides of the House. It is disingenuous of him to say that we are scaremongering when all we are doing is highlighting the concern felt by families up and down the country and by many groups that I will also mention in my comments today. He and his Government have yet to say what is happening to this lifeline for families in need—a lifeline through lockdown and as lockdown starts to be lifted. Indeed, there are reports today of the Chancellor and the Prime Minister arguing about what should be happening to the uplift.

The Minister will know of the extra costs that families are facing, including from increased food costs for children at home, the use of small local shops, the need for home schooling materials and increased utility bills. The 0.5% increase on last year’s universal credit level that he has proposed will be academic for those who are set to see a cut—and it is a cut—to their universal credit of £20 a week from April. If the Government are seriously thinking about economic recovery, cutting universal credit is like pulling the rug from under the economy’s feet. This £20 a week is not saved by families; it is spent in shops and businesses across the country, stimulating the economy. And we all agree that this pandemic and the unemployment crisis will not be over by April this year. The reason people want to know about what is happening with the uplift is so that families can plan ahead for what is to come.

The Resolution Foundation has also highlighted the income shock that comes with a move to universal credit, with a third of new claimants reporting a drop in their income of at least 40% compared with a year ago. Citizens Advice has told us that three quarters of the people it is helping who are on uplifted benefits would have a negative budget if the £20 uplift was cut. Trussell Trust research shows that one in five UK claimants reported it very likely that they would be forced to turn to a food bank. The Child Poverty Action Group warned that this move could see another 200,000 children pushed into poverty.

Older people are paying the price, too. The number of those aged 50 to 64 who are out of work has risen by more than 175,000 since the start of the pandemic. This age group is at particular risk of long-term unemployment, and many will be forced to take early retirement before they can afford to do so. Angela in Sunderland told me that she was made redundant four weeks before her partner suffered a life-threatening illness. She became his carer, but the couple, in their 50s, have run out of savings. She is having great difficulty finding work and has drawn on her private pension to cover bills. The cut to universal credit would push Angela and her husband into further financial difficulty, at the worst time. So the Minister and his Government should do the right thing and secure our economy by cancelling the cut to universal credit from April, not least because when Labour forced a vote on the issue he abstained; almost 11,000 people in his constituency as well are on universal credit.

I also want to talk about legacy benefits, because it is discriminatory and unfair that the £20 a week uplift was never extended to those on legacy benefits, many of whom are carers or disabled. There is simply no excuse for it. This injustice has been raised repeatedly by Labour and other parties, and action has been called for by the Chair of the cross-party Work and Pensions Committee, my right hon. Friend the Member for East Ham (Stephen Timms), who is in the Chamber today. Indeed, a Committee report today highlights a recent survey by the Disability Benefits Consortium of disabled people claiming legacy benefits. It found that two thirds of disabled claimants have had to go without essential items at some point during the pandemic, and almost half report being unable to pay rent and household bills.

The Joseph Rowntree Foundation, along with 50 other organisations, has called on the Government to match the increase in legacy benefits, as part of their “Keep the lifeline” campaign. The Government claim that the legacy systems would take too long to update, but that is not a reason; it is an excuse. We are now nearly 11 months into the pandemic, so what excuse do the Government have now for that blatant unfairness?

The order also fails to uprate the benefits cap, which remains at the same cash level since November 2016. That means that families will not see any inflation-linked increase to underlying benefits that they are entitled to. The Minister knows what that means. December’s figures show that 170,000 families are seeing their benefits reduced by £246 per month on average, and 85% of those families include children. Ending the cap would put much-needed cash in the pockets of Britain’s poorest families, helping them through the crisis without a devastating increase in household debt.

Similar also applies to the local housing allowance, which has been frozen in cash terms for 2021-22, and for which the intention is to carry the freeze forward into subsequent years, as hinted by the Secretary of State in a written statement in December. It means that the Government are refusing to make even the bottom 30% of local rents affordable to private tenants.

In a compassionate society, we need a fair and supportive social security system that helps build resilience, supports people seeking work and helps families through difficult times. A quarter of UK families had less than £100 in savings when the crisis began, and the pandemic has hit families’ incomes hard.

Labour is supporting today’s increase to working-age benefits, disability support and the state pension, but the Minister has heard our views today on the major omissions, and if he will not act today, he must act soon and heed the warnings from those on the frontline. They are working with families who are doing the right thing in very hard times and asking simply that their Government be on their side.

--- Later in debate ---

[Will Quince]

I understand the point that the right hon. Gentleman has made. I know that his report goes into some detail on this issue. I gently remind the Chair of the Select Committee that universal credit is about £2 billion more generous than the legacy benefits system it replaced and is part of a broad package of support. Over and above the £20 uplift available for those on universal credit, those in receipt of legacy benefits may be entitled to other measures. It is important that they go on to the gov.uk benefit eligibility checker to check their eligibility before applying, because as the right hon. Gentleman knows, there is no path back to legacy benefits once someone has made a universal credit application. It is important to stress that universal credit is part of that broader package of measures worth more than £280 billion throughout the course of this pandemic. Yes, of course we recognise that people across the country have faced additional costs throughout this pandemic. That is exactly why the Chancellor stepped up with that £280 billion package, including an extra £7 billion in welfare support.

The Opposition spokesman, the hon. Member for Feltham and Heston (Seema Malhotra), said that we should heed the words of those on the frontline. I totally agree and encourage her to visit her local jobcentre at the earliest available opportunity to speak to work coaches, because then she will hear what they think about universal credit and how they believe it has been the tool that not only has enabled us to support an extra 3 million people throughout this pandemic but has allowed them to incentivise, support and empower people into work.

[Seema Malhotra]

I have visited my local jobcentre and keep in close touch with it. I hope that the Minister also listens to what I said about what the Trussell Trust, Citizens Advice and the Child Poverty Action Group have been saying, because that is important, and they will probably want a response from the Minister on those points.

[Will Quince]

I work very closely and meet with all the organisations that the hon. Lady references, but work coaches are an important reference point. They all say without hesitation, when I visit jobcentres across the country, that universal credit is an incredible tool—a powerful tool—to help support and empower people back into work. That is why it is so absurd that the Labour party wants to scrap it.

Several Members raised pension credit and its uptake. I have no doubt that the Pensions Minister will be willing to meet hon. Members to discuss that further, because I know that he has done a considerable amount of work in that area.

The uprating order will ensure that working-age benefits increase in line with inflation, which represents a cash increase of £500 million for working-age benefits. That includes those benefits that contribute towards extra costs arising as a result of disability or a health condition, and pensioner premiums in income-related benefits.

To conclude, I will summarise the benefit increases that the Government are implementing to support those most in need. We are increasing the basic state pension and the new state pension by 2.5%. That will deliver on our manifesto commitment for the state pension triple lock. We are increasing the pension credit standard minimum guarantee in line with the cash increase in the basic state pension to support the poorest pensioners. We are increasing working-age benefits in line with prices; we are increasing the universal credit work allowances so that claimants can earn more before their payments are reduced; and we are increasing benefits to meet additional disability needs and carer benefits in line with prices. I commend the order to the House.

Question put and agreed to.

Resolved,

That the draft Social Security Benefits Up-rating Order 2021, which was laid before this House on 18 January, be approved.

Oral Answers to Questions

Seema Malhotra Excerpts

Monday 25th January 2021 Commons Chamber

[Dr Coffey]

My hon. Friend is right. While kickstart is the flagship of our plan for jobs, we are well on track to recruit the extra 13,500 work coaches. Throughout the pandemic and across the country, work coaches have continued to provide support directly and digitally. Helping people to get ready to get back into work is a top priority and that is why other parts of the plan for jobs, including stepping up the number of places on sector-based work academy programmes, boosting job entry targeted support and launching job funding support nationally this month, are how we are helping everybody to try to get back into work.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Today, the DWP announced that more than 120,000 kickstart jobs had been created, but the Secretary of State has said that 10,000 placements are available now, and the Financial Times has reported that it is because of the Secretary of State’s delays that the other 33,000 have not yet come on stream. How on earth can it be that fewer than 2,000 young people have started placements to date? This scheme was announced six months ago and over half a million young people are out of work. Is it not the Secretary of State who needs to move up a gear so that we can secure our economy and get our young people into the jobs that they need?

[Dr Coffey]

The hon. Lady is right to ask why only 2,000 people have started. We have had a record number of applications and we have actually created more job placements than the future jobs fund ever achieved. We are trying to turn that into job starts. There are certain things going on where we are trying to roll out those jobs around the country, but I can assure her that this pipeline of jobs, which will take us right through to the end of the year as we are taking on more, is there to try to ensure that we find people the right sort of kickstarter role. We are also making sure that, as well as having covid-secure arrangements, the training wraparound support is high-quality.

Draft Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2020

Seema Malhotra Excerpts

Wednesday 9th December 2020 General Committees

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

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

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

[Seema Malhotra]

[Mims Davies]

[Seema Malhotra]

[Mims Davies]

--- Later in debate ---

[Mims Davies]

[Seema Malhotra]

[Mims Davies]

Draft Chemicals (Health and Safety) and Genetically Modified Organisms (Contained Use) (Amendment etc.) (EU Exit) Regulations 2020

Seema Malhotra Excerpts

Wednesday 9th December 2020 General Committees

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Mr Hosie.

I thank the Minister for her opening remarks. The regulations are needed to address deficiencies in retained EU law on chemicals and GMOs legislation arising from the UK’s withdrawal from the EU. The Minister has outlined the regulations, but I will cover them briefly in my remarks.

EU law has played a vital role in ensuring that the framework that regulates chemicals and GMOs operates coherently and effectively. That framework includes regulations such as the biocidal products regulation that the Minister mentioned; the classification, including of hazards, labelling and packaging, or CLP, regulations; the regulations concerning the export and import of hazardous chemicals; and the GMO regulations, which lay down measures for the contained use of genetically modified micro-organisms with a view to protecting human health and the environment. We support this instrument, which ensures that retained EU law relating to chemicals and GMOs continues to operate coherently at the end of transition.

The Minister also outlined, as does the explanatory memorandum, why, if the changes were not made, several chemicals regimes in the scope of the instrument would not be consistent with the withdrawal agreement and the Northern Ireland protocol when the transition period ends. The reasons for the instrument are clear, but I want to focus on several concerns about its effective implementation and the transfer of functions to the HSE.

The first concern relates to HSE duties as it becomes the GB regulatory authority. Leaving the EU and the European Chemicals Agency means that the HSE will take on new responsibilities. From 1 January, businesses that wish to apply for an active substance to be approved, or for a biocidal product to be authorised in Great Britain, will need to apply to the HSE instead of the European Chemicals Agency. As the Minister said, the territorial extent of this instrument is Great Britain except for certain provisions. The HSE will take on the functions that the ECHA performs where these are still relevant in Great Britain. For example, it will co-ordinate the active substance evaluation process for Great Britain. It will also introduce its own processes and systems for receiving and processing applications.

The Minister said that she has confidence in the HSE’s capacity, but she will appreciate why I am asking questions about it. The new demands pose concerning questions about whether the HSE is adequately funded, staffed and resourced to deliver its new responsibilities, particularly on top of the additional work it has undertaken due to covid. Since 2009-10, funding for the HSE has been cut by £144 million in real terms: by more than half since Labour was last in Government. Although in May the Government announced £14 million more funding for it, that still leaves a substantial cut.

We know from a response to a parliamentary question that the Government have recruited only 37 full-time equivalent inspectors since March. What review has the Department for Work and Pensions undertaken with the HSE about its resources, systems and processes, and how it will effectively carry out its extra duties, such as confirming the hazard classification and labelling of chemical substances after the end of the transition period?

Is the Minister confident that the HSE will be able to cope with that increase in responsibilities? What assessment has she made of any new specialist skills that may be required? Could there be an economic impact on the chemicals, pharmaceuticals or plastics industries if there are any delays in required work being carried out by the HSE? Has that risk assessment been done as part of any review that the Department has undertaken? There may be a need for further recruitment, and difficulties have been experienced in the past year in finding necessary specialists. Can the Minister therefore guarantee that any extra staff will be in place by the first week of January, ready for EU exit?

With the HSE potentially having to navigate and regulate stand-alone GB schemes and parts of the EU chemicals schemes simultaneously, there will be additional pressure on it. At the same time, staff will be making new regulatory decisions for UK’s entire food and chemicals markets, with limited access to EU data. Not having adequate resources and systems will also put the incredibly hard-working HSE staff under enormous pressure, which is why we and the Government must not ignore this.

None of us wants questions about the HSE’s capacity to deliver an effective chemicals regulation regime into 2021 and beyond. Indeed, this issue has been raised before, and in February this year the Government said that they

“are making sure that the HSE…have the resources and evidence they need to ensure the safe management of chemicals and to protect public health and the environment.”—[Official Report, 26 February 2020; Vol. 672, c. 159WH.]

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

My hon. Friend is making a good point about the HSE. In the European context, both the HSE and the Environment Agency fed into chemicals regulations. Is there a danger that not also increasing funding for the Environment Agency to be able to be feed into the new HSE regulator will leave an area of regulation or expertise lacking?

[Seema Malhotra]

I thank my hon. Friend for his contribution, which I am sure the Minister noted. It relates very much to the next point that I was about to make.

In February 2019, Mary Creagh, the then Chair of the Environmental Audit Committee, also raised concerns about how the new functions would be taken on within the UK and the budget in relation European Chemicals Agency funding. That is not to say there should be direct comparison of EU-wide budgets and what the UK needs, but the HSE and other agencies involved need to be sufficiently equipped in order for our scientists to deliver safe and effective products on to the UK market. For the new work now required of the HSE, other agencies within Northern Ireland and others across industry that will be involved in a proportion of the new work that will be now taken on, what assessment has been made of the level and type of additional resources required?

My second question before I conclude relates to the Northern Ireland protocol. I thank my colleagues in the other shadow departmental teams for their input on this. The Northern Ireland protocol will mean that a number of areas of law in Northern Ireland will remain aligned with the EU after the end of the transition period, as the Minister commented. Changes to the standard policy approach for unfettered access are needed for highly regulated goods, such as chemicals. This will require a strong focus on transparency requirements to ensure that UK regulators are provided with the requisite information, in parallel to that provided to the EU. With regards to unfettered access and the forms required for highly regulated goods, what estimate has the Minister made of costs to business of the additional transparency requirements, and how many exports does she expect will be covered by them?

In conclusion, the amendments to the 2019 regulations relating to the withdrawal agreement, including the Northern Ireland protocol, are necessary to ensure that retained EU law relating to chemicals and GMOs continues effectively from January. However, I would welcome reassurance about the planning and resourcing for the new functions that the HSE, particularly, and other agencies will take on.

This is one of around 20 statutory instruments that will need to be tabled before the House rises for recess. Will the Minister update us on the timetabling for the remaining SIs relating to the Northern Ireland protocol? With only two weeks until Christmas, she will understand concerns that there may not be enough time for all these to pass through the House before the end of the year with the necessary scrutiny. If she is unable to update us today, perhaps she will be able to forward that information to me after.

[Mims Davies]

I thank the hon. Member for Feltham and Heston for her comments and the questions she raised. On the final point, I believe that we are at the end of the road of what we need to do in regard to the HSE, but I am happy to take away her query. I thank all Members who have been part of this debate, and I am happy to address some of the hon. Lady’s comments.

The HSE works very closely with the Environment Agency, under the remit of the Department for Environment, Food and Rural Affairs. I am happy to take away the point of the hon. Member for Brighton, Kemptown and ask the HSE to respond to him.

As to whether the HSE has the administrative capacity and resource to deal with the additional burdens, it currently acts, as I said in my opening remarks, as the competent authority for the EU chemicals regulations and therefore already has capability and capacity, which can be built on, to take on full GB regulatory authority responsibility.

Since the announcement of the referendum and our leaving the EU, the HSE has been preparing for all different scenarios for future UK-EU relationships and has always had a focus on readiness for a stand-alone regulatory system. It will be ready on day one: roles, processes, skills and recruitment and training have all been scoped out and mapped, as part of the wider HSE transition programme, which covers chemicals regulation as a whole. We have looked at what workload there might be on day one, in terms of the operating model and how we develop the scope of chemicals regulation as a whole, carrying out discovery work with stakeholders on the work that will be needed with regard to future operating capacity.

As for HSE finances for the 2020-21 financial year, an additional £6.1 million was made available by the DWP, and £4.5 million was made available from DEFRA, to prepare for the new chemicals framework.[Official Report, 11 January 2021, Vol. 687, c. 2MC.] That represented a 60% increase on the 2019-20 financial year, and appropriate bids have also been made under the spending review for 2021-22. We wait to understand the details on that.

[Seema Malhotra]

I thank the Minister for her responses, but I would be grateful if she will clarify one point. She talked about how the HSE’s existing capabilities could be built on, and said there had been some scoping and mapping. As we are so close to the end of transition, can she say whether any risks and concerns have been raised either by DWP or the HSE to her directly about readiness for 1 January, and whether any resources might still be required?

[Mims Davies]

I am happy to respond to the hon. Lady. In fact, I must point out that owing to more demand in relation to covid the HSE budget in 2019-20 was £129 million, and there will be an extra £1.6 million for the functions in question.

On recruitment and readiness, the HSE has identified a total of 147 posts to be filled by the end of the financial year. It reports good progress on filling those posts, with 108, or 73%, filled. It is confident that that means it will be ready in relation to the transition period. Of the 73% of posts filled to date, the vast majority will start in January, with the remainder commencing in post before April.

Several campaigns are ongoing and due for completion in 2021. We are concluding the recruitment of the outstanding posts and recruiting 117 brand new posts in the chemicals regulation division, relating specifically to EU exit. That represents a 45% increase from the baseline staffing, since January 2020, and I hope that the hon. Lady will see that it demonstrates a significant commitment to taking on the new functions that are required. I believe, in fact, that we had about 900 applications when the recruitment opened.

I want to take this opportunity to pay tribute to those at the HSE who have done a remarkable job through the pandemic and covid this year. The HSE has called in or visited 78,000 businesses as part of its work on spot checks. It has a significant compliance rate and staged spot checks in more than 41,000 businesses in relation to covid issues.

As to taking on the new functions and being ready to work with industry, there has been significant engagement with industry on the next stage, including 22 comms events just this month with the chemicals industry. Since January we have engaged with more than 6,000 attendees from across the chemicals section. There is significant information on the HSE website, the chemicals section of which gets over 50,000 views a month, and over 226,000 e-bulletins go out to subscribers. There have been extensive conversations and communications with the sector, and I have joined with Ministers from the Department for Business, Energy and Industrial Strategy and from DEFRA to engage with that sector and with stakeholders.

--- Later in debate ---

[Mims Davies]

I am happy to reassure the hon. Gentleman that the REACH regulation is not included in this SI. DEFRA has the policy responsibility for REACH regulation and is bringing separate legislation forward on this. I hope that satisfies the hon. Gentleman.

[Seema Malhotra]

I thank the Minister for her responses to my hon. Friend the Member for Brighton, Kemptown, and I understand that some of the REACH regulations are covered by other SIs. However, these are very important points, so could I just probe her on one thing, which relates to the reduction in animal testing that the BPR has promoted? She has given some assurance that this will remain part of UK policy, but could she also give an assurance that if there is any change to that policy at any time, that change will come before the House? I do think people across the country will want to see us keep that commitment into the future.

Future of Pensions Policy

Seema Malhotra Excerpts

Tuesday 8th December 2020 Westminster Hall

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Mr Hosie. I welcome this debate in which I speak on behalf of my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). I congratulate the hon. Member for Delyn (Rob Roberts) on securing the debate and on his broad-ranging opening remarks on the need to support pensioners and on the uptake of pension credit, the scourge of pensioner poverty, the sufficiency of pension savings and many other issues.

I thank other Members for their contributions. My hon. Friend the Member for Luton North (Sarah Owen) spoke powerfully about the plight of the WASPI women. I also thank the hon. Member for Southport (Damien Moore), my hon. Friend the Member for York Central (Rachael Maskell), and the hon. Member for North East Fife (Wendy Chamberlain).

Hon. Members are right to say that pensions are all too often seen as a distant, complex topic. It is vital to make them easy and accessible to understand, particularly to engage younger people in savings choices early in their life. A pound saved at 18 is worth much more in retirement than a pound saved at the age of 30 or 40, or later. I welcome the many contributions on the importance of lifelong financial learning and literacy.

Ensuring that everyone, no matter their background, occupation or gender, has dignity and security in old age should be the fundamental objective of pensions policy. However, the complex and long-term nature of pensions policy decisions, and the long-term careful planning of public finances, mean that those ambitions are best realised through political co-operation and consensus. That is why, in government, Labour introduced the Pensions Commission in 2002, to provide a comprehensive analysis of the UK pensions system, assess how it was developing over time, and make recommendations on the long-term funding of pensions. Indeed, the commission charted a new direction in UK pensions policy and gained widespread consensus on reforms that might previously have been regarded as unthinkable.

I am proud that, for instance, it was the last Labour Government who created auto-enrolment, which has transformed the lives of millions, with 10 million more people now saving into a workplace pension. I give credit to the Government who took office in 2010 for their work to drive forward auto-enrolment. However, I think that we are all concerned that an estimated 12 million people may still be under-saving for retirement. We welcome the review of the policy that was commissioned in 2017 and its recommendations that the age threshold for auto-enrolment should be lowered from 22 to 18 and that the lower limit of the qualifying earnings band should be removed so that contributions are payable from the first pound earned by an employee. The Minister told us in Committee that the review will be implemented in the mid-2020s; but could we have confirmation that the intended legislation will enact those two proposals? If possible, can we have further detail on the timeframe?

[Guy Opperman]

I welcome the cross-party tone of the hon. Lady’s speech, and I hope it continues. Automatic enrolment is of course a classic example of a policy instituted by Labour, brought forward under the coalition and finally taken forward under the Conservative Government. We would definitely seek to take the action in question in the current Parliament, because we have said it would be brought forward by the mid-2020s; but many of the other policies that the hon. Lady is talking about, such as the state pension age increase brought in by the Labour Government in the Pensions Act 2007, are cross-party decisions, which I hope she continues to support.

[Seema Malhotra]

The Minister knows, indeed, the importance that we also give to cross-party consensus on such important strategic directions in pensions policy, and that we have worked closely with him on many measures in the Pension Schemes Bill. There could not be a more important time for us to work together to protect people’s financial security in retirement, because even though the Government have refused to publish their dossier on the economic impact of coronavirus, we know that the economic fallout is vast. Indeed, according to the OECD the pandemic has compounded the challenges for retirement savings, including pressures such as ageing populations, slow growth and low returns, which will continue long into the future.

Furthermore, the fall of major employers puts the pensions of entire workforces at risk. An example is the uncertain status of the 10,000 members of the Arcadia defined benefit pension scheme, where there is an eye-watering deficit of about £350 million. The Government must act to ensure that those workers get the pensions that they are owed. It is Labour’s firm view that Sir Philip Green and Lady Green owe a moral responsibility to the employees to fill the pensions shortfall. They must not allow their workers to go into Christmas not only having to deal with the consequences of losing their jobs, but fearing for their pensions.

The pandemic also brings an increased risk from pension scammers preying on people who are worried about the impact of the current economic uncertainty on their savings. That is why Labour fully supported the amendments tabled by my right hon. Friend the Member for East Ham (Stephen Timms) to the Pension Schemes Bill, to protect people better from risky transfers and improve the provision of advice, to stop people falling prey to scammers. We regret that the Government did not support my right hon. Friend’s amendments, but welcomed assurances from the Minister that regulations will be brought in to ensure that trustees should not have to proceed with a transfer where there are good grounds for believing that a proposed transfer involves moving pension savings into a scam.

On auto-enrolling people into pension guidance appointments, Pension Wise is an excellent service with high satisfaction ratings, but only one in 33 of those eligible to use it do so. Surely, it is more important than ever that people make use of impartial guidance appointments and we would welcome concrete proposals by the Government to improve take-up of these appointments.

On pension charges, at a time when millions are struggling, it is vital that pension costs and charges are reasonable and transparent, and that people receive value for money. Research by PensionBee found that 70% of non-advised draw-down customers pay more than 0.75% a year in charges costing them £40 million to £50 million extra a year and more than £175 million since the pension freedoms were introduced. The long-term impact of high costs and charges for income draw-down could be significant. It is argued that putting costs and charges on the simpler annual statement would confuse people. Instead of being provided with specific information about how much they are paying, they would be signposted to what could be pages and pages of information about charges. We note that the Minister has said that costs and charges information will only be displayed on the pensions dashboard in the longer term, but we would welcome any discussions about a guarantee for value for money as well.

I return to climate change, which is a very important area for future pension policy. The investment decisions taken by pensions involve trillions of pounds—the kind of money that can catalyse significant change when used responsibly, from investing in infrastructure to green technologies. Labour’s amendment to the Pension Schemes Bill sought to ask pension funds to demonstrate how they are helping us get to net zero emissions. It is hard to see how the Government can achieve their own climate goals while excluding trillions of pounds of British capital from those efforts. By voting against our amendment, we believe the Government missed a chance to mobilise pension funds to protect the planet and support the drive to net zero. This is despite the fact that there is clear public support for such a move. The Government must use all the tools at their disposal to channel pension funds into investments that benefit people and the planet.

Finally, I highlight the particular challenges faced by specific groups where injustices need further action. On the former ASW steelworkers, the Minister is aware of their desperate plight. Many worked for decades, paying 100% of their pensions, only to find years later that they only received half of what they were entitled to. They have been fighting for their full pensions for 20 years. Will the Minister confirm when he plans to meet the ASW steelworkers, as he has committed to, and will he work to find a cross-party solution?

I once again raise the plight of the WASPI women, about whom my hon. Friend the Member for Luton North (Sarah Owen) spoke so powerfully. Labour also found recently that 15,000 1950s women are claiming universal credit—the pandemic will have made this worse. It is unacceptable that 1950s women have been forgotten by the Conservative Government, both within the crisis and before.

Finally, on the issue of pension underpayment for married women, it feels as if almost every week a new story comes to light of the DWP’s mistakes in paying women their full pension entitlements. It is particularly concerning that many of those affected contacted the Department and were wrongly told that their pensions were correct. This is simply not good enough.

Every single one of the issues I have addressed relies on an effective departmental delivery of pension entitlements, yet this issue raises profound questions about the ability of the DWP to do just that. Labour called for an inquiry into the mismanagement of pensions payments earlier this year. It is time for the Government to take urgent action on this growing scandal, to make sure that every woman affected is paid the pension to which she is entitled and to redress the root causes of the mistakes made.

In conclusion, putting future pension policy on a long-term footing necessitates careful planning and a consensus-driven approach. Labour stands ready to support the Government where they bring forward proposals to protect people’s pensions and savings. However, we urge the Government to take action to address the clear cases of pension injustices that I have highlighted, as well as those likely to emerge through the pandemic. We also call on the Government to take a greater role in ensuring that funds are invested in a socially and environmentally beneficial way.

Oral Answers to Questions

Seema Malhotra Excerpts

Monday 30th November 2020 Commons Chamber

[Dr Coffey]

The statistics indicate that 140,000 households with children have their benefit capped; my understanding is that overall it is about 3.1% of the UC case load. I am conscious of the fact that the right hon. Gentleman wrote to me last week, in his role as Chairman of the Select Committee, with a variety of questions on the benefit cap. I will respond to him shortly, and I believe that is one of the questions he has asked me to address.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Some 85% of capped households have families with children, and the Minister revealed last week that more than 160,000 households on UC could see their benefits capped in December, when their grace period comes to an end. Does she feel no shame in plunging families and children into hardship right before Christmas? Children are paying the price for their parents losing their jobs. This is a ticking time bomb and she can stop it—it is her choice: will she scrap the cap?

[Dr Coffey]

The cap has been in an important part of policy in trying to stimulate entrance into work. I am conscious that there are still only about half a million vacancies, compared with a significant number of people unemployed. However, I am sure the hon. Lady will welcome, with me, some of the actions that are possible for some of the most disadvantaged families, particularly those supported by the £170 million covid winter grant, from which I understand her local council will benefit to the tune of about £823,000.

The Future of Work

Seema Malhotra Excerpts

Thursday 19th November 2020 Westminster Hall

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Mr Hollobone. I join colleagues in congratulating the hon. Member for East Renfrewshire (Kirsten Oswald) on securing this debate on the future of work, and on her speech. The range of contributions that we have heard from hon. Members, and the thought that has gone into each, show that the issue should, increasingly, be on the parliamentary radar.

The hon. Member for East Renfrewshire was right: the status quo is not good enough, and we cannot go back to the past. Many issues have been raised. The hon. Member for Devizes (Danny Kruger) talked about the importance of effective employment programmes. My hon. Friend the Member for Dagenham and Rainham (Jon Cruddas) rightly said that technology is not destiny and that the future is far from certain. My hon. Friend the Member for Easington (Grahame Morris) talked about how building back better cannot be left to the market, talking about a role for Government, communities and the unions. The hon. Member for Strangford (Jim Shannon)—it is always a pleasure to speak in a debate with him—talked about worrying times for the nation. He is absolutely right. This is an issue that we must all face together, with the concerns of our constituents very much at the forefront of our minds. My hon. Friend the Member for York Central (Rachael Maskell) talked effectively about dignity, identity, self-worth, and the need to reshape our economy and to look at sector councils.

I want to build on some of those themes. The issue has many dimensions. Technological change is creating the future. To some extent, it might replace work but in truth it might also not replace work—it might create those new jobs. How we embrace and shape the technology and changes of the future is down to the choices that we make. Past mistakes cannot be allowed to continue. We should not come out of this period with greater division than we saw not just going into the crisis but before, and with a deeper digital divide creating those who are in and those who are out of prosperity in future.

The imperative that a decent society does not leave people behind must be our priority. Employment will be one of the key themes of 2021. What has to be critical is not just how we create good work and jobs for the future, but access to those jobs and fair and decent pay to go with them. Why is that? Because more than 1 million jobs have been lost during the crisis. Vacancies remain 30% below pre-crisis levels, and forecasts suggest that unemployment will remain substantially above its pre-pandemic level well into 2022.

Too many entered the pandemic in an already precarious position. More than 12 million households began the year with less than £1,500 in savings. They have been hit hard as jobs and income have been reduced. Jobs are becoming less resilient, not more. The latest ONS figures show that more than 1 million people are on zero-hours contracts, almost double the number in 2013. Ethnic minorities, young people, single mothers and the lowest paid have seen their employment hit the hardest, with a double hit on BAME communities disproportionately affected by the health crisis. As has been said, they are the least likely to be able to work at home and those who will struggle for access to the new jobs of the future.

Yesterday, the Government announced an additional £8 billion for green funding for the future. That is welcome, but it does not remotely meet the scale of what is needed to tackle the climate emergency and is far smaller than the €27 billion pledged by France or the €38 billion by Germany. That is why Labour has launched its own jobs-rich green recovery action plan, which includes action to recover jobs, and investment and co-ordination to secure up to 400,000 good, green additional jobs; to retrain workers by equipping them with the skills needed; to deploy the green technologies of the future; and to rebuild business with a stronger social contract between Government and businesses to tackle the climate crisis and ecological deterioration, while promoting prosperity and employment.

I will also make mention of co-operative strategies, raised by my hon. Friend the Member for York Central. A co-operative strategy for recovery that builds from the bottom up, looking at community resilience in our recovery, is an important part of our future. Indeed, those are themes to be discussed at the West London Business conference tomorrow on the future of aviation and communities.

The future of work must mean fair work, and a social security system fit for purpose. Too many workers have had inadequate employment rights and precious little bargaining power. The pandemic has highlighted that the social security system that should underpin those workers’ autonomy in the labour market is woefully inadequate.

It is also important for the Government urgently to conduct and publish an assessment of the financial barriers to self-isolation, including the level of statutory sick pay. If such gaps are not filled, a cohort of people will continue into the next period having to make an impossible choice between self-isolating and putting food on the table. We need to support people back into work, so I hope that the Minister will reconsider the punitive culture behind benefit sanctions, brought back by the Government in July.

The future of work—a resilient, inclusive future, with good work for all—is critical as we think about how we build back better. The theme is now international, reflected in recent reports on the future of work published by the World Economic Forum, the International Labour Organisation, the OECD, the RSA and, of course, the Institute for the Future of Work, which I thank for its work supporting the APPG and its briefing in advance of this debate. Many of these debates look at the acceleration of changes in workforce practices, including the advent of automation and AI.

As change comes, however, we must lead rather than lag. There is a need to review concerns around workers’ rights and protections as labour market structures change, and issues around the future of good work and of workplaces post-covid must be matters for debate and policy. It is not a new area: 30 November marks the fourth anniversary of the launch of the Taylor review, which looked at insecure and exploitative work, the quality of work, and modern workplace values. It is time to refresh that: the Government have only passed legislation on seven of the 53 recommendations to date, despite accepting much of that report. Furthermore, in an answer to a parliamentary question today Ministers were still not able to define when the Employment Bill will be coming to Parliament.

Many employers have sought to do the right thing by employees in the uncertain period in which we live, and unions have been working closely with many of them. Other employers have sought to take advantage of the pandemic to erode workers’ pay and terms and conditions, as discussed in the “fire and rehire” debates in the House. That has exposed the need to strengthen our offer to workers and to enhance the protection afforded them. It also raises how vital it is that we listen to workers and include their views in how we shape the future of work.

According to research by the Fabian Society, some 58% of workers say that they are given no opportunity to influence how technology is used in their workplace. Emerging technological change in workplace practices must look at improved transparency, accountability and involvement: that should be at the centre of any Government plan. That plan could include how the Government will work shoulder to shoulder with trade unions to stand up for working people, as well as tackling insecure work and low pay, and transforming the training opportunities available to people at every stage of their lives, with schools, further education and higher education all part of that.

That is why it is so important to reconsider and rethink the proposed cuts to the union learning fund, which is so effective and vital to adult education. It is also important to take tough action to raise standards and root out exploitation in lower paid under-regulated sectors. An ambitious vision for how technology can be used to open up and improve opportunities for all workers should be core and part of a commitment to ensuring that the future of work is resilient and inclusive. Alongside that, we should also be looking to explore and review rights such as the right to disconnect, giving remote and electronically connected workers the tools to disconnect to ensure that their mental health and work-life balance are protected and respected. That issue was highlighted effectively by the union Prospect.

We must look at effective employment support. People must have access to work for the future. Opportunities for access must come through effective Government schemes; the latest figures show that the Government’s Kickstart scheme has so far created opportunities for around 3% of the 600,000 unemployed young people.

We also need to make sure that these are high-quality placements with built-in training opportunities for young people that provide a transition into longer-lasting employment, so that around the country opportunities for young people are sustained into a long-term future. That is important because effective support in work and out of work—including an effective social security system that supports workers—is vital. People will be looking to switch jobs following changes in the labour market perhaps 11 times, on average, in their lifetime. That is very different from the world in which past generations grew up.

In conclusion, future generations will judge us by the choices we make today to support livelihoods and businesses, tackle the unemployment crisis, and face up to the realities of the climate emergency. An economic plan needs a jobs plan, and a jobs plan needs a skills plan. A credible green recovery with sustainable jobs—something that people across the world are looking to—requires co-ordinated action across Government, harnessing investment and regulation, working alongside local government and the private and voluntary sectors to deliver system-wide change right across our country. We cannot let the failure to address pre-covid inequalities, laid bare by this crisis, now be an injustice that we allow to be passported into the future.

Pension Schemes Bill [ Lords ] (Third sitting)

Seema Malhotra Excerpts

Committee stage & Committee Debate: 3rd sitting: House of Commons
Thursday 5th November 2020 Public Bill Committees

[Guy Opperman]

With respect, I do not agree. The proposals in amendment 18 are not in accord with the proposals in the consultation by the regulator. As I have outlined, there are significant problems with such an amendment, and it is not something that this Government, or any Minister in my position, could support.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I thank the Minister for his opening remarks. He has had considerable dialogue with the hon. Member for Birmingham, Erdington (Jack Dromey), who I know is sorry that he cannot be here today. I will speak to Government amendment 9 and also Labour’s amendment 18 on his behalf. I also thank the hon. Member for Airdrie and Shotts for his interventions.

We regret that the Government seek to remove the amendment made to clause 123 in the Lords. As the Minister is aware, there are grave concerns about the impact of the provisions in the Bill on open DB schemes, which includes many public sector schemes. Labour has been clear all along that we do not accept the premise that good DB schemes are not worth protecting.

[Guy Opperman]

Neither do the Government; we are as one on that.

[Seema Malhotra]

I thank the Minister for his intervention, and I am happy to see that that commitment continues to be made. Nevertheless, it is not least because DB schemes currently have 10.5 million members, with £1.5 trillion under management. The Minister will have noted that the Pensions Regulator recently made clear its desire to

“develop an approach that works well for open schemes”,

stating that it wishes to

“secure a reasonable balance between protection of member benefits, fairness between schemes, and flexibility for schemes to fund and invest as they wish—especially where they have a strong covenant and a long-time horizon.”

The new subsection (2)—as amended with this objective in mind—requires the Pensions Regulator to take a different approach to regulating the funding of open DB schemes, compared with those that are closed. It sets out several factors for the Secretary of State to take into account in regulations regarding scheme funding, which include distinguishing between open and closed schemes, balancing scheme liquidity and scheme maturity, and ensuring that affordability of contributions for employers and members is maintained.

Notwithstanding the Minister’s comments, I want to continue with our argument. A number of peers with considerable authority in the pensions world spoke in favour of the amendment. The Minister said he had spoken with some of them in recent days, including Baroness Altmann, who supported the amendment in the Lords. Baroness Altmann noted that the Pensions Regulator’s funding code seems

“to want to drive DB schemes on a path to so-called de-risking, aiming for a particular date of maturity. This concept is simply inappropriate for an open scheme.”—[Official Report, House of Lords, 30 June 2020; Vol. 804, c. 681.]

However, given that the Government do not wish to retain these provisions, Labour’s amendment 18, in the spirit of constructive engagement that we have maintained throughout this Bill, offers a compromise—as was noted by the hon. Member for Airdrie and Shotts—which aims to address the need for flexibility in the treatment of open schemes with the Government’s aim, which we share, to ensure that schemes plan appropriately for the long-term.

The Minister said that this was not an appropriate compromise, but allow me to lay out our arguments for proposing it. In drafting amendment 18, we sought to address some of the concerns that were raised about clause 123, as amended in the Lords. The present amendment has two core objectives. The first is to support the ability of trustees to decide the funding and investment strategy for schemes, taking into account current and future maturity and liquidity, consistent with the trustees’ duty to invest assets in the best interests of members and beneficiaries. That is intended to protect schemes from any inappropriately risky or risk-averse requirements that would significantly adversely affect the affordability of schemes for employers and members. The second is to recognise that schemes are usefully and beneficially open to new entrants and should be allowed to remain so. The amendment is aimed at avoiding requirements in funding investment strategies that are likely to accelerate the closure of relevant schemes.

--- Later in debate ---

Climate change risk

[Seema Malhotra]

I beg to move amendment 17, in clause 124, page 118, line 23, leave out “an occupational pension scheme” and insert—

“(a) an occupational pension scheme, or

(b) a contract-based workplace scheme”.

This amendment would add contract-based workplace schemes to obligations under this clause, as well as occupational pension schemes.

I will keep my remarks on the amendment brief. In a sense, it builds on the positive work in the Lords on climate change by extending the provisions in the clause to contract-based workplace schemes as well as occupational pension schemes. I hope the Minister will agree that it is a common-sense extension of the welcome measures already contained in the Bill, and that it would ensure effective governance of all relevant schemes with respect to the effects of climate change.

[Guy Opperman]

The clause introduces a variety of measures in respect of climate change risk. We believe the clause and the regulations that it allows the Government to make are a huge step forward in the UK’s fight against climate change and mark the first provisions of their kind globally.

We are proud that this Government are the first among the G7 to introduce a target for net zero by 2050. We are among the leaders in environmental, social and corporate governance with the pioneering way that we are transforming the pensions and asset managing processes of the City of London, and the pensions provision, on an ongoing basis. We have the green finance strategy that the Government have introduced. I respectfully suggest that the build-up to COP26, which is one year from today, gives us an opportunity to show the great work that we are doing in this country and to demonstrate how we can show leadership around the world.

I believe we all know and accept that climate change is a pressing and imminent threat not only to our planet, but to our investments and, therefore, to our pensions. Back in August, my right hon. Friend the Secretary of State for Work and Pensions launched the Government’s consultation on the measures they propose to introduce, which include powers to ensure that pensions are properly protected against the risk posed by climate change and can take full advantage of the investment opportunity it presents. I believe that there is an opportunity for this country to lead the way—an opportunity to be the first in the market as we create climate change-friendly investments and an investment strategy that genuinely transforms this country, helps us to get to net zero and provides sustainable long-term pensions.

--- Later in debate ---

[Seema Malhotra]

It is a matter of cross-party pride that we are seeing the commitment to climate change risk come into pensions legislation, and that we are leading the way on this issue. Over the past few years, we have introduced flexibility for trustees to look at non-financial measures in relation to investment decisions, which is an important part of the journey. In the spirit of these legislative provisions, does the Minister agree that, to realise the potential of the Bill and the opportunity for trustees, it is important to continue dialogue and to seek international agreement? Some countries are making progress in the right direction, but others are not—for example, the legislation passed in Australia looks like it is going in the opposite direction.

[Guy Opperman]

The hon. Lady makes a number of good points, all of which I endorse. It was noted in the record of the conversation between the Prime Minister and his Australian counterpart only last week that our Prime Minister tried to make the case to Mr Morrison that Australia should be doing more on climate change. The flipside of that is that, clearly, we should be using our advocacy. It is to his great credit that the right hon. Member for Doncaster North (Edward Miliband), when he was the Secretary of State for Energy and Climate Change in the Labour Government, introduced the Climate Change Act 2008. That work has continued since under the coalition Government and the Conservative Governments. The direction of travel could not be clearer in this county, and I believe our legislation has made clear what we are trying to do.

--- Later in debate ---

[Guy Opperman]

I entirely endorse everything you say, Mr Stringer, and I apologise. I was answering too fully what I would suggest is probably a legitimate question from the hon. Member for Feltham and Heston about a clause entitled “climate change”.

However, to return to amendment 17, I respectfully suggest that that is not necessary. There are two fundamental reasons why. First, action has already begun on that specific issue; I have provided the hon. Lady with the exchange of correspondence between myself and Chris Woolard, the interim chief executive of the Financial Conduct Authority, dated 30 September and 22 September 2020, which specifically addresses the point. The FCA is the appropriate regulator to make proposals for its regulated sectors. The FCA, as Chris Woolard makes clear, will be making proposals on climate change with respect to personal pension schemes, otherwise known as contract-based schemes. The letter has been in the House of Commons Library since Second Reading.

I can assure the Committee that the FCA plans to consult on corresponding climate-related financial disclosures for personal pension schemes in the early months of next year and to finalise the rules by the end of 2021. That will mean that by 2022, subject to consultation and cost-benefit analysis, pension schemes, no matter whether they are occupational or personal, will be subject to TCFD reporting requirements. The whole point of the exchange of correspondence is that the FCA has effectively accelerated the process it has been going through to catch up with what the DWP and regulators are doing in this space. Given that announcement, I urge hon. Members to withdraw amendment 17.

[Seema Malhotra]

I take on board the points the Minister has made. This is an area that may requires further dialogue, and we will reflect on what the Minister has said. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 124 ordered to stand part of the Bill.

Clause 125

Exercise of right to cash equivalent

[Stephen Timms (East Ham) (Lab)]

I beg to move amendment 21, in clause 125, page 121, line 11, at end insert—

“(e) the results of due diligence undertaken by the trustees or managers regarding the intended transfer or the receiving scheme.”

This amendment enables regulations under inserted subsection (6ZA) of section 95 of the Pension Schemes Act 1993 to prescribe conditions about the results of due diligence undertaken in relation to a transfer request such as to determine that the statutory right to a transfer is not established if specific “red flags” are identified in relation to the transfer or intended receiving pension scheme. Amendments 22, 23 and 24 are related.

--- Later in debate ---

[Stephen Timms]

I am grateful to the Minister and to everyone who has taken part in this debate. I welcome a lot of what he has said. On guidance, he told us that the FCA writes to everyone at age 50, but it seems to me that what it should do is say, “Your appointment with Pension Wise is at the following time and place”, taking advantage of that opportunity to increase significantly the likelihood of the guidance being taken. I am grateful to him, however, for saying that further information will come forward before Report and that the discussions and deliberations on the four amendments will also carry on between now and Report. At this stage, therefore, I do not propose to press any of the amendments to a vote.

[Seema Malhotra]

I want to make a few comments. I appreciate the exchange between the Minister and my right hon. Friend the Member for East Ham. I recognise the complexity of the different regulators that the Minister alluded to, and the need to join things up. From a consumer perspective, it is very important to join up different regulators, because it is difficult and confusing for individual consumers or citizens to deal with multiple regulators on different issues. Invariably, we end up with multi-year battles that are exhausting for them and their families. Therefore, ensuring that we have stronger remedies in place is critical to reduce some of the risk.

I support my right hon. Friend and appreciate Minister’s comments about not carving out FCA-regulated schemes that still pose a risk for those at risk of scams. The Minister has mentioned further regulations to come and that the exchange between him and my right hon. Friend the Chair of the Select Committee has been placed in the House of Commons Library—it will be important to review that—but the test will be the extent of the improvements to the system and of the tightening of protections. Those who are vulnerable to pension scammers are at serious risk, and gaps in regulation increase their vulnerability. It is not a harm-neutral situation. This is a uniquely difficult time, and it is a sad fact of the pensions world that there are people who seek to capitalise on that.

The hon. Member for Airdrie and Shotts also made some important comments. I want to lend our support, but we also need to keep this under review as we debate the regulations. We support the amendments, although my right hon. Friend the Member for East Ham has chosen not to proceed with them at this stage. They propose a sensible set of measures to counteract the risks that people, particularly those who are especially vulnerable, face right now.

Amendments 21 to 24 could play a part in future stages of the Bill. They would strengthen the protections to prevent individuals from transferring their pensions into scam schemes. We also welcome that the amendments have been tabled on a cross-party basis by members of the Work and Pensions Committee. It would be helpful to see how quickly those concerns move on to the Minister’s radar, and his imperative to act on them. We welcome both the ongoing dialogue with the Chair of the Select Committee and the proposed route map for addressing the issues under existing powers, which we hope will dramatically increase protection against scammers.

New clause 10 is intended to protect people from scams by auto-enrolling pension scheme members in pensions guidance appointments. That principle is extremely important, and the arguments for a much-needed source of information and impartial advice were well made. That would empower individuals to make good pensions decisions, and through that empowerment they would be more resistant to scammers.

We strongly support the intentions of new clause 10 and amendments 21 to 24, tabled by my right hon. Friend the Member for East Ham. I congratulate him on his Select Committee’s work on this crucial issue, which is a serious matter and could become more so for all our constituents. It is important to have the right protections to give savers greater confidence, particularly with continued pension scheme reform. I urge the Minister to act speedily to ensure that the arms of government that he talked about continue to work closely. I am sure that we can encourage and support him, on a cross-party basis, to move that along more quickly.

I would like to acknowledge the work of Pension Wise and Citizens Advice, and the services that they provide. There will, I hope, be ways—perhaps through what we can do here—to raise awareness of the services that those organisations offer, and, importantly, of pre-emptively encouraging people to get advice in what is a difficult area. We all fall prey to that: when something is incredibly confusing, as my right hon. Friend said, it gets put at the bottom of the pile, often until it is too late. These protections will go a long way to giving more people, particularly younger generations, the confidence to save and save early, which makes a difference.

[Stephen Timms]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(James Morris.)