Pension Schemes

Stephen Doughty Excerpts

Thursday 2nd May 2024 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is a pleasure to follow the Chair of the Work and Pensions Committee, my right hon. Friend the Member for East Ham (Sir Stephen Timms), and I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate. It gives us a chance to raise a number of issues, and I have listened with particular interest to the remarks about defined-benefit schemes and the recent report of the Select Committee, which is what I want to talk about today.

I speak, as the MP for Cardiff South and Penarth, on behalf of the many individuals affected by the collapse of the Allied Steel and Wire pension fund. That of course affected not just constituents in Cardiff South and Penarth, but people across south Wales and in other locations in the UK. I have regularly met constituents and others affected by that terrible injustice. Over the time I have been in the House, I have heard the passionate way in which they have made their case, which is heart- breaking. They put into a pension scheme expecting a defined benefit after many years of service in a tough industry—steelmaking, which has a proud tradition in my constituency, as it does across south Wales—yet they have not received what they paid in for. That is essentially because the employees were members of the ASW pension plan and the ASW Sheerness Steel Group pension fund, both of which were wound up underfunded.

Those members ended up having to rely on the financial assistance scheme, which, as has been said, provides financial assistance to members of defined-benefit pension schemes who lost all or part of their pension following their scheme coming to an end between 1 January 1997 and 5 April 2005. The arrangements that were made resulted, in theory, in members receiving something broadly equivalent to 90% of the expected pension, which is obviously less than what they expected to receive, but this could be reduced if it was above the FAS cap. Of course, members who had paid in substantial amounts before 5 April 1997 did not receive any index linking, which means that the value of their pension pots has been substantially reduced. Even the funding that went in after that date will not have kept pace with actual inflation, because it was related to the increase of up to a maximum of 2.5%. The net result is that many of them received somewhere between 40% and 50% less than they felt they were entitled to.

Those members, many of whom paid into the schemes in good faith, have often explained to me very clearly how they were originally sold the schemes. They were told it was going to be absolutely solid—as solid as the steel they were making—yet they found themselves in real difficulties in later life. Sadly, many of those members have since passed away, or suffered illness, financial hardship, mental distress and many other issues during that time.

[Christine Jardine (Edinburgh West) (LD)]

The hon. Member raises a point that I have been particularly concerned about. Constituents have recently come to me because they are facing problems getting their pension entitlement from Police Scotland, so from a public sector pension. One of the lessons we need to learn from these continual scandals is that we need to act quickly, because the longer we take, the more people lose out, and people pass away and never get the justice they deserve.

--- Later in debate ---

[Stephen Doughty]

I agree with the hon. Lady. Indeed, that is reflected in what the Committee set out, which I will come to in a moment. Quite understandably, those pensioners have made it clear to me that they see themselves in the ilk of other huge, historic injustices, such as those we have heard about in recent months with the sub-postmasters Horizon scandal and the infected blood scandal. Obviously, the longer it goes on, the more pain and financial and mental distress they endure, and tragically many pass without receiving any of what they were entitled to, and certainly not the full amount.

I have met numerous Pensions Ministers and written to them many times. I have spoken in this House many times and told the stories of these pensioners. I thank shadow Front-Bench colleagues, in particular the acting shadow Secretary of State, my hon. Friend the Member for Wirral South (Alison McGovern), and my hon. Friend the Member for Lewisham, Deptford (Vicky Foxcroft), who is on the Front Bench today. I also thank previous shadow Pensions Ministers, including the late Jack Dromey, for all they did to engage with pensioners, but people are still not getting the answers that they rightly expect—I will come on to the response that I have had from the Minister in due course.

Let me turn briefly to the recommendations in the DWP report, which I know the Minister is familiar with. Its 22nd recommendation states:

“Financial Assistance Scheme members are likely to have more of their service before 1997, so are particularly likely to be affected by non-indexation of pre-1997 benefits. Any improvements for PPF members should also apply to FAS members.

Given the age of many FAS members, the Government should legislate as a matter of urgency to provide indexation…for pre-1997 rights…The Government should review the Financial Assistance Scheme, including looking at the case for removing other discrepancies in FAS compensation, compared to the PPF”.

Paragraph 156 of the report states:

“Like the Deprived Pensioners’ Association and Prospect, the Pensions Action Group—”

which has worked on behalf of these pensioners over many years—

“said that indexation on pre-1997 benefits is its priority. Most FAS members have the majority of their service before 1997 and most were in schemes that provided for indexation of between 3% and 5% on all members’ pensionable service. Non-indexation of benefits…means that the average FAS award (£2,700) is progressively lower than the amount expected from the original pension schemes. Terry Monk said: ‘people should get what they paid for—end of story. If people paid for it, they should get it.’”

That is a sentiment I have heard over and over again from my constituents and others.

As I said, I have engaged with many Pensions Ministers —there have been many over the years while I have been in the House—and I had a letter from the Minister on 18 April regarding those on whose behalf I wrote to him. It said:

“I am aware of, and welcome, the report of the Work and Pensions Select Committee into defined benefit pensions. These are complex matters which require careful consideration. Any solution needs to be balance and take account of the interests of Financial Assistance Scheme members and taxpayers who fund the Scheme. Therefore, I am now actively considering next steps…with an aim to publish our response in early summer.”

Will the Minister meet me, my constituents, and other representatives who have been campaigning on this for so long? Will he give some timeline for when he expects to respond to the Select Committee and the specific points? Will he provide his Department’s estimates of the costs involved, and say how those weigh up in different scenarios? This issue obviously affects thousands of individuals. I have heard different figures quoted at different points for addressing the concerns, and it would be good to understand his independent assessment.

A passionate case has been made by my constituents and those affected. This was a highly publicised scheme. The former ASW site is now under new ownership but it is still at the heart of my constituency and a visible sight in Butetown and Tremorfa. Many of those affected live locally and did not get what they thought they were going to get. That has caused huge distress to them and their families. We need to provide them with some answers, and I urge the Minister to look carefully at the case they have made and at the findings of the Committee.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

It is a pleasure to speak in this debate, and I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing it and the Backbench Business Committee on granting it.

This is an important matter, no matter what age people are. I appreciate that today we are not talking particularly about state pensions, but I call on those on the shadow Front Bench to please desist from this scaremongering about what may be happening with state pensions. All parties have committed to having the triple lock in their election manifestos, and it has worked well. There has been a big uplift in the state pension since 2010. We worked on that with the Liberal Democrats when we were first in coalition and have continued with it, with a couple of exceptional reasons in the pandemic—once when we used primary legislation to ensure that people could get the triple lock, and again when we recognised the unusual situation with covid earnings. We know that pensioners have welcomed the significant increase in their first state pension payment of this tax year, with most of them seeing that significant uplift in the week just gone.

[Stephen Doughty]

The former Secretary of State says we should not be scaremongering, but there are some serious concerns. Does she accept that the Pensions Regulator report said that the mini-Budget of the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss), contributed to a £425 billion drop in pension fund assets, which has affected every pensioner and every potential pensioner in this country? Will the former Secretary of State not at least accept some responsibility for that?

[Dr Coffey]

I certainly will not accept responsibility for that. I am conscious of the arrangement with the Pension Regulator, but also the situation that happened with liability-driven investments. The Bank of England saw that as a risk in 2018 and did nothing about it. I come back to the fact that the state pension is well trusted and well regarded, and it is scaremongering to suggest anything otherwise.

I am conscious that today we are talking about private pension schemes. In my short time as Secretary of State for Health and Social Care, what came up time and again—this Government addressed it—was the reduction in the lifetime allowance to about £1 million, which the Conservatives had introduced. I appreciate that for many people, it would be a mountain to climb to get to that kind of pension pot, but for doctors, consultants and some nurses, the lifetime allowance was proving a barrier to them continuing to work within the NHS. A sensible approach was taken, and I am pleased we have done that.

One thing that has been constant is the generous tax elements for private pensions. It is why we have had such a successful industry and why there is a difference between us and many other countries around the world in what comes from the state directly and what comes through private pensions. I recognise that the previous Labour Administration put in place the building blocks for auto-enrolment and the creation of the National Employment Savings Trust, and that was a good thing to do. I am pleased that we started that journey just over a decade ago.

Contrary to the predictions, it was good to see how many young people did not opt out. That is a huge success story, and it is why I share with the Chairman of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), a keenness to make sure we get on with the consultation to which he referred. I am sure the Minister will answer that point. I appreciate that there will always be concerns about the possible impact on jobs. I get it, and it may be that we need a two-stage consultation: one stage about age and one considering a lower earnings level. It would be good to get on, because everybody realises that the sooner people start, the more they benefit. That is an important part of why auto-enrolment has been such a success.

Another recent change in legislation is the creation of collective defined contribution schemes. Clearly, there is still some interest in those, and Royal Mail is potentially closest to starting one. We should see what we can do to advocate for that model for many institutions. This is a brave comment to make in this speech, but I wonder whether Parliament should lead by example and see whether the Members of Parliament pension scheme should move to this approach. I am conscious that the taxpayer pays for our contributions through the Government and so on, and we have an uncertain career path by becoming Members of Parliament, but where something is good enough for others and we are creating legislation for it, we should consider leading by example and giving some impetus to that new legislative vehicle. I may not be popular for saying that, and I am conscious of how some of the issues with the McCloud judgment and similar matters led to a two-tier system, which has now been rectified. However, that scheme undoubtedly need not be as complex.

I am pleased about the changes that happened in the Treasury, responding to calls from Departments such as the DWP, which led to an opening up through the Mansion House reforms of the consolidation of funds and aspects of super-funds. What we need from pension investment is good returns so that our pensioners will be prosperous—that is ultimately what this is about—and we need to galvanise what we are doing to ensure that.

I am not one of those people who believes that we will be retiring at 75 or whatever—far from it. There is a rational end to that approach. It will not necessarily take courage but it will require some imagination, co-ordination and collaboration to ensure that we have sustainable pension outcomes for the future. That is where we can start to learn from other countries. When I was in the Department for Work and Pensions, I was interested in what is done in Japan. Dare I say, if I end up doing another PhD in the future, it will probably be on how pensions are part-funded in Japan, recognising its ageing demographics? We should recognise that that is the situation in our country, too. We should not be all doom and gloom about this issue. We need to innovate, but we can also look at what others have done to address it.

There is another really important thing. I started work in 1997 for a company called Mars Inc. where—it was little known to me; I did not realise how beneficial this was—I was on a final salary defined-benefit pension scheme with zero contribution. I did not have to contribute a penny. Over time, that did not stay affordable for Mars. I had not appreciated that benefit—I think to some extent that is why auto-enrolment is so successful—but in that job I learned the importance of making sure that employers are careful with how they manage pensions on behalf of employees and the role of the trustees.

We can think back to Robert Maxwell raiding pensions. I know that Mars sold a business to his company, and that went wrong in terms of the pensions. People may not be aware that pensions are not included as part of the TUPE process—they are specifically excluded, recognising how they could limit sensible company mergers and acquisitions—but I am conscious of how people may not really think about that until much later in life.

To return to the reforms and why they are necessary, the trustee is so important. I had hoped that we would have a “year of the trustee” campaign. Although being a trustee is an interesting role to have—I admit that I have never been one, although I have expressed interest in the past—it means being heavily involved in regulation. That could be overwhelming at times for people who may want to be a trustee because they believe in the people they work with and those who worked there before them, as well as being mindful of the future, but who are not necessarily well versed in all the ins and outs.

I know that the fiduciary duty is really drummed into trustees. For defined-contribution schemes in particular—where, candidly, there is no expectation of what the outcome will be—the hammering home of that fiduciary duty has led to a low-risk approach, which has been very low-cost but with very low returns. That is not what we should want. No wonder people are buying other homes and becoming landlords: they see a fixed asset, which they know they can sell in the future and on which they can make a reasonable expectation, whereas people putting money into their pension pots have no huge sense of what that could buy them in the future. We have changed the laws so that people do not have to put everything into an annuity, but it still is a matter of concern. I am conscious that there have been issues with the pensions dashboard, and I hope that the Money and Pensions Service will solve that. Perhaps the Minister can update us on progress in that regard. It is vital that people start to look at that now, not just as they are about to retire.

What are the benefits of the reforms, and why should there be sufficient professional advice? Those intermediary advisers often get significant fees, but still recommend that people go for gilts and pretty low returns. There is a different way. I hope that the reforms will start to be taken up by the industry, which asked for them, in order to take full advantage and recognise the issues ahead. We need to see the impact of the changes in legislation and the variety of consultations. We made the changes to improve prosperity for pensioners now and in future. I would be keen to hear from the Minister if there is any news on market trends in that regard. The local government pension scheme should lead by example. The Government have put greater demand on local government through levelling up, but is vital that we see that change.

There is a second part of pension schemes that is worth raising. I wonder whether Members know just how many trillions of assets there are in UK pensions alone. The answer is about £3 trillion. Organisations such as Make My Money Matter are trying to encourage people to use their future pension pot to ensure we have a thriving planet. I do not agree with the divestment approach, but it is important that companies invested in the energy of today are invested in the energy of the future. Without the support of pension funds, we will not get that necessary investment.

Pensions are a superpower for the prosperity of people and the planet. I was pleased when we introduced the regulations on disclosure of alignment to the Paris agreement. I would like to go further and encourage the Secretary of State to bring forward similar regulations to apply to nature. Work has already started—the Task Force on Climate-related Financial Disclosures made it happen for carbon. I think we were the first in the world to do that, by the way. We can do the same for nature. The Taskforce for Nature-related Financial Disclosures is a good comparison. The International Sustainability Standards Board is looking at that, and we are close to getting that outcome. I appreciate that the Minister may not have considered that recently and he may not be able to respond, but I encourage him to do that. We only have a certain amount of time, although I hope that as science allows us to live longer, we will claim our pensions for longer, so we want to ensure a prosperous future.

On the superpower element, I praise Nest, which has done a great job. It was set up just over a decade ago, and now manages a huge amount of money. There is even room for it to expand through consolidation, which the Pension Protection Fund could also look at. Nest is leading by example. As a pension firm that is starting to invest in the energy of the future with a substantial proportion of its funds, rather than rely on gilts and similar, Nest should be truly celebrated.

Although fiduciary duty must be the No. 1 priority, let us try to get more trustees to recognise that they are responsible for ensuring that the returns from DC schemes are as good as the benefits for members of defined benefit schemes. We need to release the market and protect people as we have done. Pensions being a superpower is not necessarily the sexiest thing to say in this Chamber, but it is one of the most important decisions that we have made in legislation in recent years. We need to continue that momentum.

--- Later in debate ---

[Mr Carmichael]

When I contacted the Speaker’s Office this morning, I was told there was only myself and the right hon. Member for East Ham (Sir Stephen Timms) down to speak, so I am delighted that we have had a good debate. We have had contributions from no fewer than 10 Members, which, given what is happening elsewhere today, is quite significant.

A number of Members made reference to the WASPI issue; I did not do so in the course of my remarks because it was not really germane, but it is a point well made and I very much associate myself with it. The ombudsman took long enough to get a report on that, and now we need to get on and honour it. Otherwise, what is the point of having an ombudsman in the first place?

The function and purpose of debates such as this is to ensure that the concerns of our constituents are heard in Government; the presence of the Minister on the Front Bench is an important symbol of that. The companies to which reference has been made, BP, Shell, ExxonMobil, Hewlett-Packard and Allied Steel and Wire, are some of the best known high street names in the country, and I hope that what we have heard in this debate will be heard also in the boardrooms of those and other companies. The people who run those companies should understand that we are watching what they are doing, that they have an obligation to treat their former workers and their pensioners fairly and that, if they do not have it within themselves to do that, we in Parliament and in Government will make sure that they have to.

Question put and agreed to.

Resolved,

That this House has considered pension schemes.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

On a point of order, Mr Deputy Speaker, I understand there are reports online of a veteran allegedly being prevented from using their veterans ID card, which is a Government-issued ID card, for voting today in the elections that are taking place across the country today. I am sure that will be of concern to Members across the House. A Government Minister has apparently made a public apology and said that they will try to get the issue resolved. I wondered whether you had had any notice of an urgent statement next week on the matter. It does seem bizarre, not least because current military identity cards can be used, and the card is a Government-issued document. I declare an interest as a holder of one of those veterans cards, but it does seem very strange and I hope we can get some clarity on this from the Government. Have you had any notice of such a statement?

[Mr Deputy Speaker (Mr Nigel Evans)]

I have had no notification from any Government Minister that there will be a statement today. As you know, at the end of proceedings today, we go into the May recess and we will be reassembling on Tuesday. I know that those on the Treasury Bench will make certain that your comments are made available to Ministers, in order that there can be a response.

British Sign Language Bill

Stephen Doughty Excerpts

Friday 28th January 2022 Commons Chamber

[Lilian Greenwood (Nottingham South) (Lab)]

As chair of the all-party parliamentary group on deafness, it is a great privilege to speak in this debate and to support the British Sign Language Bill. It has been a long road to get to this point, and the success of this Bill comes down, as has already been said, to some tireless campaigners.

I congratulate my hon. Friend the Member for West Lancashire (Rosie Cooper) on her work to bring forward the Bill and to win such wide cross-party support for it, and on her wonderful speech. Her contributions to the all-party parliamentary group have always been informed by her experience as a child of deaf adults. She has made no secret of how she was captured by the deaf community, as hon. Members have heard today. Her passion, knowledge and determination have underpinned the Bill and the negotiations to secure Government support for it. As the right hon. Member for Hemel Hempstead (Sir Mike Penning) and my hon. Friend the Member for West Ham (Ms Brown) have said, she has done her parents and the deaf community proud; I am sure many of my constituents who are members of Nottinghamshire Deaf Society will have been cheering her on.

Like my hon. Friend the Member for West Lancashire, I pay tribute to the British Deaf Association, particularly its chair David Buxton. The BDA has campaigned for decades in support of sign language legislation. Its work is a major reason not only that we are discussing the Bill but that the Scottish Parliament has already legislated in favour of British Sign Language. Similar proposals are at different stages in the Welsh Senedd and Stormont.

I also thank Rob Geaney and RNID for their support for the APPG and the campaign, which of course is supported by many other organisations and charities that support the deaf community and advocate for better communication, including SignHealth, the Royal Association for Deaf People, Black Deaf UK, the Institute of British Sign Language, the National Deaf Children’s Society, Signature and the National Registers of Communication Professionals Working with Deaf and Deafblind People.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I add my wholehearted support to this Bill and the efforts of my hon. Friend the Member for West Lancashire (Rosie Cooper). Like many hon. Members, I have campaigners in my own constituency, such as Stuart Parkinson, an activist for the deaf community with Cardiff Deaf Centre, but I also pay tribute to the work of the Association of British Sign Language Teachers and Assessors, which I have been honoured to be a patron of for some time. Interpreters such as Julie Doyle and Tony Evans can be seen on Welsh Government broadcasts, live with the First Minister and the Health Minister, interpreting in BSL in real time—in the room, crucially—and I pay tribute to them for all the work they have done for the deaf community and in supporting this Bill.

[Lilian Greenwood]

I thank my hon. Friend for his contribution. I am sure many of us want to thank people who got us to this stage.

Through my time as chair of the all-party group I have heard numerous and devastating examples of the barriers that we place in front of deaf BSL users. We have heard about the failure to think about accessibility in the design of public policy and public services, and how that limits the opportunities and life chances of BSL users. That is why I am pleased to support the Bill. I do so not just because it gives the deaf community and their language the status and recognition they deserve, although that is vital, but because the Bill provides sensible mechanisms to help Departments and public service providers overcome the barriers they create.

I wish to give a couple of examples that relate to accessing healthcare, the first of which is the refusal to provide a video relay service to contact the NHS. A VRS would have allowed BSL users to speak to health professionals remotely through a videocall with a registered BSL interpreter. But rather than commissioning a national service, the NHS failed to make provision, leaving many BSL users without access to their GP during the pandemic, when remote appointments became the default. At best, deaf BSL users were reliant on charitable support, provided by organisations such as SignHealth. Access to core NHS services should not be left to charities; those services should be provided as a right. My hope is that the guidance required by clause 3, designed and informed by lived experience through the non-statutory board mentioned in the explanatory notes, will provide both NHS England and local health commissioners and providers with the obligation they need to provide such a service, as well as the support and information on how to make it work for deaf people. The guidance across the NHS can help empower deaf people to manage their own health and improve the way they do so.

I also hope that the guidance supports the delivery of specialist mental health services. Through the all-party group, we know that too many commissioners think that providing interpretation for mainstream mental health services is sufficient. This guidance can make commissioners aware of the evidence showing that specialist services, delivered by those who understand deaf culture and the impact that being cut off from the hearing world has, are best for outcomes. There are countless examples of these barriers and how we fail the deaf community. The guidance should help us to remove the barriers we create across society, particularly in health and education services, and in the support we provide to deaf BSL users through jobcentres. That will really make a difference to their life chances and to outcomes.

I also hope the transparency and accountability created on accessible communications by clause 2 can drive a huge increase in the volume of accessible information in BSL, as that is another area where the deaf community are being let down. The high-profile failure to provide BSL interpretation at the initial covid press conferences is just one example, but there are many others. Deaf BSL users are forced to navigate complex information in their second language. How many of us who speak a second language would want to use it to apply for a passport, check our entitlement to benefits or arrange childcare vouchers on a site such as gov.uk? Why do we demand that nearly 90,000 of our citizens deal with these routine interactions with government based on an ability to use their second language? This needs to change, and information in BSL can empower deaf people to manage their own affairs and lead confident, independent lives. I hope that the required BSL report set out in clause 2 spurs on all Departments to meet the basic need to provide accessible information to the deaf community. Ministers can certainly expect to be held to account for their performance.

Today will be a momentous day for the deaf community when this Bill passes, as it is a really important step forward in the equality and equity that deaf citizens should be entitled to expect from their Government. Many people are out there in Parliament Square following this debate and waiting for news. I know that Members across the House will support the Bill, which will give the deaf community the recognition they deserve and the Government the tools—through the BSL report and the guidance—to improve the services provided to them. I hope the Minister and her Department will commit to a genuine process of co-production in how she works with the advisory body announced in the explanatory notes, empowering the deaf community to lead the change and create the society they deserve. As Craig Crowley, the chief executive officer of Action Deafness, commented this morning, “The principle of ‘nothing about us without us’ is the right one.”

The Bill should matter not just to the deaf community —we all benefit from creating a more inclusive and accessible society where everyone can fulfil their potential. I was reminded of that recently on a visit to Mellers primary school in my constituency, which, since September, has been home to Nottingham city’s focus provision for deaf pupils. It has benefited from having deaf students and ensuring that BSL is an integral part of school life. It was a real pleasure to hear that the whole staff team are learning BSL and that hearing pupils are becoming fluent in BSL, and to see the school choir singing and signing together. That inclusion should be the norm. The World Federation of the Deaf tells us that legal recognition of sign language promotes understanding in society and, in turn, better promotion of human rights for the deaf community. Today is a really important step on a journey towards a better and more equal society.

Universal Credit and Working Tax Credits

Stephen Doughty Excerpts

Wednesday 15th September 2021 Commons Chamber

[Chris Elmore (Ogmore) (Lab)]

On the face of it, today’s debate is about how we want to protect people’s incomes and stave off the threat of poverty for future generations but, scratching beneath the surface, we see what is really happening. The UK Tory Government have lost sight of what modern work means. They no longer understand the economy in which we live and how to implement policies that futureproof the world of work for tomorrow. In short, they have become stuck in the past, again.

When the Conservative party introduced universal credit, with the support of the Liberal Democrats, it heralded it as a panacea for poverty in the UK, but we have seen UC used as a vehicle for cuts to working wages. Today is no different. The former Chancellor of the Exchequer, George Osborne, repeatedly stoked the idea that those in receipt of welfare were out of work and should be punished, and that they should be ashamed of receiving additional support even when they were in work. Apart from being morally reprehensible, that is utterly wrong. Although the current Chancellor has better polish than the former, he is taking exactly the same path, a path that leads to poverty and the degradation of our local economies.

In my Ogmore constituency, we currently have 7,060 households in receipt of universal credit or working tax credits. Of those, 36% are in work, but the figure I want Ministers to listen to most carefully is that 4,731 children in Ogmore live in a home receiving universal credit. When Conservative Members vote this afternoon, I ask them to remember those 4,731 children whose families will face hardship. Those children have done nothing to deserve the cut that the Conservatives are pushing on their families, apart from being born into hard-working families who are often already working full time and just need this small piece of additional support that goes so far to ensure that their children can eat or live in a warm house. That is today’s modern Conservative party.

These numbers may seem abstract and distant, but each one represents a family who will lose £1,040 a year due to the decision made by the Chancellor and the Prime Minister. That in turn will snatch £7.3 million from my constituency, which is money that would have been spent in local businesses that in turn could continue to employ their staff and hopefully expand.

The pandemic has shown us the power of Government—the power of collective risk and shared reward. These are not just high ideals, they are policies that have been put into action by the Welsh Labour Government in Cardiff with self-isolation payments, financial support for utility bills, free financial advice and debt advice, the discretionary assistance fund, the covid-19 statutory sick pay enhancement scheme, the economic resilience fund and the most generous business rates relief anywhere in the UK. All of this has been done by a Labour Government who understand the modern world, the modern economy and modern household budgets. Comparing this forward thinking with that of the UK Government, we see a stark difference between a Welsh Government who care and a Westminster Government who have no interest.

The world of work is now more insecure, with a rise in zero-hours contracts and agency work being the main driver. The UK Government have rejected calls to overhaul this outdated system and make it one that rewards hard work. Instead, they cling to the outdated dogma that cutting UC will give people the incentive to earn more, despite the fact that many people in receipt of UC are already working full time. Are people meant not to care for their children or see their family? Are they meant to work every weekend? Is this the modern Conservative party?

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is making an incredibly powerful speech that very much reflects the experience of my constituents in Cardiff South and Penarth. Does he agree that these people are also having to deal with a huge increase in food, fuel and energy prices? We are seeing inflation at record levels, having jumped to the highest rate since 1997. These people are having to spend more of their income, at the time of this cut in UC, on food, fuel and other essential items.

[Chris Elmore]

I completely agree with my hon. Friend. Today’s figures show that the Government are out of kilter with what is happening to constituents across the land. Do Conservative Members not do a weekly shop like their constituents? Do they not see that prices are rising, whether on fuel or food? These things makes a huge difference, and the Conservative party is condemning families to have less in their back pocket as we approach the autumn and winter months. This afternoon Conservative Members will march through the Lobby and pretend it has no impact on their constituents. You could not make it up, Madam Deputy Speaker.

There are only so many hours in the day. Where are these people meant to find the hours to make up for the cut that the Conservatives are pushing through in the coming weeks? This is why we have seen poverty skyrocket across the country. The cut to UC is simply an old idea imposed on a new generation. If the Government were serious about tackling structural problems in our national economy, they would get to grips with low productivity rates and support investment led by communities, not Whitehall.

Yet again, the Government’s actions stand in stark contrast to their rhetoric. They claim to be levelling up—it would be funny if it was not so serious—but in truth they seek only a race to the bottom. Conservative Members will show their true colours again this afternoon in voting for stale economic thinking, whereas Labour Members will show a fresh alternative for the future of work.

Pension Schemes Bill [Lords]

Stephen Doughty Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Monday 16th November 2020 Commons Chamber

[Pete Wishart]

I am grateful to the Minister for reminding the House of the work that has been done. I am fully aware of what was discussed in that Green Paper, and I am aware of the responses. I want to come on to some of the longer-term issues, because those were not really addressed in how this was looked at, but that was a decent attempt by the previous Minister to get to the heart of this and pull it together. I encourage the current Minister not to give up and to look again at our amendments—I am going to try to convince him of this; we will see how we get on—because they are modest amendments that would help people who are caught in this nightmare. They are not a total solution, but our new clauses would considerably help those who have been caught up in all this.

New clause 5 would simply permit employers in a pension scheme closed to future accrual to apply for a deferred debt arrangement provided that they meet all the other tests. It would support those who are still trading prior to section 75 being triggered to use the easements before the closure of the scheme to be included. New clause 4 would allow the flexibility to waive a debt in certain circumstances to allow an employer to exit from a pension scheme where the debt is below a de minimis threshold, which the new clause would set at 0.5% of the fund value.

Those are sensible and modest proposals that would not cost the world to enact and would leave the integrity of these pension schemes intact. We know that the Minister is likely to oppose them, but I hope that he has a think about it, and perhaps there are things that he can do in subsequent legislation based on what is proposed. I know that he recognises the difficulty in all this, but he will offer no further easements beyond those already provided for in legislation. He also says that the

“current employer debt system is intended to be equitable to all employers”––[Official Report, Pension Schemes Public Bill Committee, 5 November 2020; c. 122.]

and insists that schemes must be fully funded, but setting a de minimis write-off at 0.5% will have a negligible impact on any of these arrangements.

There are other multi-employer schemes where there may be issues. It is staggering that there have been so few issues with these multi-employer schemes outside the plumbers’ pension, but I say to the Minister that this is more of a ticking time-bomb than a sleeping lion. There are consequences to come. Government failure to get this resolved when they had the opportunity with plumbers’ pensions will come back to haunt them at some point in the future. Introducing easements and partial solutions is all very well, but if the central issue remains unaddressed, there will be consequences for everyone involved in these schemes.

I will never forget the meeting when I was first made aware of this issue. I was utterly horrified that this level of debt was stalking plumbers like some sort of malicious apparition. I said to them then that I would do everything possible to ensure that this was addressed. Five years later, we have not been able to do that. It is now all down to the Minister. He can do something to lessen this burden on honest, hard-working men and women, or we can come back here in a few years with this misery still in place and this injustice still not put right. I still hope that he will consider the amendments that we have tabled this evening.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I rise to address a number of issues. First, let me say that I fully support the amendments tabled by my hon. Friends—amendment 16 and others—on climate change. With respect to some of the comments that were made earlier, we need much more radical thinking on this if we are to see the types of fundamental shifts that we need in our economy, not just in this country but globally—recognising, of course, that pensions are invested globally—to achieve the kind of action that is needed to deal with the scale of the climate emergency. That will affect the generations to come, just as, if we do not get pensions right, the generations to come will not have the resources they thought they would receive.

I want to focus my remarks on new clause 1 and amendment 14, which show the importance of improved guidance and consumer protections, and the clauses in the Bill that relate to the valuations of pensions schemes. These issues all matter and the protections—many introduced on a cross-party basis—are so crucial because of the scandals and scams that many right hon. and hon. Members from across the House have referred to. A range of measures are needed to clear up the weaknesses in our pensions systems and pensions regulation, which have led to huge injustices.

I want to talk briefly about two injustices that have affected people in my constituency over many years: the Allied Steel and Wire pensioners and the Roadchef employees. I thank my hon. Friend the Member for Neath (Christina Rees), and my hon. Friends the Members for Birmingham, Erdington (Jack Dromey), for Oxford East (Anneliese Dodds) and for Stalybridge and Hyde (Jonathan Reynolds) on the Front Bench, for their work to support action on these issues, in particular the meeting that we had recently with Allied Steel and Wire pensioners from my constituency. I also thank the Minister, who has been in conversations about this case with my hon. Friend the Member for Birmingham, Erdington. I am grateful to him for agreeing to meet us to discuss it further. I hope we can find the time for that in the weeks to come, because it needs to be looked at. It is a historic injustice that has affected many, many people who have waited many years for it to be resolved. The Secretary of State said on Second Reading that we need to tackle all those who try to plunder the pension pots of hard-working employees, which was very much what happened in both cases.

The campaigners and members of the Pensions Action Group, which include many former Allied Steel and Wire employees, have explained clearly—I am sure it has been spoken of many times in this House—how they lost the pensions they put into and expected to receive in retirement. This has affected workers from across the country: not only former workers at the Allied Steel and Wire plant in my constituency, but in locations such as Sheerness in Kent and in other businesses, such as the shelving giant Dexion, which were also hit. Those workers were helped and supported by the financial assistance scheme set up by the Labour Government in the early 2000s. That was followed by the establishment of the Pension Protection Fund, which still exists today to step in to ensure workers’ accrued defined benefit pensions are safeguarded when employers collapse. A fundamental issue, however, is that under the terms of the protection scheme, pension income based on service prior to 1997 is not eligible to be increased in line with inflation, unlike post-1997 service. The pension income of 140,000 workers who built their pension pre-1997 has not been protected from rising consumer prices.

I want to name the individuals who have campaigned resolutely on this issue for many years: John Benson, Phil Jones and many others. Alongside other Members, I have been with them to Downing Street and elsewhere to take their case. Essentially, they have devoted their lives to making steel, making this country great and supporting our infrastructure projects, yet they have been denied dignity in their retirement. Tragically, many are sadly passing away without having received what they were entitled to. They point out, quite rightly, that the type of restrictive legislation that has existed around their circumstances does not apply to, for example, the pensions of Members of Parliament who were elected prior to 1997, many of whom have moved on to the other place. We need to think about justice and equity in all these matters, particularly as we enjoy very generous pension settlements.

Many financial assistance scheme members currently receive only 90% of their restricted pension. That was what was achieved by the scheme and the agreement under the previous Labour Government. Unfortunately, because of the lack of indexation many are seeing their actual income drop below the 50% redress required under Hampshire v. PPF in September 2018. I recently spoke to a number of them and asked them to explain how the situation had affected them and their families. We have heard today of many other such instances, which not only have financial implications but cause emotional and family strain. I want to quote some of their own words, because they bear strong witness to the reality. One worker, who left school in 1961, aged 15, and started working at the steel company, told me, “For some years, the company paid into the pension scheme. I myself in those early years did not contribute, but then the ASW pension scheme was formed.” The workforce were called to the canteen on a number of occasions for meetings with the company’s directors and told of the plan regarding the new pension scheme, which they were told had the backing of the UK Government. The workforce were given all sorts of assurances that “it would secure a comfortable retirement for themselves and their families, and everyone to my knowledge agreed this was the right thing to do.”

We then fast-forward to 2002 when shift teams were called to the conference room and told by one of the receivers that the company would close and they would lose their jobs. One colleague had tears rolling down their face. The receiver told them, “The pensions we had saved and worked for were safe as they were not touching those funds”. One worker said, “I went home after my shift had finished and told my wife I had lost my job but the pension was safe, only to find out days later that there was a shortfall and that we could lose in the region of 85% of the pension. It put me on the verge of a nervous breakdown, and at one point I thought I would go over the edge. After all those years working in heavy industry with noise, dust, fumes and unsociable hours, I have nothing to look forward to.”

Unfortunately, I could recount case after case from Allied Steel and Wire pensioners. It is only a matter of natural justice that, as well as ensuring that such scandals never happen again, as measures in the Bill seek to do —and as much reform since that time has attempted to do, to ensure guidance and protections—we must remember those who did not and will not benefit from these changes. I look forward to discussing that case with the Minister.

Many Members across the House have signed early-day motion 802 on the Roadchef scandal, which has been going on for nearly 30 years and has involved 4,000 low-paid workers who saw millions illegally transferred from their funds and then £10 million taken in taxes. I express my sadness at the recent death of my constituent Tim Warwick, who was the company secretary who exposed the Roadchef shares scandal perpetrated by the former chief executive. I pay tribute to the former Member of Parliament for Monmouth, Huw Edwards, and the GMB trade union—I declare an interest as a member of the GMB—who have campaigned on this issue for many years. Sadly—and as we saw with the Allied Steel and Wire pension scandal—Tim Warwick and others died waiting for clarity from HMRC about what tax they or the trust should be liable for, despite Parliament’s clear intention that such employee benefit schemes should be tax free. Will the Minister therefore give us an update—either in his wind-up, or perhaps he could write to me—on the latest position of the DWP and HMRC on this matter, which has been of great concern to Members across the House? That is one of the injustices that led us to the point of needing to make the types of changes outlined in the Bill and the many amendments to it.

Many of the amendments and proposals put forward are about increasing the transparency, safety and security of our pensions, which we all want to see, as well as tackling scams and injustices in the pensions system. I add my support to the amendments tabled by my colleagues on the Front Bench and by my right hon. Friend the Member for East Ham (Stephen Timms), the Chair of the Work and Pensions Committee. In that spirit of tackling injustice, we need to recognise the damage done by robbing people of their life savings and of their and their family’s future. They paid in, they expected to get something out, and they have not. I mentioned two examples, but there are still far too many injustices for many pensioners. I hope that, in a spirit of cross-party working, the Minister and others will continue to try to find justice for all those affected, and particularly those affected by the ASW and Roadchef scandals.

Kickstart Scheme

Stephen Doughty Excerpts

Thursday 3rd September 2020 Commons Chamber

[Dr Coffey]

I appreciate my hon. Friend’s enthusiasm and endorsement. He is right to be enthusiastic about this opportunity for young people. The scheme is intended to take applications up to December 2021 to roll into summer 2022. Of course, this is just one element of our Government’s plan for jobs, but the ambition is unprecedented. I can think of a whole series of large employers in his constituency such as 3M and Waitrose headquarters who I am confident can join, but it is also bristling with smaller employers who I hope will be able to join the scheme, too.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

It is good to see the Secretary of State learning not only from the Future Jobs Fund example but the Jobs Growth Wales example set by the Welsh Labour Government over the past few years. It is so crucial that this leads to long-term employment, not just temporary employment, so will she agree to work closely with the Welsh Government to dovetail this scheme with the existing Jobs Growth Wales scheme, the apprenticeship scheme, the traineeship scheme and the ReAct scheme, which are already in place, to ensure that there is a full package for young people in particular to stay in work? Will she look again at the 30-person limit? SMEs are a much bigger part of the economy in Wales and we need to ensure that they are able to benefit as much as they can from the scheme.

[Dr Coffey]

The Government already have close relationships on aspects of trying to help people get into work. It is worth pointing out that the Welsh Labour Government’s own report into Job Growth Wales, published in June this year, found that the programme suffered from a lack of clarity and momentum. It does not matter who provides the support to get people into work, whether it is the Welsh Government or the United Kingdom Government. I want to make sure that we focus on the young people for whom it is intended, rather than some of the bureaucracy that may come in other ways.

Universal Credit: Managed Migration

Stephen Doughty Excerpts

Tuesday 8th January 2019 Commons Chamber

[Alok Sharma]

Different countries will have different welfare arrangements. It is important for us to have a welfare system that not only provides support but is sustainable and ultimately helps people into work. That the employment rate now is at a joint record high is testament to the work the Government have done, including on welfare reform.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The problem is that the individual cases keep coming and coming because of the Government’s failures on universal credit. A constituent contacted me because of an issue about early payment from her employer before Christmas. She was forced to go to a food bank—over Christmas! Surely, the Minister does not think that that situation is acceptable.

[Alok Sharma]

As I have said, we want to get this right for everyone, and where there are individual cases, of course we will take them up, but the hon. Gentleman seems to imply that, under the legacy benefits system, the world was entirely rosy. He and I know, as Members of Parliament, that the legacy benefits system is inferior to universal credit.

Universal Credit

Stephen Doughty Excerpts

Monday 5th November 2018 Commons Chamber

[Ms McVey]

My hon. Friend makes a great point. They have also been unable to welcome the extra 3.4 million people in work, a reduction of youth unemployment by 50%, and the record numbers of women into work and of BME—black and minority ethnic—people into work. I do not know what they would welcome.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The reason why we have these concerns is because of cases like this: a constituent of mine—a single mother of a terminally ill child aged 2—had her application for income support lost by the DWP, was then forced to claim UC, and while that was being considered all her benefits were stopped and she was forced to live on her son’s DLA and her carer’s allowance for her terminally ill son. Does the Secretary of State think that sort of case is acceptable and why is she pushing ahead given that cases like this have arisen?

[Ms McVey]

We have always said that we will deal with such cases. When fully rolled out, we will have up to about 8 million people here and we get it right most of the time for most of the people, but should something go wrong—and obviously something has gone wrong there—people come to their MP, which is only right, and then they bring the case to me and the Department and we get it right. But no system in the world is 100% right for 100% of people, and I apologise when it goes wrong, and then we will fight to get it right.

Employment and Support Allowance Underpayments

Stephen Doughty Excerpts

Thursday 18th October 2018 Commons Chamber

[Sarah Newton]

I absolutely agree with the hon. Gentleman that these are some of the most vulnerable people in society. That is why we have put in place everything that we can to reach out to them and make sure that they get the benefits they absolutely deserve to have, and where people, tragically, have passed away, that their families receive those benefits. I have apologised, the Secretary of State has apologised and the permanent secretary has apologised. This mistake should not have happened, and we are absolutely determined to sort it out as swiftly as we possibly can.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I am afraid that the Minister coming to the Chamber and praising the Department for good housekeeping is extremely ill-judged and inappropriate in such a serious situation. Of course, this is just the top of the hill. I have had vulnerable constituents waiting for up to a year, and receiving reduced payments or nothing at all. Before this scandal even came out, one of my constituents had to be paid £2,000 backdated, but only—like my colleague, my hon. Friend the Member for Bristol West (Thangam Debbonaire)—after my and my team’s intervention. Will the Minister tell us how many claims are allowed following an appeal, and how long is the current waiting time for those appeals?

[Sarah Newton]

The hon. Gentleman is now bringing up cases of people who applied for ESA more recently—I think that is what he is talking about—which is different from the people who were migrated across from incapacity benefit to ESA. Clearly, it is really important that we get the decision right first time for everyone. That is what we absolutely want to do: make sure that people applying for ESA are treated with respect and dignity, and get the right result.

I always look at the claimant experience, because behind every statistic is a real live person. The independent data shows that, when asked how they experienced the work capability assessment, over 90% of ESA claimants are satisfied. Obviously, some people, about 9% of people who apply for ESA, take their cases to appeal because they are not satisfied with the results. About 4% of those cases are upheld. Often, that is a case of more medical information being brought forward. I do not want there to be any appeals; I want to make sure we make the decisions right first time. That is why we put in place independent reviews and put in a huge amount of work to improve the work capability assessment and improve the benefit. [Interruption.] From a sedentary position, people are shouting out, “How long is the waiting time for appeals?” [Interruption.] I think the custom in the House is that Members rise to their feet to ask a question. [Interruption.]

Universal Credit

Stephen Doughty Excerpts

Wednesday 17th October 2018 Commons Chamber

[Margaret Greenwood (Wirral West) (Lab)]

I beg to move,

That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that the following papers be laid before Parliament: any briefing papers or analysis provided to the Secretary of State for Work and Pensions since 8 January 2018 on the impact of the roll-out of universal credit on recipients’ and household income and on benefits debts.

Universal credit, the Government’s flagship social security programme, has been beset by flaws in its design and delivery. It is causing immense hardship for many people wherever it is rolled out. It is hard to believe now, but universal credit was designed to lift people out of poverty and smooth the transition into work to ensure that it always pays. The reality is that universal credit is a vehicle for cuts: cuts in support for families with a disabled child for whom the basic rate of support is half what it is in tax credits; cuts in support for disabled people in work, such as the disabled person who wrote to us saying that they are more than £300 a month worse off since switching from claiming working tax credits; and cuts in support for lone parents bringing up children, who will get more than £20 a week less on average, with many losing far more.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

My hon. Friend is absolutely right to start with the issue on how universal credit is impacting on those with disabilities, the vulnerable and the unwell. I have a constituent who is caring for her disabled daughter and who has her own mental health problems. She was given the wrong advice by the Department for Work and Pensions and was left with £1,000 of rent arrears and universal credit not paid. What a shambles this policy is.

[Margaret Greenwood]

My hon. Friend makes the point so clearly: what a shambles and what a hardship for that family.

Oral Answers to Questions

Stephen Doughty Excerpts

Monday 2nd July 2018 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

18. How many appeals have been granted against initial personal independence payment assessment decisions in the last 12 months.

[The Minister for Disabled People, Health and Work (Sarah Newton)]

Data published by the Ministry of Justice last month shows that 57,000 decisions on personal independence payment claims were overturned on appeal in the last year. Of the 3.3 million decisions made since PIP was introduced, 9% have been appealed and 4% have been overturned. The average clearance time for PIP appeals in the last available quarter is 25 weeks.

[Sarah Newton]

It is not necessarily the case that the decision made was the wrong decision; mostly what happens is that more information comes forward at the appeal. Hon. Members should look at the data I have already given. One wrong decision is one too many, however, which is why we have done a great deal of work to improve our decision-making process.

[Stephen Doughty]

Far too many of my constituents face exactly the same situation, and far too many have found they get no points in their assessment despite being severely disabled and having previously been awarded for conditions such as multiple sclerosis, post-traumatic stress disorder and severe anxiety. Does the Minister agree with a constituent of mine who wrote to me last week and described the Department for Work and Pensions and Capita as

“so robotic, intransigent and hard-nosed, it’s hard to comprehend why they were constructed that way given the purpose for which they were intended”?

[Sarah Newton]

I respectfully point out to the hon. Gentleman that more people are receiving higher awards on PIP than did on the legacy benefit, disability living allowance, and people moving from DLA to PIP remain in payment while going through the process. I utterly refute what he said.

[Stephen Doughty]

What about my constituent?

[Sarah Newton]

The hon. Gentleman wants to talk about constituents. I was on “You and Yours” last week and, during the phone-in, a whole series of people called in about their PIP experiences. As he has made his point, let us hear what Jennifer from Lancashire said:

“As it happens, it has worked very well for me.”

She contacted the Royal National Institute of Blind People, which helped her fill in the form, and the

“result was I now get the top rate for both things…. I get £140 whereas I used to get £112.”