Pension Schemes Bill (Second sitting)

Steve Darling Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[Torsten Bell]

Q Given that you think that it is in savers’ interests to be well above the Mansion House targets, why have some people not got to those targets? Are they failing in their fiduciary duties? Why have they not got there yet?

Ian Cornelius: It is hard to speak for others, but scale is an important factor, as we have talked about. You need scale and sophistication to access these investment opportunities. NEST has that scale and is building that sophistication. It often involves quite innovative solutions and partnering. Partners want to partner with someone who has got scale and assets coming in at pace, and we have those things. There are some unique circumstances that have made it attractive for us. I will let Patrick speak for People’s, but it is on that journey as well.

Patrick Heath-Lay: Yes, we are, although we are much nearer the start of that journey. Again, it comes back to the scale point. Why is £25 billion or £30 billion about the right amount? Because it is about the right part that you can economically start investing in those items.

To answer your question, and to pick up a more general point, it is incredibly important that we work collaboratively on the issue, because, as an industry, there is not much point in us all sailing our own little boats around trying to find the right harbour to invest. There is a degree of collaboration that the industry, together with Government, can do to open up the opportunities where that investment needs to go and how it can be executed in the most efficient manner. The biggest risk with investing in private markets is that they are expensive. If the vehicles that are being used on a commercial basis are not sharing the economics of that investment well enough with savers, it will certainly not be an investment that we are interested in pursuing.

The other point is that putting down the foundations for this to be a pipeline of repeatable investment activity is critical. Because of its scale, NEST has got ahead of where we are today, but that is the phase we are in at People’s at the moment. There is over £1 billion a year from our scheme alone that will be invested in those markets on an ongoing basis. Given the scale that we are both experiencing, in terms of how we are scaling up, that will be an ever-increasing number, so it is important that we have reliable and very cost-effective routes by which we can deploy that capital.

Ian Cornelius: Going back to your original question, I think that the industry is moving in the right direction. The Mansion House accord had 17 signatories and we are seeing the right moves.

[Steve Darling (Torbay) (LD)]

Q Default solutions are an important part of the Bill. I suspect that, for the more modest savers, they will colour the outcomes for a lot of their pensions. How can the final offer in that area be enhanced so that we get the best outcomes? What tweaks would you make to the Bill to ensure that we are looking after those with more modest incomes, around these final solutions?

Ian Cornelius: There is no doubt that there is detail to work through across the whole Bill. One of the really interesting areas will be the interaction of targeted support and default solutions. There is now a consultation on targeted support, being led by the Financial Conduct Authority. That opens up lots of opportunities to provide an enhanced level of support to people who cannot afford to take advice. The fact is that financial advice is only available to about 9% of the population. Nearly all our members cannot afford to take financial advice, so they need that enhanced level of support, either to check that they are making the right choices—“Is the default solution the right one for me?”—or because they might have circumstances that mean that they want to explore something different. Targeted support is very welcome, and we look forward to engaging with the Pensions Regulator and FCA in making that a reality and making it work for low and moderate earners.

Patrick Heath-Lay: I am probably going to sound quite boring, but this is an area in which value for money and making sure the solutions are developed in the right way to support consumers can be really quite effective.

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[Luke Murphy]

Q What would be the challenges of that extension and scope?

Tim Fassam: We see it predominantly as opportunity. We are not saying that the rules necessarily need to change. We are just saying these new opportunities should be extended to a wider group of available schemes, but the infrastructure we are putting in place regarding workplace auto-enrolment savers can be utilised across the piece.

[Steve Darling]

Q The bar for small pots is currently set at £1,000. Is that ambitious enough? Should it be £2,000? £5,000? Or is it a matter of eating an elephant and having to be sensible about what is achievable?

Tim Fassam: I think eating an elephant is a very good way of putting it. I think £1,000 is certainly a good place to start. This will be an incredibly valuable part of the pensions ecosystem, but it will be complex and getting it right will require a lot of thought and a lot of close working between Government regulators and industry. Having that narrow and focused scope allows us to get it in place and get it working; then it would be perfectly reasonable to look at the level at a later date. For the time being, I think that is a very clear cohort of individuals who are likely to benefit from consolidation, because at the moment they are in uneconomic pools.

[The Chair]

I call Kirsty Blackman. Very quickly, please.

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[Mark Garnier]

Q So while we were all running around like headless chickens trying to figure out what was going on, you were saying, “We told you so. We knew that was going to happen.”

Michelle Ostermann: It is definitely something that was on our radar. When we build the investment strategy for an open DB scheme, such as those I described, it is quite different and less susceptible to that type of risk.

[Steve Darling]

Q I seek some clarification from Michelle. At the moment, there is a fee extracted to support your organisation. What if that fee were ceased?

Michelle Ostermann: I assume you are speaking of our levy?

[Steve Darling]

Yes.

Michelle Ostermann: We have several types of levies that support our organisation. If I may, I will just take a step back to help everyone to understand what role they play.

The PPF is not terribly well understood because we are a bit unique in this industry and there are only half a dozen bodies like us in the world. The UK is one of the few countries that have a protection fund such as this. In some ways we back as an insurer in that we collect premiums or levies from the industry from the 5,000 corporate DB schemes and backstop 9 million potential future members that still sit in those schemes. We collect the levies and hold them in reserve much like an insurance company. We are not an insurance company, but we do so much like they would mathematically and with similar models.

At the same time, if a corporation fails, we take its pension scheme, which is usually underfunded, and its orphan members and put them into a pension scheme. We are both a pension manager and an insurer of sorts. When there is a failure and a scheme comes to us with insufficient assets to make good on its pension liabilities, we take some of our reserves almost as a claim, and move them over to the pension fund so that it is fully funded at all times using a largely liability-driven investment-type strategy. The levies that we collect are twofold: first we collect a levy related to the risk of the industry. You may be familiar with our purple book and the industry-wide assessment we do. We monitor the risk of that entire complicated £1 trillion industry to decide how much to set aside as reserves.

Our reserves are often referred to as a surplus, but they are not a surplus; they are reserves sitting there for potential claims in 50, 80 or 100 years. We will be the last man standing in this industry. We are here as an enduring and perpetual solution. As long as there is DB in the industry, we will have to backstop it. We set aside those reserves for the 9 million members and current £1 trillion in case of future market environments that we cannot predict today. Those levies have been collected over 20 years from the constituents of that industry. We have collected just over £10 billion from that levy system and have paid out £9.5 billion of it as claims to the pension fund.

As those levies were coming in over that 20-year period we were investing them in an open DB growth-type strategy. As such, we have built up £14 billion of reserves and so now consider ourselves largely self-funding. We no longer need to collect that levy from the industry now that those reserves are sitting there—in so far as we can best tell with our models today. We prefer to reserve the right to turn it back on should we need it in the case of a market correction event, some unforeseen circumstance or an evolution in the industry. However, right now, those fees are no longer required by us; it is a risk assessment that is suggesting that.

[Mr Bedford]

Q Building on Steve’s question on the levy, some hon. Members have asked about surplus extraction feeding into the overall risk profile in the markets. Clearly, if that was to happen and there was perceived to be an increased risk, it could result in an increase in the levy. The Bill allows for the levy to be reduced to zero. What are your thoughts about that?

Michelle Ostermann: We have thought a fair bit about that. We do not see very many scenarios in which we would need to turn it on, although it is always difficult to predict. As you know, the industry evolves in many ways and over the 20 years we have seen quite an evolution, including the creation of new alternative covenant schemes and commercial consolidators. We will backstop those as well, and we will need to charge a levy for them. There could be an unforeseen market event, similar to that just described, so we need the ability to turn the levy back on—simply to keep it as a lever. Today, the legislation reads that if we were to lower it to 0%, we can only increase it year on year by 25%. However, 25% of zero is zero, so we are a bit cornered. We have asked for a measure that would allow us to increase it by as much as a few hundred million a year. The most we have ever charged in one year was just over £500 million.

As I said, we have collected £10 billion gradually over many years. The new measure allows us to increase it by no more than 25% of the ceiling number every year, which is currently £1.4 billion. That means we could go up as much as £350 million in a single year, if needs be. However, we are a very patient long-term investor. Even though we are taking on closed corporate DB schemes, we run it as if we were an open scheme, because we are open to new members all the time. As such, our investment strategy does most of the heavy lifting for our organisation now.

On our £14 billion reserves, we make over £1 billion a year in gains from that investment strategy, which funds the £1 billion we pay out in the pension scheme to members. We are now a mature organisation that should be able to maintain a steady state. The most we would be able to increase the levy by in one year is £350 million, but we would expect to be patient, wait a few years, and try to ride out the situation not needing it, only turning it back on should we need it. We consult before we turn it on and we take a lot of feedback on this. We are quite thoughtful, as we have always been, and I hope people agree.

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[Mark Garnier]

That is very helpful, thank you. I am very conscious that other Members will almost certainly have questions, but I must say that I entirely agree with you that a sum of money set aside for compensation should not be brought into the Government’s balance sheet.

[Steve Darling]

Q Have you done any reviews of the impact of enhancing payments to those in receipt of the financial assistance scheme? You alluded to some suggestions around VAT payments and tax payments if payments were enhanced. Have you engaged with any studies on that, and what that input may be?

Terry Monk: We have looked at all sorts of scenarios. I do not know whether Michelle is still here, but the problem is that, although the PPF has done all sorts of “what if” calculations about all sorts of “what ifs”—we have had copies, and the Work and Pensions Committee has had copies—we do know what the “what if” is. We know what our members have lost, but we will not know, until such time as we hear from the Government, what they are proposing. We have offered time and again to meet not just the current Pensions Minister, but previous Pensions Ministers—I have to say that a few of them would not even meet us. This Minister has met us, and he knows the issues, but we do not know what is in the mind of the DWP or the Treasury in dealing with this issue. Once we know that, we will know whether we are fighting or we are working together, and what the answer will be. To answer your question, there is a net effect benefit of paying that amount, but we are in the dark—we do not know how long the bit of string is.

Roger Sainsbury: Incidentally, one of the benefits of the cash coming in, supposing we do get indexation, is that it would at least make a contribution if the Government had decided they were also going to pay money to the FAS members. It would be a contribution to help offset the Treasury payments that would have to be made for the FAS.

Terry has referred to the situation, but I think the key thing is that in 2023 the Select Committee asked the PPF to provide financial estimates for what it would cost to do indexation. The PPF then produced some really excellent tables that showed a number of different hypothetical systems for delivering indexation. It was a bit like a restaurant menu. There was a possibility to have a scheme that would not be hugely beneficial, but that would not cost all that much money to administer, right through the range to a Rolls-Royce scheme, which would obviously cost a lot more money.

We have been asking for RIPA. Just to be absolutely clear, we are not asking for the grim reaper; we have had enough of him already, with people dying. This the bountiful RIPA—retrospective indexation plus arrears. We are pressing for that, but we did not invent it. It was not invented by the DPA. It was part of the menu that the PPF produced, and we merely picked it from the menu. RIPA is reasonably high up the menu, but it is not at the very top. There are other things that we are not asking for that we might have asked for, so we are not being greedy.

With respect to Terry, we are not bothering too much about what is in the PPF’s mind or in the Government’s mind. We are much more concerned with what we are trying to put into their mind. When we decided to go for pushing for RIPA, it was because RIPA is the minimum scheme of indexation that would have the effect of doing away with what is presently a two-tier membership within the PPF. There are two classes of membership: those with indexation and those without. There is nothing in the Bill making any provision for that. It is grossly unfair and it needs to be done away with, and it just happens that the RIPA option is the minimum way of getting rid of that deplorable two-tier membership. I think that gives you perhaps a fuller answer about the situation.

Terry Monk: Are we virtually out of time?

[The Chair]

We are not quite out of time, but I am going to call other Members to ask questions of the panel. I call Kirsty Blackman.

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[Torsten Bell]

Q The other thing to touch on is that all the pools are moving towards FCA authorisation. What is your experience of that? Obviously, you are further ahead than most.

Rachel Elwell: This is before I was employed to bring it to life. This is a decision our partner funds made really early, because they recognised the real benefits that can come from being FCA regulated. This is really important. We will hopefully be managing over £100 billion on behalf of the LGPS, and a good proportion of that is managed directly within my team. We are managing that for, hopefully, 18 different customers—effectively, investors and our owners. We need to have those disciplines in place, and we need to make sure that we are following those regulations. We do not need another regulatory set. There are already some very good, strong regulations that exist, so we, as a partnership and as a company, think that is the right thing to do.

[Steve Darling]

Q Thank you for coming today. Reflecting on the Bill as a whole, what would you particularly like to see weakened or strengthened in the Bill? What particularly leaps out at you?

Rachel Elwell: There are some fantastic provisions in the Bill, particularly around implementing the good governance review, and the clarity of roles and responsibilities between the different parties within the LGPS. About five or six years ago, we, along with some of the other pools, commissioned some work looking at good practice internationally, so talking to about 15 others—from Australia, the Canadians, the Dutch, the Norwegians—and looking at the journey they had been on with this. They are about 15 years ahead of us, really, with that policy. We wanted to learn from what they had done.

There were various success factors, some of which Michelle shared with you earlier, but one of those was real clarity about the Government’s policy intent, and I think the Bill really does help with that. That will help us, in turn, engage with our pensions committees and partner funds to make sure that we are providing a holistic joined-up view. There are some areas in the Bill where, particularly for the LGPS, the detail will be in the regulations. I would just make a plea, given the timelines we are working towards, that we see the regulations sooner rather than later, please. I have already said that I think it would be helpful to maybe get a bit more clarity on the circumstances in which we may be directed by the Secretary of State.

[Rachel Blake]

Q I used to be on a local government pensions committee, so I bring some of that experience to this question. The Bill talks about the merging of funds and what benefits that could have for savers and members, but it does not talk that much about administration. What impacts do you think that might have on local government pension administration—either positive benefits, or what risks you foresee that perhaps the Committee should consider?

Rachel Elwell: The primary focus of the Bill is the consolidation of the assets in pools, but there are provisions, particularly when we see some of the wider things that are happening in policy such as local government reorganisation, where that might lead to closer working between funds and potentially merger. I am fortunate enough—I think Roger Phillips mentioned this earlier—that Tyne and Wear and Northumberland are part of the Border to Coast pool, so I was there and living that experience with them personally. They were working very hard together, with very joined-up thinking and close relationships, and it was still fairly hard work.

I suppose from that perspective, like any merger of entities, it comes down to relationships and people. Administration in the LGPS is complex, and many funds have been facing recruitment challenges. What we are seeing already is funds working closely together. For example, again within Border to Coast, Tyne and Wear has recently taken on the administration for Teesside, bringing it in-house. It was previously an outsourced arrangement. There are benefits from that, but it needs to be done very carefully and thoughtfully—it is not something we should rush at.

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[Mark Garnier]

Thank you very much.

[Steve Darling]

Q I have two key questions. We have heard repeatedly in evidence today about questions to do with secondary legislation and guidance. As we go through the Bill Committee and further stages, what confidence do you have as Minister that you will be able to give some clear signalling to the industry about what is likely to be in that guidance and legislation, to drive the confidence it needs in the short to long term?

The other area that I want to ask about relates to the information that we heard from Nest: only 40% of its members had signed up online. That demonstrates that the issue is about getting positive engagement from those who are perhaps less financially secure. Are you confident that we are doing all we can through the Bill to help those who are most financially challenged? How are you going to hold yourself to account as we proceed to ensure that that is the case?

Torsten Bell: Those are great questions. On regulations, you are absolutely right. This pensions Bill, like most recent ones—although there have been exceptions that have come with unintended side effects, to go back to what was just mentioned—does rely heavily on secondary legislation. My view is that that is the right thing to do and is almost in the nature of pension schemes. That is partly because the detail should rightly be consulted on and partly because things will change in the context.

You are right that there is a large reliance on secondary legislation. Yes, in some areas, as we go through the detail, clause by clause, we will be able to set out to you where our thinking is up to. In lots of cases you will already see consultations by the FCA and TPR, starting to develop the work that will then feed into the regulations—that is particularly true, for example, on value for money, which we have just been discussing. I also think that it is important for us to provide clarity on when we will bring forward those regulations and when we will consult on the input to them, so that people know that. That was why, when we published the pensions reform road map, and when we published the Bill itself, I set out when we anticipate bringing forward those regulations so that everyone in the industry and in the House can see when that will happen. Page 17 of the road map sets out how we envisage that happening, and it is absolutely right. When we come to the clause-by-clause discussion, there will certainly be things where we will not be able to say, “This is exactly what will happen,” and rightly, because there needs to be further consultation with the industry on those things.

On the broader question of engagement with people, particularly those with smaller pensions—there is a very heavy correlation between the chance of someone being engaged with their pension and the size of that pension pot, partly for obvious reasons, but for wider context reasons, too—the pensions dashboard that Chris Curry mentioned earlier is a large part of facilitating that engagement. Lots of countries have had versions of the dashboard; it does make a material effect. One of the lessons from Australia is that the average size of DC pots, as they start to build rapidly—as that becomes the default system in an auto-enrolment world—does have a material effect.

I was with someone who runs one of the big supers recently; her view was that they hit a tipping point when there was suddenly this huge engagement where people were looking at the app provided by the super every week. There are pros and cons to that, by the way. Remember that there is a reason why we default people into pension savings. There are good and bad ways to engage with your pension. We do not want people on an app, in the face of a short-term stock market downturn, making drastic decisions to do with their investments that have long-lasting consequences. It needs to be done right; that is exactly why, when it comes to the dashboard, we are user testing it extensively.

[Kirsty Blackman]

Q I have two questions. If the Minister could just answer “yes” to the first one, that would be great. The Regulatory Policy Committee has said in its assessment of the impact assessment that the monitoring and evaluation plan is weak—it has used that word. It has said that more detailed plans are needed on monitoring and evaluation, outlining success metrics, reporting requirements and methodologies. Will the Minister commit to considering those and to updating us during the course of the Bill Committee about when monitoring might happen?

Torsten Bell: I am happy to take that away. Obviously, the monitoring will need to be different for different parts of the Bill, which are on different timelines.

Pension Schemes Bill (First sitting)

Steve Darling Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[John Grady (Glasgow East) (Lab)]

Q This question is for Ms Alexander. A lot of my constituents are driven mad by small pots; they have worked in different jobs and have no idea how much money they have saved for a pension, so please could you outline the benefits of the small pots reforms to people in my constituency, and the practical steps needed to make the small pots regime work—for example, by way of IT?

Zoe Alexander: The small pots reforms are absolutely critical. The problem of small pots was foreseen by the Pensions Commission years ago. We all knew we would face that problem with automatic enrolment, and I think people would agree that it has taken too long to grasp the nettle. We at Pensions UK are really delighted to see the measures in the Bill to deliver the multi-consolidator model. It is really important that the pot size is kept low, as is proposed in the Bill, at least initially, to solve the problem of the smallest pots in the market. Pensions UK has undertaken a feasibility study, working with Government, to look at how that small pots system might be delivered in practice. That work is publicly available. It gets quite technical quite quickly, so I will not go into the details of it, but we believe there is a feasible model of delivering the small pots solution at low cost—one that should not involve Government in a major IT build.

[Steve Darling (Torbay) (LD)]

Q We have already had some exploration of mandation and other opportunities around getting greater investment within the United Kingdom. I would welcome some more drawing out of how investing in UK opportunities could be amplified without the need for mandation.

Rob Yuille: We have both mentioned the Mansion House accord already. In addition to the ambition to which providers committed, there were a series of critical enablers. Several of those are in the Bill already—thank you for that—including value for money and the drive to consolidation. But there were other things in there as well, including the need for alignment by the Department for Work and Pensions and the Financial Conduct Authority of their rules and guidance in relation to the charge cap pipeline of infrastructure projects, which I know the Government are proceeding with separately; and the need to ensure that the whole market buys into the value-for-money framework. In the pension investment review, Government did not take forward regulation of intermediaries—employee benefit consultants and so on—and we think that they could keep that under review.

The Government are seeking to take other steps that will evolve over time, such as crowding in investments. There are examples such as the British Growth Partnership and the LIFTS scheme, where the Government are either convening or investing alongside providers, which we would like to see more of. Outside of DC, as has been mentioned already, it is about working with annuity providers on eligibility for certain assets.

[Kirsty Blackman]

Q There is a question around surplus release, and the power of trustees in relation to surplus release. It makes sense that there should be surplus release, but trustees may feel under pressure from employers to release the surplus when it might not be the right thing for scheme members. Do you think the Bill has got that balance right? How can that be monitored to ensure that trustees are not pressured when it is not the right thing for scheme members?

Rob Yuille: The most important thing is that trustees do have the power that is in the Bill—that power should stay there. Conflicts of interest were mentioned earlier; it is interesting what surplus release could do to make occupational schemes more like commercial schemes. With master trusts, commercial schemes and superfunds, if pension schemes could be run for the benefit of the employer by taking surplus, that gives rise to a different relationship and potential conflicts. The Pensions Regulator needs to be alive to that. In any case, TPR is becoming more like the FCA and the Prudential Regulation Authority as a regulator, and I think that needs to continue.

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[The Chair]

I call the Liberal Democrat spokesperson, Steve Darling.

[Steve Darling]

Q We have heard a little about value for money from the previous witnesses. I would welcome some reflections from you on how that could be shaped appropriately to allow risk taking without dumbing down the returns for members, because the crucial thing is driving maximum return without too much risk taking. I would welcome some reflections on how the proposed value for money terms could be tweaked in the best interest of investors, because it could force down returns significantly if people are playing it too safe.

Charlotte Clark: I will talk a little about the value for money framework and then specifically about your concern on risk. The value for money framework, which is an area we are working on very closely, will have three aspects to it. One is costs. One is, as you say, investment performance and investment allocation, and one is service. All of those will be important aspects of getting the value for money assessment right.

On the investment side, I hear the opposite charge, actually, rather than dumbing down. There is a sense that a scheme could take too much risk so that it looked like value for money, but there is a trade-off between risk and return. If you are going to do that, and if you have high-risk assets in a downturn, there is a possibility of volatility. Within all these schemes, you still have trustees, independent governance committees and professional advisers who make sure that the investment allocation is right for the saver. That is almost the first part before you get to the value for money assessment. I do not think there should be a dumbing down of investment.

One of the other challenges, which links to the move into private assets that has been raised a couple of times, is the possibility of pension schemes getting more involved in things such as infrastructure. One thing that the industry has asked us to consider is whether, when you invest in those sorts of assets, there is a J-curve in terms of the returns; there might be a suppression at the beginning as projects get up and running. We have been looking at the Australian examples and we do not really see that happening in their data, but it is something we are considering and we are talking to the industry about how to get it right. We do not want the value for money assessment to stop people being able to invest in those sorts of assets.

Patrick Coyne: Just to add that the competitive pressure on the marketplace at the moment is on cost, and cost is not value. To illustrate that point, for the average saver, a 1% increase annually in investment returns would generate a pot that is 20% bigger at the end of a lifetime of saving. We have to move the competitive dynamic, but implementation, as Charlotte said, is critical.

[Steve Darling]

Q The other element I just want to touch on briefly is whether you have any thoughts on educating firms’ trustees about what value for money really is? Quite often, as you have alluded to, it is the cheapest investment, rather than the one that gives the maximum return, that they might be seeing from the HR department of a company, rather than getting a broader perspective. That would be really helpful. Any thoughts around that world?

Patrick Coyne: I think bringing consistent comparable metrics that matter to the marketplace in a format that people can trust can start to drive competitive pressures on what matters, which is holistic value. Trustees—and across the Bill—want to do the right thing. They want to act in members’ best interests, but they do not have the tools for the job. The starting point is to provide them with quality information to act on that intent.

[John Grady]

Q With DC—defined contribution—schemes, as you know, savers themselves have discretion about where they put their money. The issue we face, illustrated by Dimson, Marsh and Staunton’s regular review of asset returns, is that people are not saving in things that will get them a long-term return, are they? The other issue we face is that there has been a real shift from public markets to private markets over the past 25 years or so. If you are not investing in those, you are missing out on returns that mean more money when you retire. I was just wondering, Ms Clark, if you could just put into context the work you are doing on the advice guidance boundary review and wider advice to savers, and how that will help pension savers and, therefore, help these reforms succeed?

Charlotte Clark: It is important to say that most people who are saving in a pension are probably saving in the default. When you say that they are choosing their investment, most of them are not. Whether it is the trustees of that scheme or whether it is the independent governance committee of that scheme, most people are going into that default, so the importance of the default is really crucial. While it is important to really think about engagement and talk about the advice guidance boundary review and some of the work that is happening there, it is also important that some people will not want to make those decisions. It is only people like us who seem to care about these sorts of things. Getting other people engaged in their investment is quite a challenge.

You are right that we are doing quite a lot of work, largely around the ISA area and the at-retirement area. One of the challenges at the moment is people taking money out of their pension and then putting it in cash. That may seem like a really wise decision if you are 55, but if you do not need that money for 20 years, it may keep track with inflation but you are going to miss out on asset returns, equity returns or other aspects of investment. So, we are really thinking about how we engage with people about those sorts of discussions. How can we make sure they are getting the right support? It comes back to the targeted support programme, which goes live in spring next year. So, working with providers at the moment on how they can support people when they are making these sorts of decisions, and just think about whether, if it is not full financial advice—I understand that can be very, very costly—are there other areas where we can give people help that is not as kind of extreme as that but allows people to think about those decisions in the round?

Patrick Coyne: I would just add that one of the reforms in the Bill around guided retirement is reflective of that default conundrum we face. We have a brilliant system—11 million more savers—but nobody making an active choice. That means that when people approach retirement, only one in five has a plan to access and when they do, as Charlotte said, half are taking it as cash. That cannot be the right outcome. Within the Bill, introducing a guided retirement duty enables those institutional investors to start to guide individuals or cohorts of members into the right kind of products for them, with clear opt-outs for them to choose a different way. As Charlotte said, the type of support and new form of regulated advice could really help inform savers and make good choices at that point.

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[The Chair]

I call the Liberal Democrat spokesperson, Steve Darling.

[Steve Darling]

Q Thank you both for coming. My questions are for Christopher Brooks. From your perspective at Age UK, what are the three wicked issues that the Bill could help tackle—the ones that come most often across your desk at Age UK, which people find a challenge in later life?

Christopher Brooks: That is a really good question. I think that first, I would flag the decumulation provisions, which are a really excellent idea. They are exactly what should be happening at the moment. Because it is a new regime, there are lots of challenges around designing and implementing it, which probably need quite a bit of thinking through, just to make sure we can get it right for members.

There are some tensions in that process: if you are defaulted into something at, say, 65, there would be some tensions around the point at which you should do certain things. I think the general consensus is that it will result in people purchasing an annuity further down the line—probably around, say, age 75 or 80. We have seen for many years, pre-freedom and choice, big issues with the annuity market, with people shopping around, or failing to shop around, to get a better deal. If you are encouraging people to do that at age 80, that is potentially a recipe for disaster. First, because people will be taking a decision that they are not familiar with, and it is alien to them. Secondly, at age 80, a number of people are experiencing cognitive decline, so it is going to be even more challenging than it would have been at 65. That kind of thing, exactly how it works, needs thinking through in more detail.

On that point, I still think that ultimately, if you are going to force people into the open market, you probably need some kind of clearing house, so that it removes the risk, because there will be scammers out there, listening to this session, I am sure, and rubbing their hands with glee at the thought of lots of people taking those decisions.

The second point is about the contractual overrides, which are clearly crucial to make the whole system work. I think we need to make sure that the best interests test is working for members. When I read the Bill initially, the thing that stood out most for me was that there seemed to be a lack of consumer protection at that point. When the provider undertakes the best interests test, if they are making an external comparison, they only have to compare with one other situation, one other scenario. That is what it says in the Bill. I do not think it is sufficient. I think the Bill should be amended, at least to say, “Make two comparisons,” or possibly to be a bit vaguer and say, “Make a reasonable number of comparisons,” so that it can be left open-ended and give a bit more scope for flexibility. That seems to be one area.

I think the best interests test needs to consider different classes of members as well. At the moment, it just looks at members as a whole, but there are different people in different situations within any scheme. For example, people approaching retirement are in a completely different position from people in their 20s or 30s, so any decisions about transfers need to make sure that all those interests are considered.

Probably the main point is about the independent assessor, who will then look at the best interests test and how it has been conducted and rubber-stamp it according to some FCA regulations yet to be written. We think quite strongly that the independent assessor should have some kind of fiduciary duty applied to them. I do not think there is any reason why this could not work, but at the moment they do not seem to be fully incentivised to act in the members’ interests or prioritise members’ interests above those of the scheme.

That is another really clear addition to the Bill that we think should take place. I think that would make the system so much more robust. There are potentially some really negative outcomes for members if they are transferred into inferior arrangements. I am sure it is not the intention of the Bill to do that, and it is probably not the intention of most providers, but it could still happen. I think putting some kind of fiduciary duty on the independent person would give this a lot more strength and make it fairly watertight for members.

[Damien Egan]

Q Christopher, a number of us are on the Work and Pensions Committee and we know that one of many big issues is people coming up to retirement and being prepared—even knowing how much they have got to take into retirement. How do you see this Bill—you have talked through some of the challenges—helping people to prepare for their future, know how much money they will have and make decisions at a better time?

Christopher Brooks: How the Bill tackles that is probably through the governance structures that will be put in place. When there is a fiduciary duty, the governance is reasonably strong. I believe it is stronger under a fiduciary duty than under the contract-based system. For example, the trustees are better placed than IGCs—independent governance committees. I think we will see IGCs potentially play a greater role in some of the transfers. That is an opportunity to make sure that IGCs can do their job more effectively and have better access to the necessary data, which was flagged previously by the FCA as not always being the case. Clearly they need to be independent, so it will not be appropriate to have employees of the firm sitting on them any longer. I believe a number of them do at the moment, but I do not think getting employees taken off will be an issue.

Once you are in retirement, you have a separate issue. Because the decumulation part of the Bill leaves a lot to the regulators to decide in the future, it has not been clearly specified how the governance will work, so there is an issue about making sure, when those regulations are written, that it does work well for people. There is clearly going to be a gap around information as well. We recently did some research with Aviva, and one of the recommendations was that we need some kind of intervention for people in their mid-70s about how they look after the rest of their lives and how they manage their pension. That kind of support is going to be crucial if people are expected to take a decision in their late 70s or early 80s with regard to annuitisation or how they draw down the rest of their money. There is a big gap there as well.

--- Later in debate ---

[The Chair]

I call the Liberal Democrat spokesperson, Steve Darling.

[Steve Darling]

Q Thank you both for coming. Reflecting on pensions systems around the world, what one silver bullet would you both say would help drive positive change through this Bill and strengthen it if applied to it?

Colin Clarke: That is a good question. Both our companies have recently been on various trips, to Australia, in particular, and there are various references in the Bill impact assessment to measures that are being or have been done there. One of the key learnings is around improving adequacy. In the round, there are lots of measures in the Bill that will help achieve that—for example, the introduction of the value for money test and the potential for better returns. One of the learnings we took away was around Australia’s “Your Future, Your Super” test, how they define value for money and how appropriate it is to set certain benchmarks. What are the risks if you do set those benchmarks, like the risk of investment herding and things like that? I think the value for money framework, if it is done right, has the potential to improve outcomes for members.

Contributions, obviously, is one big thing—I know that is not in the Bill. The Pensions Commission is going to be looking at that for adequacy in the round. I think that the measures around performance and value, and ensuring that the focus shifts away from cost to value, are among the key things that the Bill will seek to deliver.

[Alice Macdonald (Norwich North) (Lab/Co-op)]

Q My question is related to that. Aviva, in your written evidence, you spoke quite a lot about the value for money framework. Could you expand on what you think the benefits and challenges are? You also referred to the Australian regulator’s model, in terms of learning. You have already covered a bit of it, but if there anything you could add on what we could learn from that model about incentivising investments in the right areas, that would be great.

Dale Critchley: What we have heard from Australia is that the thing to avoid is regulator-defined targets, which will probably lead to herding, and can lead to schemes avoiding certain investments. For example, in Australia, property includes social housing and commercial property, but there is one benchmark for everything. So pension schemes do not invest in social housing, because they cannot achieve the benchmark through investing in social housing, as the benchmark is common across all property. Those are things to watch out for.

The other piece is that if you have set benchmarks, people will look to achieve the benchmark and not exceed it—they do not want to be the white chicken among all the brown chickens. Those are the things to avoid, in terms of the value for money benchmarks.

Oral Answers to Questions

Steve Darling Excerpts

Monday 1st September 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Steve Darling (Torbay) (LD)]

Around a year ago, the Labour Government inherited from the previous Conservative Government around 3 million pensioners in poverty. Sadly, last winter’s cuts to the winter fuel payment saw many pensioners pushed into hardship. In the light of winter fuel price hikes, will the Minister reconsider the Government’s proposals and ensure that moneys are paid to pensioners who missed out on the winter fuel payment last winter?

[Torsten Bell]

I thank the hon. Member for his question, but would gently say that every time he opposes every single tax rise or any difficult choice in this House, he is saying that the Liberal Democrats are not a party that could deliver on commitments, for example, to the triple lock, which will increase in cost, as my right hon. Friend the Secretary of State mentioned earlier, by £31 billion by the end of this Parliament. There are things called “choices”, which are necessary if we are to provide for our top priorities—and for Labour Members, the top priorities, when it comes to pensioners, are making sure that we can increase the state pension, the bedrock of most pensioners’ living standards, and saving the NHS, and that is exactly what we will continue to do.

--- Later in debate ---

[Steve Darling (Torbay) (LD)]

The Government are right to want to see more people with disabilities and long-term sickness get into work. Sadly, this was used to justify the savage cuts to benefits that were proposed earlier this year. My colleagues and I are hearing reports of cuts to current awards through Access to Work, and to new payments, being done by the back door. Can the Minister cast any light on whether guidance has been given to civil servants on such cuts?

[The Minister for Social Security and Disability (Sir Stephen Timms)]

There has been no change at all to policy on Access to Work. As the hon. Member knows, we did consult, in the Green Paper earlier in the year, on reform to Access to Work. There has been a big increase in demand for it, and reform is needed. We are looking at the consultation responses at the moment. There may have been instances in the past where the published guidance was not always properly applied. It is being applied now, and that may give rise to some of the issues that have been drawn to his attention, but there has been no change at all in the policy.

Welfare Spending

Steve Darling Excerpts

Tuesday 15th July 2025 Commons Chamber

[Steve Darling (Torbay) (LD)]

Children are 20% of our population in the United Kingdom but 100% of our future, and it is shocking that almost a third of those children are growing up in poverty. That is why the Liberal Democrats believe the two-child limit should be lifted, as well as the benefit cap.

There are 4.5 million children living in poverty in the United Kingdom. That is almost a million and a half more than the population of Wales, which is shocking in the 21st century. Some 44% of children live in a family where someone has a disability, which relates back to the conversations we have had about universal credit and PIP in recent weeks. The figure I have is slightly different from that of the hon. Member for Rochdale (Paul Waugh): 72% of children living in poverty live in a family where an individual is in work—people are in work, and yet their children are in poverty.

I reflect on a visit I made to a primary school in Paignton in the winter, where the headteacher said, “We have children who are coming into school cold, hungry and tired.” The impact of this on children is shocking. I represent the most deprived constituency that has a Liberal Democrat MP. The fact of the matter is that children do not choose to be born into large families, so having a benefits system that punishes those children is perverse in the extreme. This has been exacerbated by the cost of living crisis. Whether it is skyrocketing rents or utility bills, those are all significant challenges that have an impact on these youngsters.

The shadow Secretary of State, the hon. Member for Faversham and Mid Kent (Helen Whately), said that people have choices. What about a couple who choose to have three or four children, and everything is going well, but suddenly one of them is in an accident or contracts a significant disease that debilitates them, and their partner has to give up work to look after them and the rest of the family? That is not a choice; it is a sad circumstance for that family. We as a society need to make sure that the safety net is there to support them.

The Liberal Democrats have made a manifesto commitment to lift the two-child limit and the benefit cap, and it is not just us who believe this is the right way forward. The big four children’s charities believe this is the best, most cost-effective way to tackle child poverty. The Joseph Rowntree Foundation—a much loved organisation of mine—also believes this is the best way to tackle child poverty.

Childhood is a very short period of our lives. It is sad that the child poverty strategy has been delayed, but I hope it will emerge in the autumn. When I was the leader of Torbay council, we turned round children’s services from failing to good within two years. Part of that was ensuring that we used the whole of our orchestra of Torbay to support children: the Government’s biggest instrument is lifting the two-child limit and the benefit cap, because we desperately need to lift these children out of poverty.

Universal Credit and Personal Independence Payment Bill

Steve Darling Excerpts

Committee of the whole House & 3rd reading
Wednesday 9th July 2025 Commons Chamber

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Steve Darling (Torbay) (LD)]

Colleagues have described the events surrounding this Bill as “chaotic” and “shambolic”, and they were right to do so. Sadly, by failing to consult on key elements, the Government were setting up the Bill to fail. Moreover, the Government’s impact assessment is, I fear, somewhat misleading, because it bakes in cuts that the previous Government had planned, but not actually implemented. As a result, I am somewhat cautious of some of the Government’s figures.

--- Later in debate ---

[Steve Darling]

I really welcome the fact that disabled groups are going to be meaningfully engaged, according to the Minister’s proposal, and I look forward to seeing the full details of that, but how will carers’ groups be engaged as well? I would welcome some assurance on that.

[Sir Stephen Timms]

The hon. Gentleman raised that point very reasonably in the debate, and it is certainly something we need to consider as well.

Pension Schemes Bill

Steve Darling Excerpts

2nd reading
Monday 7th July 2025 Commons Chamber

[Steve Darling (Torbay) (LD)]

As the Liberal Democrat spokesperson, I will not disappoint the Minister: I assure him that broadly agree with an awful lot in the Bill. However, as we touched on in our meeting earlier today, there are some areas where we have concerns that are similar to those expressed by the shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), in more ways than one.

As Liberal Democrats, we want individuals to have confidence and be given the ability to invest in pension schemes that they know all about. We also want businesses to be supported to get their pensions out, supporting their employees. Elements of the Bill are about re-engineering to drive better outcomes for those who have pensions, which is to be very much welcomed, and about investment. We want to ensure that the individuals are front and centre of that support.

As others have said, we know that there are 12 million people who are not saving enough. In my own constituency of Torbay, some people have challenges just to get enough money to put bread on the table and cover their bills, and to save for a pension is beyond their wildest dreams. Reflecting on how we can drive that agenda of supporting people to make those changes around how they can save is absolutely essential.

My father was a haulage contractor—more commonly, a lorry driver—and self-employed. He saw the poverty that his father lived in, and in the 1980s he chose to save for a private pension, as Mrs Thatcher suggested. He put probably more than half of his income at times into savings, but because he was poorly advised, the stock market crashed and he was left with less money than he put in. That was horrific for him. Fortunately, the systems are now more protective of people who put into pensions, but that is a cautionary tale of what can go wrong. Ensuring that we support those individuals is absolutely essential.

As Liberal Democrats, we really welcome the development of larger pots, which will hopefully drive better outcomes for individuals. We know that in our more complex world of employment, many people will have small pots. While we welcome the idea of drawing these together in certain pots, we are not convinced that the pots should follow the pensioner rather than having certain pots that the Government would manage, but that is to be discussed elsewhere as part of the proposals before us.

The final area I will explore is investing in our economy, because growth is clearly absolutely essential. If our pension industry can be part of what oils the wheels of growth, that is to be welcomed. As Liberal Democrats, ensuring that we drive the social rented housing that is desperately needed and our high streets and see if those can be areas that benefit from investment is absolutely essential. However, we have concerns around mandation—colleagues have already raised this point, and I agree with them. The Minister has said positive things around mandation, and we look forward to unpicking that in Committee with him, but we believe that part of that is about ensuring transparency. As Liberal Democrats, we would like to ensure that there is clear evidence of how pensions are helping us to prepare for and tackle climate change in a positive way.

As Liberal Democrats, we want to ensure that the pensioner themselves is front and centre. We welcome the reorganisation, but driving that positive growth in our economy is absolutely essential as part of these proposals. We look forward to working with the Minister and his colleagues in getting this positive legislation through.

Universal Credit and Personal Independence Payment Bill

Steve Darling Excerpts

2nd reading
Tuesday 1st July 2025 Commons Chamber

[Steve Darling (Torbay) (LD)]

I associate myself with the speech just made by the hon. Member for York Central (Rachael Maskell). The Liberal Democrats will be supporting the reasoned amendment that we are now debating.

Over the past few weeks that the Green Paper has been under debate, some of the comments from Labour high command, such as describing Labour Back Benchers as “noises off”, have been disturbing in the extreme. People who should know better within the leadership of the Labour party described PIP as “pocket money”, which is utterly shameful. The way the Bill is being dashed through is equally shameful, and it decreases the credibility of Ministers. If the Bill is fine, it should have appropriate levels of scrutiny. We all know that rushed Bills are poor Bills, and the law of unintended consequences will come to haunt the Government if this Bill goes through.

As has been alluded to, this two-tier approach to the system is wrong. I and the Liberal Democrats have grave concerns that it is un-British, unjust and not the way of our world. We have heard the Minister saying that it has been done before, but that does not make it right. It is almost Orwellian that we will have a system where in our law we say that all disabled people are equal, but some are more equal than others.

[Neil Coyle]

Is the hon. Member saying that he regrets the Liberal Democrat-Conservative coalition establishing PIP and abolishing disability living allowance? The Leader of the Opposition gave the example of someone with Parkinson’s. Someone with Parkinson’s who is over 65 could be on DLA, PIP and attendance allowance. Does he regret that decision? Should that situation not exist?

--- Later in debate ---

[Steve Darling]

I thank the hon. Member for his contribution—his contributions are always good value.

What message does this Bill send to disabled children? We will be saying that those who have gone down the path of their disability degenerating to the extent that they can claim PIP will be over the line, but those youngsters who know they have a degenerative condition can look forward to no PIP under the Bill.

I reflect to the Chamber that PIP is often a passport to other levels of support, such as blue badges or rail cards, which give people the opportunity of getting out and living their best lives. Perhaps the most important passported benefit from PIP is carer’s allowance. We have grave concerns about this Bill’s impact on those families who will no longer benefit from carer’s allowance. They will be robbed of up to £12,000 a year.

Do not get me wrong; we as Liberal Democrats recognise that the benefits system is broken and needs resolving, but it needs, as we had in our manifesto, co-design with disabled groups and carers groups to make sure that we get it right for our people.

[Carla Lockhart (Upper Bann) (DUP)]

The Secretary of State has claimed that she is listening. Does the hon. Member agree that she is certainly not listening to many of her Back Benchers, nor the 86 disability charities that have said this Bill will harm disabled people? We all know that reform is needed, but when we talk about reform, there is no mention of the fraud that goes on within the system that is costing our country billions. Surely we should start with that and not impact on and affect the most vulnerable in our society. We will be voting against this Bill today for that reason.

[Steve Darling]

I agree with the hon. Member.

Let me return to the reasons why people are not in work—the root causes, and some of the challenges. People have come to my constituency surgery and said, “I have a long-term illness, but I cannot be fixed by the NHS because it is broken.” Until we have sorted out the national health service and the social care system, people will be trapped in long-term ill health, and that needs to be resolved as a matter of urgency. I have already banged on about this, but while we acknowledge that PIP is not an out-of-work benefit but a benefit that helps people to lead lives that many of us would take for granted, the reality is that the Access to Work scheme is massively broken, and that too needs to be resolved. While there are warm words—

[Ms Billington]

Will the hon. Gentleman give way?

[Steve Darling]

I am happy to give way.

[Ms Billington]

I thank the hon. Gentleman, but may I remind him that although the Access to Work scheme may well be broken, measures in the Bill and the “Pathways to Work” Green Paper deal specifically with how we should improve it for our constituents, many of whom rely on it as a way of ensuring that they can become fully able people, and able to work? If the hon. Gentleman votes against the Bill, the risk will be that that goes too.

[Steve Darling]

The Access to Work system has been here for years, and it continues to be broken. The Government could easily fix it, but they are choosing not to roll up their sleeves and engage in sorting it out now. Constituents have told me that they have almost lost their jobs because of what is going on here and now. We also need answers from the carers allowance review. Many pieces of the jigsaw must be in place before we push forward with these proposals.

Let me emphasise that this is a broken system, and we should not proceed until we have heard from that Timms review. We should not be abandoning some of the most vulnerable members of society. The Liberal Democrats will vote for the amendment, and if that is lost, we will vote against the second motion. We cannot help those who are already broken by breaking a system.

[Madam Deputy Speaker (Judith Cummins)]

I call the Chair of the Select Committee.

Welfare Reform

Steve Darling Excerpts

Monday 30th June 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Steve Darling (Torbay) (LD)]

The Prime Minister and many Ministers have identified that the benefits system is broken and its cost is skyrocketing, but balancing the books on the backs of the poor is wrong-headed in the extreme. The proposals today are a leap into the dark. My Liberal Democrat colleagues and I are really concerned that they are rushed proposals. Legislation that is rushed is often wrong, with unintended consequences. As the Member of Parliament for Torbay, I am concerned, as my Liberal Democrat colleagues are, about the disabled and long-term sick, their children, their families and carers.

There are some root causes. Our broken NHS and social care system needs to be resolved so that support is there for those most in need. Our Access to Work scheme is broken and needs resolving as a matter of urgency. There are some real challenges, so I hope that the Secretary of State will give some genuine answers. What consultation has she undertaken with carers? What cost shunting for our care and social needs system has she identified in the proposals? Finally, will she consider withdrawing these proposals so that there is adequate consultation and scrutiny to avoid any bystanders being hit?

[Liz Kendall]

I know that the hon. Gentleman cares passionately about these issues. He raises the urgent need to ensure that our NHS is back on its feet. We are beginning to make a difference, with waiting lists down for the first time in two years and with 4 million appointments—more than double we promised—created in our first year.

The hon. Gentleman talks about the failings of Access to Work. I absolutely agree: that is why, as part of the Green Paper, we are looking to reform it so that it is available to more people in future. We care passionately about family carers. As I said in my statement, existing PIP claimants will be protected as a result of the changes announced today, as will those carers whose carer’s allowance is a passported benefit.

We are also looking at the future of social care with the review by Louise Casey. We are bringing these changes forward because we do not think it acceptable that the UK has one of the widest disability employment gaps in western Europe, at 28%, which is much higher than Germany, France and Sweden. We think that is unacceptable and we want to change it. That is why we are making these reforms.

Disabled People in Poverty

Steve Darling Excerpts

Tuesday 17th June 2025 Westminster Hall

[Steve Darling (Torbay) (LD)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I congratulate the hon. Member for Poole (Neil Duncan-Jordan) on securing this extremely important debate. PIP is not an out-of-work benefit, as many Members have alluded to, or a benefit that gives people their best lives; it helps them to live lives that are bearable—that is the reality of it. It allows people to get through what many of us in the Chamber would think of as a challenging life, rather than actually living their best life.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

I spoke to Jacqueline from Street, who is unable to work and is absolutely desperate. Heartbreakingly, she told me that if her PIP is removed, she is prepared to take her own life. Does my hon. Friend recognise that the vital support that PIP payments provide to the most vulnerable in society is not a luxury, but a lifeline?

[Steve Darling]

My hon. Friend is right to highlight that. I have received, as I am sure many colleagues have, disturbing commentary from constituents, where people are already desperately worried, 18 months ahead of any reductions.

The Joseph Rowntree Foundation highlighted some key barriers around poverty. Members have already alluded to the extra cost of living, but one barrier that I am particularly alive to, as a disabled person who went to a special educational needs school myself, is the lack of ambition for youngsters. It was an exception in my school if someone did an O-level; the highest we were expected to do was CSEs. There is a significantly lower level of educational attainment for people with disabilities.

Hon. Members have already alluded to the barriers to getting into work. Those may be simple misunderstandings, because people with disabilities can do things; they may just have to do them a little differently. It was with great pleasure that I met earlier this week with Turning Heads, a community interest company run by Alan Tilley for people with learning disabilities—appropriately, since it is Learning Disability Week. Alan shared with us that 75% of people with learning disabilities are out of work and that 86% of those people want to work.

[Rachel Gilmour]

My hon. Friend reminds me of a remarkable institution in my Tiverton and Minehead constituency called Foxes Hotel, which trains people with mental disabilities to become employed in hotels and hospitality centres across the country. In fact, one young lady from Foxes works in our kitchens in the House of Commons. It is not all doom and gloom, but suffice it to say that Foxes is known within the disabled community as the Oxbridge of training—it is unique, and is not the norm. Did my hon. Friend know that?

[Steve Darling]

I am reminded of the gentleman who won “Strictly Come Dancing” last year, who said that what people with disability need is “opportunity, support and determination”. My hon. Friend’s example demonstrates that in spades.

I will not spend too much time discussing Access to Work, but it is a broken system. It should be there to support people, but it undermines them through massive delays in assessments. In south Devon, businesses that support people have closed down because they are owed so much money. The No Limits café in Newton Abbot closed because of a lack of money, due to the arrears owed to it by Access to Work.

I am concerned that Ministers are getting confused—I will be extremely upset if they do so today—about employment and PIP. They should not be confused. PIP is purely about ensuring that people can live what many of us would see as normal lives. I represent the most deprived community with a Liberal Democrat representative, Torbay, and I am concerned that the cuts to PIP will see cash sucked out of some of our most deprived communities across the country. That is money that would go to people doing support work such as cleaning, helping people to go shopping, taxis and so on being sucked out of what are already our most impoverished communities. There are some real challenges there. The real killer is that 150,000 carers could lose support funding—£12,000 per household. That will push people deeper into poverty and further into destitution.

[Neil Coyle]

Can the hon. Gentleman remind us whether the disability employment gap and the disability poverty gap rose or fell when his party was in government?

[Steve Darling]

I thank the hon. Gentleman for that intervention—I always look forward with great relish to his interventions.

I am concerned at the lack of consultation around the cuts. That is perverse. I am also concerned that the Government may be rushing the proposals through, perhaps even without a Bill Committee, but rather a Committee of the whole House. Will the Minister assure us that the Bill will receive appropriate scrutiny?

Mother and Baby Institutions Payment Scheme: Capital Disregard

Steve Darling Excerpts

Tuesday 10th June 2025 Westminster Hall

[Steve Darling (Torbay) (LD)]

What a pleasure it is to serve under your chairmanship, Ms Jardine. I congratulate the hon. Member for Beckenham and Penge (Liam Conlon) not just on obtaining this debate here today, but on the extremely important campaign that he has led the charge on. When we get elected as an MP we think, “What am I here for?”. It is about agency, and it is about seeking justice for our communities. The community of 13,000 women across the United Kingdom deserve that justice.

I will reflect on what we have heard in the debate and the forced adoption that was inflicted on those youngsters. I was not aware that Philomena had had her son Tony for three years before being forced to give up her child.

--- Later in debate ---

[Christine Jardine (in the Chair)]

The new finish time will be 4.12 pm.

[Steve Darling]

Just before the Division, I was looking to talk about trauma and the significant impact that it has had on those young women’s lives. We know it may have impacted them for their whole lives, and as Liberal Democrats we feel that justice must be served, and without delay. I look forward to the Minister giving some hope to those who could benefit from this system concerning how it could be put into action—hopefully in a matter of months, rather than years.

I have an admission to make: I have never seen the film “Philomena”—probably because I would find it too upsetting, having been adopted myself. Between 1949 and 1976, 185,000 children went through a system within the UK where a culture of adoption existed around certain mother and baby units up and down England and Wales. Jon Holmes, who many of us will know from Radio 4 comedy, did a very good “File on 4” programme on the impact on those individuals, particularly the mothers. Although he was adopted, he never found his birth mother.

I was very fortunate: although I was adopted in Birmingham, my parents, Eric and Penny, who were outstanding adoptive parents, moved down to Torquay. About 15 years ago I found my birth mother, Pam, living only nine miles from Torquay. We meet regularly and have had Christmas dinner together, but it is evident how what she went through with losing me has left her with trauma and an emotional scar throughout her life. I am sure that that was also the case, if not amplified to a large extent, in the mother and baby units in Ireland, where there were significantly more state-sponsored institutions involved in the forced adoption and forced labour, and a sense of shame on individuals.

We need to see that justice is brought to bear on this situation. We need to see Philomena’s law enacted. Capital disregard was applied in relation to the 7/7 terrorist attacks and the institutional sexual abuse of children. In recent months, the same principle has been applied in respect of tainted blood; that measure has only recently gone through the Commons. I implore the Minister to ensure that we drive Philomena’s law, as a matter of urgency, and let it take flight.