Local Housing Allowance Rates

Debate between Viscount Younger of Leckie and Baroness Janke

Wednesday 22nd February 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

Yes. My noble friend makes a good point, and it may well be that better communication is required. I will certainly look into that. However, local authorities, as I said earlier, have broad discretion to spend in line with their local priorities, supported by the non-statutory guidance provided by my department. That provides a list, crucially, of priority groups to assist with their decision-making. Obviously, that needs to be informed perhaps by better communication in terms of where the needs are. There is no evidence that it is not working, but I will look at that.

[Baroness Janke (LD)]

My Lords, there is evidence that the freezing of the local housing allowance affects families most severely, particularly those subject to the benefit cap and, most particularly, lone families. In his reply to the noble Baroness, Lady Lister, the noble Viscount mentioned the importance of targeting resources where they are needed. How can he justify this policy given that we know what the effect will be?

[Viscount Younger of Leckie (Con)]

I would answer that by saying that it is not a question of justifying it but of looking at the whole way in which we are helping people at the moment. That is why it is worth reminding the noble Baroness that, for example, working-age and disability benefits will increase by 10.1% in 2023-24, which I will be speaking to later in the Moses Room. In addition, the benefit cap will be increased in line with CPI. We understand the pressures that people are under and that is why we will also deliver further cost of living payments worth up to £900 for claimants on means-tested benefits, £300 for pensioner households and, as I mentioned yesterday, £150 for those on disability benefits.

Social Security Benefits Up-rating Order 2023

Debate between Viscount Younger of Leckie and Baroness Janke

Wednesday 22nd February 2023 Grand Committee

[Viscount Younger of Leckie (Con)]

In which case, I apologise. I would normally take note and come back with some answers. Of course I will include the noble Baroness; in fact, I will include any Peer who has taken part in this debate in my letters about anything that I am not able to answer.

The noble Lord, Lord Davies, and the noble Baroness, Lady Sherlock, said that the Government need to be clear about why we are raising the guaranteed minimum pensions by 3%. For the pre-2016 pensioners, the Government meet the difference; for post-2016 pensioners, we do not—however, these people benefit from transitional protection. I hope that gives some form of an answer.

The noble Baroness, Lady Sherlock, raised communication. A fact sheet covering the policy change was published on GOV.UK in August 2021—I see that she is nodding at that—which invited people to write to the department if they wanted an explanation of how they had been affected by the policy change. One request for compensation has been received so far, which is interesting. As of 25 January, we do not yet know the outcome of that claim, but I hope that provides an answer.

The noble Baroness also asked about the benefit cap increase linked to child poverty. As she will know, the Government are fully focused on tackling the root causes of poverty, such as children’s education and parental worklessness, to improve the lives of people in our country. She will know that the best way of doing that is for us to have a strong economy and get people into work. As mentioned earlier, the proposed levels will mean that households will be able to receive benefits up to the value of gross earnings of around £26,500, or £31,300 in London.

The noble Baroness, Lady Lister, asked about low pay and whether the Low Pay Commission—the LPC—would include in its deliberations the adequacy of benefit rates. I thank the noble Baroness and will draw the Treasury’s attention to that.

There are a number of other questions that I need to answer, but we probably need to draw a halt, as time is running short.

[Baroness Janke (LD)]

Please can I have some answers to my questions, perhaps in writing?

[Viscount Younger of Leckie (Con)]

Yes, of course. To conclude, I beg to move.

Disabled People: Impact from Policies and Spending Cuts

Debate between Viscount Younger of Leckie and Baroness Janke

Tuesday 21st February 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

The noble Baroness raises an important point. I think it might be helpful to remind her that the Minister for Disabled People announced on 1 December last year that a new disability action plan will be consulted on and published in 2023. The groups the noble Baroness mentioned will be part of that. It will set out the immediate action the Government will take in 2023 and 2024 to improve disabled people’s lives, as well as laying the foundations for a longer-term change. The plan will reference the work already being taken forward by individual government departments, but I know that there is more to do in this area and she is right to raise it.

[Baroness Janke (LD)]

My Lords, a decade of tightening eligibility for out-of-work sickness benefits on top of cuts to rates means that disabled people are now far more likely to be found incorrectly fit for work than awarded benefits they do not need. When will the Government take action to do something about this injustice?

[Viscount Younger of Leckie (Con)]

We certainly keep this under review. The noble Baroness will know that SSP is administered and paid entirely by employers, at a rate of £99.35 per week. Employers are required to pay it, but as I say, this matter is kept under constant review.

Food Banks

Debate between Viscount Younger of Leckie and Baroness Janke

Monday 9th January 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I echo what I think these Benches have said before: trade unions have a valuable role in our life. We have provided cost of living support worth over £37 billion for 2022-23, including the £400 non-repayable discount to eligible households provided through the energy bills support scheme. In addition, as the noble Lord will know, we have the energy price guarantee, which will save a typical British household around £900 this winter. I am sure there is more that we can do, but we are very aware of the issues.

[Baroness Janke (LD)]

My Lords, I too welcome the Minister to his new role, and I am grateful to hear that there is a survey about the use of food banks. As more and more people become dependent on food banks, it is quite clear that the 832,000 children using them are not receiving the sort of diet they need for their intellectual and physical development, and that emergency food cannot provide the balanced diet that the Government recommend. What specific measures will the Government take to ensure that children in poor families are not even more disadvantaged by not receiving adequate and proper nourishment for their development?

[Viscount Younger of Leckie (Con)]

The noble Baroness is right that nourishment for children is incredibly important, including in schools. She will know that we have extended free school meals to more groups of children than any other Government over the past half a century, and we remain committed to supporting the most disadvantaged children. Under the benefits-based criteria, 1.9 million of the most disadvantaged pupils are eligible for and claiming a free school meal. As she will know, this extends to around 1.25 million more infants, so it covers that area too.

Direct Tax and National Insurance Contributions

Debate between Viscount Younger of Leckie and Baroness Janke

Tuesday 25th October 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

We all wish the new Prime Minister well. I personally congratulate him on his victory and, as he said himself, he has a hard task—and more. But to answer the noble Lord’s question, certainly on the non-dom side, they play a very important role in funding our public services, and the rules were changed on non-doms, to bring an end to permanent non-dom status.

[Baroness Janke (LD)]

My Lords, do the Government believe that taxation should not only be fair but be seen to be fair? If so, are the Government still planning to scrap the cap on bankers’ bonuses? Does the Minister agree that this is not only unjust and unfair but an insult to so many people who are paying soaring mortgages, food and energy costs and struggling to feed their families?

[Viscount Younger of Leckie (Con)]

I do not know of any plans to change the current position, which is that the cap was raised on bankers’ bonuses, and I may say, having had a long career in the city, that I think it is a very good thing. The reason for that is that we are in a position in London to recruit the very best bankers from around the world who generate income for the UK, and they pay more tax into the Treasury, so it is a very good thing.

Public Service Pensions and Judicial Offices Bill [HL]

Debate between Viscount Younger of Leckie and Baroness Janke

Report stage
Monday 29th November 2021 Lords Chamber

[Viscount Younger of Leckie]

My Lords, this second group consists of three technical areas of amendments. I reassure the House that my remarks will be somewhat shorter than on the previous group. As before, I will set out the key themes in each area, rather than talking through the detail of each amendment. The three key themes these amendments relate to are: first, matters concerning voluntary contributions; secondly, flexibility in delivering the remedy in respect of judicial scheme members; and, thirdly, the closure of old schemes. Once again, I will be happy to turn to specific amendments if your Lordships have any questions they would like to raise.

Before I turn to the first area of amendments, which relate to member voluntary contributions, I thank the noble Lord, Lord Davies of Brixton, to whom I am most grateful for raising this matter in Grand Committee, which has assisted the Government in developing these new amendments. I gave the noble Lord assurances in Grand Committee that the Government would consider how the Bill should provide for members who were prevented from making voluntary contributions to the legacy schemes as a result of the discrimination that arose, and I am pleased to be able to bring forward amendments to that effect now.

First, these amendments insert new clauses so that scheme regulations may allow members to enter into remedial voluntary contributions arrangements where they would have done so had the discrimination not arisen. Additionally, the amendments ensure that information that must be provided to members includes information about remedial voluntary contribution arrangements as well as details of the eligibility criteria and the process for entering into those arrangements.

Secondly, these amendments will amend Clause 18 to ensure that the provisions work correctly in relation to persons other than a member who may obtain rights in relation to a member’s voluntary contributions.

Thirdly, the amendments clarify that, where compensation is paid to members of the judiciary representing an amount that was paid as voluntary contributions less the tax relief they received at the time, any rights that were associated with those contributions are extinguished. The amendments also clarify that, where the member is deceased, the compensation should be made to the member’s personal representatives.

Finally, the amendments add a new clause to provide that no new arrangements to pay voluntary contributions may be entered into after 31 March 2022 in a legacy scheme. This reflects the fact that the legacy schemes will close on that date. However, any existing voluntary contributions arrangements that members may have entered prior to 1 April 2022 may continue. Additionally, this prohibition does not apply to the new clauses which permit members to enter into remedial voluntary contributions arrangements in the specific circumstances I have set out.

Let me now turn to the second area of amendments in this group. These are technical amendments required to ensure the remedy can be applied most effectively in respect of judicial scheme members. Clause 65 defines the election period as a three-month period beginning with such date as is specified by the relevant authority and that the relevant authority may extend the election period in relation to a particular person, if they consider it just and equitable to do so.

It is important that judges in scope of the remedy have enough time to make an informed decision regarding their scheme membership for the remedy period. Therefore, amendments are made to Clauses 65 and 60 to provide for further flexibility to respond to judges’ individual circumstances by allowing for there to be more than one election period, and for an information statement to be sent to each member before the start of their respective election period.

Finally, I come to the third and final area in this group. This last area amends the valuations and governance framework for public service pension schemes to ensure that it operates correctly when old schemes established under the Public Service Pensions Act 2013, or its Northern Ireland equivalent, are closed and new schemes are established. In the present context, these amendments are most relevant to the reformed judicial pension scheme that is set to replace the 2015 scheme. However, the same issues will arise if, in future, other schemes are closed and new ones created.

Schemes that are closed to future accrual do not require future stand-alone valuations. A new clause will ensure that these are no longer required and that an employer cost cap need not be set for the purpose of measuring changes in the costs of those schemes under the cost control mechanism.

The new clause will also allow existing governance frameworks to be carried over from old schemes to new schemes. Additionally, an amendment to Clause 80 will ensure that the cost control mechanism can operate correctly by ensuring that the employer cost cap of a new scheme can be set after the regulations have been created.

I hope the House will agree that, important though they are, all three sets of amendments I have outlined in this group make necessary technical changes to the existing legislation so as to ensure that the remedy can operate as intended. With that, I beg to move.

[Baroness Janke (LD)]

My Lords, I thank the Minister for responding to many of the issues that arose in Committee and welcome the additional flexibility with regard to the voluntary contributions and the period when remedial contributions can be made.

I would like to question the eligibility for voluntary contributions. One of the areas we discussed was about people—for example, with caring responsibilities—who would wish to make up their pension and in their legacy scheme would have been able to do that. Examples include women who have taken time out to look after children or people with caring responsibilities who have done the same. Will these members have the chance to make these remedial contributions to augment their pensions, as they would have been able to within the legacy scheme? Perhaps the Minister could clear that up for me.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, once again I thank the Minister for his explanation of this group. We are content for these changes to be made to the Bill. I particularly welcome the provisions on voluntary contributions, which will now allow for a member to make voluntary contributions where they would have done, but did not due to the pension changes that led to the arising discrimination. This responds to a concern raised by pension schemes and by my noble friend Lord Davies in Committee, which was recognised by the Minister. I wonder whether the Minister can give us an assurance that more information will be forthcoming, over the Bill’s passage through the Commons, on how this will be provided for in practice.

I also welcome the provision providing flexibility for judges over their election period and that every member must be provided with an information statement by the scheme before their election period starts. At later stages this afternoon we will come back to this question of how information and guidance are provided to members and how they will access support. That is in an amendment to be moved by the noble Baroness, Lady Janke. I am glad to see that this has been recognised, at least to some extent, in this group. We are happy to support these amendments.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, I am very pleased to be able to debate this important matter. As the noble and learned Lord, Lord Hope, and the noble Lord, Lord Ponsonby, said, these matters must be covered and the Government must be sure that enough information is given to pensioners to make the necessary decisions. I hope my remarks will give the reassurances on this.

As I set out in Grand Committee, providing sufficient guidance for members to make informed decisions regarding their pensions is, of course, of utmost importance. Indeed, this Bill implements a deferred choice for members so that they know what their pension options are at the time they make their decision. I acknowledge the point that the noble and learned Lord, Lord Hope, made about the complexity of this. I hope he will agree that we have taken this into account.

There are a number of problems with the approach proposed in the amendment, which would require the Government to publish guidance within six months of the Bill being passed. There are a significant number of schemes within the Bill’s scope, and scheme regulations will need to be developed, consulted on and implemented in each scheme. The Bill provides that the remedy must be implemented by October 2023, but that is just the beginning of the process. Decisions will be taken in relation to pensioner and deceased members from that time, but active and deferred members will be making their deferred choice over many years into the future. It would not be possible to produce guidance within six months in relation to regulations that may not have been made, nor useful to report on the effectiveness of such guidance before the remedy is implemented. Leaving aside the detail of the amendment, allow me to explain why the Government do not consider the amendment necessary.

On the question raised by the noble Lord, Lord Ponsonby, on the support that will be given to members, I assure him that members will be provided with information about their choice and will be able to understand the options available to them. In most cases it will be straightforward for a member to determine which benefits they wish to receive, but I also reassure noble Lords that schemes are developing tools to support members in planning for their retirement. Members will have access to up-to-date information about their benefits and be able to understand what each option will be worth at their planned retirement age.

Turning to the detail, as I set out in Grand Committee, the Bill already provides that scheme regulations must provide for each member to be provided with remediable service statements containing personalised information about the benefits available to them. That information will include details of the benefits currently available to them under the legacy scheme, and the benefits available to them if they elect to receive new scheme benefits or to opt for a period of opted-out service to be reinstated.

For active members, statements will be provided on an annual basis, enabling members to see how the two sets of benefits compare throughout their career. For deferred members, a one-off statement will be provided initially, with up to one further statement per year on request. For pensioner members, and in respect of deceased members, a one-off statement will be provided for such members or their relations to make an immediate choice.

However, remediable service statements are only part of the information and support that the schemes provide to members. The Public Service Pensions Act 2013 will continue to require schemes to provide members with information about their pension benefits, not just those relating to remediable service. In due course, members will also see information about their pensions through the pensions dashboard, which the House will be familiar with. Schemes already provide members with a wealth of guidance, support and information, and existing legislation already requires them to inform members about changes to pension schemes.

The noble Baroness makes an important point about members planning for retirement, and legacy and reformed schemes often have different retirement ages attached to them. The schemes have implemented significant changes before and are experience and adept at providing their members with support and guidance. The fact is that, across their careers, members will often have a range of different pension entitlements, with different rules and benefits payable at different ages. Therefore, these complexities are not unique to the remedy under the Bill, and the schemes already provide members with tools and support to help them to understand their options and plan for their retirement.

The Government Actuary’s Department is developing tools that will allow members to see exactly how their entitlements change, depending on when they access their benefits. Again, this is not specific to the remedy, but such tools will help members to understand how decisions about when to retire interact with their scheme benefits.

The amendment introduced would also require members to be notified if they are entitled to compensation, but it is already the Government’s intention that, in most cases, compensation will be automatic—for example, in relation to overpaid tax. In all cases, schemes will set out the process for claiming compensation in scheme regulations and inform members of this.

On tax guidance, schemes are already required to provide members, where appropriate, with the relevant information to complete their tax return, and this information will be updated and provided to the member, where their tax position changes. However, where there is an interaction with the tax system, the Government recognise that there will need to be further guidance to complement existing HMRC guidance and scheme processes that already provide the required information to complete a self-assessment return.

That was a rather long-winded response, but I hope that I have reassured the House once again that the Bill, existing legislation, the schemes’ existing processes and the Government’s intentions for implementing the remedy already combine to provide for all the information required for members to make the necessary informed decisions. With that, I ask the noble Baroness to withdraw her amendment.

[Baroness Janke (LD)]

My Lords, I thank all noble Lords who have contributed to the discussion on this amendment, particularly the noble Lord, Lord Ponsonby, and the noble and learned Lord, Lord Hope. I also thank the Minister for his clarification of the situation, as defined in the Bill.

Of course the remediable service statements will help, but the changes are taking place over such a short time and are on such a scale that it seems to me that there needs to be some form of helpline. I do not know whether the pensions dashboard could accommodate one; this might be something that the Government could look into. I ask that the implementation of these measures be closely monitored and that, should the workload and the volume of change give members a challenge in the choices that they have to make, support may perhaps be provided at a later stage. Having said that, I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Janke (LD)]

My Lords, the debate this afternoon has been passionate and enlightening. Here is a quote from Second Reading:

“I think that everybody in this House would say that it is important that our senior judges in the Court of Appeal and the Supreme Court reflect the society that we live in if they are to be respected and seen as part of our current era. At the moment, they do not.”—[Official Report, 7/9/21; col. 792.]


It is also a great pity that the Government have not conducted impact assessments with benchmarking of different ages, but they have not. In the absence of impact assessments, I look to the arguments that we have heard. The point has been admirably made: unless there are vacancies, there will not be opportunities for diversity.

We have heard arguments as to why we should not do this; for example—an argument we often hear when there is talk of promoting diversity—that somehow quality will suffer. I have heard those arguments for the last 40 years. Whether scientists, engineers or Members of Parliament, we now see women operating in spheres that were occupied only by men in the past, with no diminution in quality at all. In fact, the contrary has been the case.

I very much respect what was said by the noble and learned Lord, Lord Mackay, with his experience and knowledge. He mentioned context, however, and, the more we listen to this debate, the more we realise that it is the context that has to change. The present context does not promote diversity at all; I would venture to suggest that, to create greater diversity, the circumstances need to change. This amendment seems to me to promote the kind of change that we need.

We heard from the noble and learned Lord, Lord Etherton, that the position of women has improved and continues to improve slowly, but—to use his words—that the embarrassing position as far as minority ethnic judges is concerned is something we all ought to be ashamed of. The cause of diversity is one that we in this House, as well as people from all walks of life, welcome. Everybody here wants to see a more diverse judiciary. Whatever our own situation, and whether or not we believe, as some in this Chamber clearly do, that somehow the courts will not attract the very best people to be judges, the cause of diversity is absolutely self-explanatory and vital if the people of the country are to be able to respect those in eminent positions. From what I have heard today and in Committee, I would say that the cause of diversity is best served by this amendment. We on this side will support it.

[Viscount Younger of Leckie (Con)]

My Lords, I start by thanking all noble Lords for their contributions during this lively debate. I also thank the noble Lord, Lord Ponsonby, and the noble and learned Lord, Lord Etherton, for the consideration they have both given to this issue, not just today but throughout passage of the Bill. I have listened with care to both sides of the argument put forward today. However, I would like to use this opportunity to set out in full why—in a robust response following detailed public consultation—the Government continue to believe that 75 is the right judicial mandatory retirement age.

All four nations of the UK conducted public consultations on this important question and, following careful analysis of responses, the decision taken by each Government was to increase the mandatory retirement age to 75. I appreciate the support of noble Lords today, from my noble friend Lord Hailsham, to the noble and learned Lords, Lord Woolf, Lord Brown and Lord Hope, and my noble and learned friend Lord Mackay.

I remind the House of some of the data emerging from the UK Government’s consultation. The vast majority of respondents—84%—believed that the mandatory retirement age should be increased, with 67% indicating that a retirement age of 75 was better, all things considered. Notably, 74% of respondents believed that such a change would not damage confidence in our world-class judiciary—something raised by one or two noble Lords today.

On a point raised by the noble and learned Lords, Lord Etherton and Lord Thomas, as to why we appeared to be going against the views of the senior judicial responses to the consultation, we recognise the varied opinions on the appropriate retirement age. However, I assure noble Lords that this decision was taken after careful consideration of all responses including those of the senior judiciary. Some 67% of respondents to the consultation on this matter favoured increasing the age to 75, as I have said. We recognise the concerns raised by the senior judiciary over impacts on judicial diversity, which I shall address later in my remarks. However, on balance, we believe that raising the retirement age to 75 sets the right balance.

It is clear that we agree on one point: that the mandatory retirement age should be increased. The question being debated here is to what age. Here is a point raised by the noble and learned Lord, Lord Hope. If the retirement age is to be increased as this Bill intends, it should be a meaningful increase, which will bring a clear and tangible benefit to the resourcing of our courts, not just a minor raise by two years to 72—a decision which I suspect will not put this issue to bed and will mean that we find ourselves discussing it again in the not-too-distant future, as has been said.

This leads me to an important point on life expectancy. Since the current mandatory retirement age was set in 1993, life expectancy is longer, and social attitudes to working in later life have changed significantly. An age of 75 much better reflects this change. That was a point that the noble and learned Lord, Lord Brown, alluded to in his powerful remarks. Indeed, as I have noted previously, many Members of this House over the age of 75 are among its most knowledgeable, productive and vibrant. I look around now—not wishing to bring any individual Peer to the attention of the House—but I hope that my point is well made.

I stress that the mandatory retirement age is a maximum, not a minimum. Judges will by no means be forced to continue working to 75. The key objective here is additional flexibility, both for officeholders themselves as well as for the resourcing of courts and tribunals. Increasing the mandatory retirement age to 75 maximises this flexibility. Indeed, we already have some officeholders sitting up to the age 75 who play a key role in the administration of justice.

I must also note that, based on the evidence available, it is not clear that all, or even most, judges would choose to continue working to 75. With some trepidation, I do not entirely agree with the statistics put forward by the noble and learned Lord, Lord Etherton, on judiciary retirement. The average retirement age of salaried judges is, I understand, about 67. Over the last five years senior judges—that is, judges of the High Court and above—with a mandatory retirement age of 70, have also on average retired at 67. Evidence therefore suggests that the majority of judges do not continue working till their mandatory retirement age. As I have stated, the objective of this measure is additional flexibility to support the resourcing of courts and tribunals.

I understand that the intended effect of this amendment is to raise the mandatory retirement age to 72 rather than to 75, as has been made clear. However, I must make it clear that this presents a number of consequential issues for other related provisions in the Bill. I note that the amendments do not include changes to paragraph 25(2)(b) of Schedule 1, which repealed the powers to provide for extensions up to 75. In the consultation, only 10% of respondents believed that, if the mandatory retirement age were 72, extensions past the mandatory retirement age should not remain. The amendments as drafted would leave us with a lower retirement age but without retaining these provisions for extensions which are currently in place. Additionally, those “sitting in retirement” can currently continue to decide cases up to the age of 75. The effect of the amendment to Clause 107 would require those sitting in retirement to also retire at the age of 72. This would reduce the resourcing flexibility that “sitting in retirement” arrangements provide.

I also highlight that the amendments do not appear to take account of Part 2 of Schedule 1 to the Bill, which allows for the reinstatement of retired magistrates who are younger than the mandatory retirement age, where there is a business need. This would provide necessary additional capacity in the magistrates’ and family courts to meet forecast case volumes and provide timely access to justice as the courts recover from the pandemic. The Government’s modelling indicates a pool of about 4,000 retired magistrates would be eligible to be considered for reinstatement with a retirement age of 75, but only around 1,300 would be eligible to be considered with retirement at 72. In addition, an age of 72 would provide a much shorter timeframe over which those magistrates reinstated could sit, which means that, when the time and investment necessary to reappoint and retrain is taken into account, the number who would be able to make a meaningful contribution would be smaller still. Therefore, the amendments as tabled result in a hard cut-off at age 72, and with less flexibility than now.

Public Service Pensions and Judicial Offices Bill

Debate between Viscount Younger of Leckie and Baroness Janke

Committee stage
Monday 11th October 2021 Grand Committee

[Baroness Janke (LD)]

I, too, would like to speak to the amendments in my name. I do not have a great deal to add to what the noble Lord, Lord Ponsonby, has said other than to say that I think that this is a particularly important part of the Bill. We have heard from many people who are affected by this Bill about the need for confidence in the measures contained in it and for trust in light of what happened to lead to the need for this legislation. These amendments are to probe what the Government are planning in terms of a compensation scheme and, as has already been said, the right of appeal and members’ rights as to how their representatives may be involved in any compensation scheme. The requirement for consultation clearly goes without saying, and the Government need to do much more work on this part of the Bill to ensure that members have confidence in it.

The noble Lord, Lord Davies, referred to promises having been made but not being honoured and the fact that many outstanding issues still await resolution. I hope that the Minister can clarify what the Government intend and that the proper process will fill members with confidence and ensure much greater trust than has been the case so far.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Lord, Lord Davies, once again and indeed the noble Lord, Lord Ponsonby, and the noble Baroness, Lady Janke, for their valuable contributions and remarks. Given that the noble Baroness is right that this is an important part of the Bill, I wish to give a pretty full response, so I hope the Committee will indulge me as I want to go through in some detail the issues that have been raised and, of course, answer as many questions as I can.

I start by saying, just as a point of agreement, that this group of amendments seeks to ensure that members are correctly compensated for any detriment that they have suffered as a result of the discrimination that has arisen. I reassure this Committee that this is certainly a shared objective.

The noble Lord, Lord Davies, put forward three amendments to Clause 21. It may be helpful if I set out the intended purpose of this clause. It confers power on scheme managers to make payments in relation to compensatable losses. This is compensation in relation to losses incurred as a result of the discrimination, the remedy provided by the Bill, or in respect of certain tax losses. The clause allows for matters that are not directly remedied by the Bill or scheme regulations to be put right.

Amendment 14 would remove the requirement that losses may be compensated only where they are of a description specified in Treasury directions. However, in the Government’s response to the consultation on remedying the discrimination, we set out that some member representatives and employers considered that there would be a need for consistent treatment across and within schemes.

The Treasury directions are one way in which we intend to ensure that such consistency is achieved. The proposed amendment would remove the central consistency that we have committed to provide and would instead require scheme managers to determine all claims in an exercise of their own discretion alone, which could lead to inconsistent and potentially unequal treatment across schemes. I am sure this Committee would agree that we do not want that. That approach would give rise to the concerns that respondents to the consultation raised. We do not consider that is a responsible or appropriate approach. The Government have committed to providing a consistent and full remedy to members and we believe that will be best achieved by the current drafting.

Amendment 15—which was spoken to eloquently by the noble Lords, Lord Davies and Lord Ponsonby—seeks to compensate members for the closure of the legacy pension schemes and for any contingent decisions taken where a member had a period of remediable service that was under a new scheme. Paragraphs (b) and (c) of the amendment from the noble Lord, Lord Davies, in particular, closely relate to an ongoing judicial review challenge before the courts—which the noble Lord alluded to—and it would be inappropriate to discuss in detail. However, the effect of the amendments would be to provide the substantive remedy that the claimants are seeking in the judicial review claim. It would compensate members who were in scope of transitional protection but have not yet retired and will now be in scope of the prospective measures set out in Clauses 76 and 77 of this Bill. Providing compensation in this circumstance would therefore be contrary to the intention of those clauses that all members are to be treated equally from 1 April 2022 by accruing service in the reformed schemes, regardless of their age.

It is important to stress that the Court of Appeal found in the McCloud and Sargeant case in 2018 that the transitional protections offered under the Public Service Pensions Act 2013 amounted to unlawful discrimination. Accordingly, offering compensation to transitionally protected members would effectively undermine the Court of Appeal judgment by perpetuating this unlawful discrimination through different means. The effect would be that instead of allowing transitionally protected members to continue in service in legacy schemes, they would now be receiving the benefit of financial compensation. Non-transitionally protected members would not receive such compensation, so there would still be an unfair difference in treatment.

I will pick up on a point made by the noble Lord, Lord Davies, to try to be helpful concerning police stakeholders. The Government really do understand the concern raised by stakeholders regarding the difference in when members can access their full pension in the 1987 and 2015 police pension schemes. I can reassure noble Lords that the Home Office is engaging with police stakeholders on these matters. However, it is the Government’s view that it will be appropriate for future pension accrual to occur in a scheme with different retirement provisions, for the reasons set out by the noble Lord, Lord Hutton, in his report. As set out in the consultation response regarding this specific issue, it is right that the Government be able to make changes when they judge it necessary to do so. The commission’s original objectives and recommendations, leading to the 2015 reforms and reform schemes, still hold. The Government therefore consider that this is not appropriate and that it is crucial to the effectiveness of the remedy that the discrimination is not perpetuated.

Returning to paragraph (a) of the amendment, this clause already makes provision for losses that arose as a result of the discrimination; that is covered by the first condition, contained in subsection (4). I hope that I can therefore reassure the noble Lord, Lord Davies, that the amendment is not needed.

The noble Lord has also put forward four amendments to Clause 23. Amendments 16 and 17 would require, rather than allow, scheme regulations to make provision under which interest is required to be calculated and paid on amounts owed to or by members under or by virtue of the Bill, and about the process by which amounts and any interest on them are to be paid; I know that this matter cropped up in debate slightly earlier. Where sums are owed to schemes or members, for example relating to contributions or benefits, Clause 23 provides powers for scheme regulations to make provision about the payment of interest on those amounts. Interest will be added to amounts payable by schemes or members. The Government consider that the addition of interest is necessary to ensure fairness between members. For example, where members owe contributions, their comparators in the scheme will have been paying the correct level of contributions throughout, so would not have had the benefit of the additional money over time. Interest will be paid on benefits or contributions owed to members to reflect that the payments relate to earlier periods of time.

Clause 23 also provides that scheme regulations may make provision about the process by which amounts due to and from schemes are to be paid. This includes matters such as providing for when amounts are to be paid, allowing for those to be paid by instalments if appropriate, netting off amounts owed by a person against amounts owed to a person, and conferring rights of appeal against a decision taken under the regulations. The amendments would require scheme regulations to make such provision. However, the Government do not consider that imposing a duty on schemes to make such regulations would be appropriate. Doing so could lead to vexatious claims that schemes have not made regulations to deal with obscure situations that could arise. Rather, the Government consider that granting schemes a broad power, exercisable in accordance with Treasury directions, is the right approach to ensure that schemes can make all the necessary and appropriate provision in scheme regulations, while providing sufficient flexibility to account for the differences in the public service pension schemes that I referred to earlier.

The noble Lord’s third amendment, Amendment 18, would remove provision for schemes to make a payment only on the making of an application. This provision is there for the benefit of members: for example, members may not wish to receive amounts that they are owed. This could arise if they are an active or deferred member and intend to choose reformed scheme benefits upon retirement in order to avoid double corrections, as envisaged by Clause 16(8).

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[Viscount Younger of Leckie (Con)]

This was a much shorter debate. I begin by thanking the noble Baroness, Lady Janke, and the noble Lord, Lord Ponsonby, for the points they made and for raising this important matter. As I touched on earlier in debate, of course I agree that fairness and equal treatment lie at the heart of the Bill—that is, fairness between lower and higher earners and fairness for the taxpayer—as well as the future sustainability and affordability of public service pensions.

Let me go further. The Government agree with the importance of assessing the impact of the Bill on members of the public service pension schemes with protected characteristics, including—importantly—women. This is why the Government sought responses to the consultation on equalities impacts and conducted a full equalities impact assessment of the Bill, which was published alongside its introduction. In addition, when making the necessary changes to their scheme rules to deliver remedy, schemes will carry out any appropriate analysis of equality impacts for their specific schemes alongside consultations on these changes, in compliance with the public sector equality duty contained in Section 149 of the Equality Act 2010.

The Government’s equalities analysis highlights a number of important features of this Bill, which aims to ensure equal treatment between men and women. I note the points made by the noble Lord, Lord Ponsonby. For example, with regard to the main public service schemes, requiring members in scope of remedy to choose their benefits long before retirement could disadvantage women, who may be more likely to take a career break or work part time between implementation of the remedy and their retirement. By allowing this choice to be made at retirement, the deferred choice underpin avoids additional complexity for these groups by allowing them to make their decision in full knowledge of how part-time work or career breaks have affected their earnings and pension accrual. Similarly, by making remedy available to individuals who were in service on or before 31 March 2012 but subsequently left and rejoined, provided that their break in service was less than five years, the Bill ensures parity for groups that may have been more likely to take career breaks—for example, to care for young children or elderly relatives.

The Bill also provides that, from 1 April 2022, all public service workers who remain in service will do so as members of the reformed schemes, which provide career average—so-called CARE—benefits. CARE schemes offer fairer outcomes to those who experience lower salary progression over the course of their careers. As such, statistically, a higher proportion of women and those with other protected characteristics are likely to be better off under CARE schemes, which are broadly more beneficial for lower and some middle earners. The Bill also provides that men and women in the same scheme and of the same date of birth will have the same scheme normal pension age—NPA—under their particular reformed scheme design, and the same NPA for their legacy scheme benefits.

More broadly, the Government recognise the importance of public service pensions in addressing the pensions gap in society between men and women. As women make up roughly 65% of active public service pension scheme members, the provision of generous defined benefit public service pensions actively serves to reduce that gap. Nevertheless, the Government recognise that, in the public sector, differences remain in average annual pension payments and accrued pensions; this was alluded to by the noble Baroness, Lady Janke. However, these reflect past differences in earnings over members’ careers rather than differences in their pension terms.

Therefore, the best way to combat differences in pensions accrual is to tackle the gender pay gap and promote equal opportunities for career progression, regardless of sex or other protected characteristics. The Government are taking active measures on both, including through mandatory gender pay gap reporting. As a result, the gender pay gap continues to be lower in the public sector than the private sector; I have some statistics that I could give to the Committee. As already mentioned, these differences should reduce over time as a result of the move to a CARE benefit design, which all members will accrue from 2022 and which will lead to fairer outcomes for those with lower pay progression.

Given the extensive analysis that has already been conducted and published, as well as the further analysis that schemes will carry out, the Government do not think that a further review is required at this stage. I understand the sentiments behind the amendment but we do not agree that it is necessary. I therefore ask the noble Baroness to withdraw her amendment.

[Baroness Janke (LD)]

I thank the Minister for his response and take his assurances very seriously. Again, this is perhaps something we need to reflect on as it affects society as a whole. I believe we should use every occasion we can to address these fundamental unfairnesses. Having said that, I am sure we will reflect on this, but at this point I beg leave to withdraw the amendment.