Social Security

Wendy Chamberlain Excerpts

Tuesday 9th February 2021 Commons Chamber

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

It is hard to believe that more than four months have passed since we considered the Social Security (Up-rating of Benefits) Bill last autumn, and I welcome the annual process used to ensure that social security benefits and pensions are uprated. However, like others who have spoken in the debate, I must put on record my disappointment at the decisions taken. We are just weeks away from the new financial year, and it might seem hard to believe for some Members, but for millions of people across the country, that represents a terrifying reality.

There is still total uncertainty about what will happen to the universal credit uplift of £20 a week. Under the statutory instrument, the Government plan to take away £1,000 a year from the least well-off families in Britain. This is not scaremongering. The uplift may have been for one year, but people’s situations are arguably more precarious than they were a year ago, so this is quite simply the wrong thing to do. It is the wrong thing to do morally, and it is the wrong thing to do economically, because this money will not be stored away; it will be spent and reinvested back into the economy.

The support that the uplift represents is vital, yet the Government have spurned opportunity after opportunity to make it permanent or to at least extend it. They could have done it during the Secretary of State’s publication of uprating totals back in November, and they could have done it when the latest national lockdown was announced at the beginning of the year, but they did not. Then the Government abstained on the Opposition day motion in the name of the Leader of the Opposition, which puts us in a bizarre situation where Parliament has approved a motion calling for the uplift to be made permanent, yet the Government plan to do nothing about it. The idea of non-binding motions may be familiar to those of us who occupy this place, but in terms of communicating the will of the House to our constituents, I find that an abdication of responsibility from those on the Government Benches. During all that time, millions of families have had to live with the uncertainty of not knowing what their income will be come April. The Government need to provide support, but they also need to provide certainty.

I welcome the report published last week by the all-party parliamentary group on poverty, chaired by the hon. Member for Thirsk and Malton (Kevin Hollinrake), calling for the uplift to be made permanent. As the hon. Member for Feltham and Heston (Seema Malhotra) said, support for that exists across the House. That is what the Government have to do. Otherwise, they will be letting people down at exactly the time when our safety net is meant to support them.

The report also calls for an uplift in legacy benefits, which I wholeheartedly echo and which has been recommended by the Work and Pensions Committee, the Joseph Rowntree Foundation and many others. I do not think we in this place have given enough attention to the issue of people in receipt of legacy benefits. Many of my constituents who receive these benefits were very disappointed to see that they had been excluded from any uplift. It is not right. If we accept that universal credit claimants should receive an uplift, there is no reason why that should not have been extended. Instead, the only uplifts offered for legacy benefits are the inflationary ones detailed in the statutory instrument today. That means, for example, that someone who receives ESA and is in a work-related activity group will receive 35p per week extra, and someone who receives carer’s allowance will see a 30p per week increase. Many of my constituents regard these increases, at a time of such hardship for many of them, to be derisory. I urge the Government to consider uplifting legacy benefits. It is a question of fairness. The Minister, in his opening remarks, suggested that Opposition scaremongering is responsible for those on legacy benefits being deterred from making UC claims, but surely at such an uncertain time it is understandable that people choose to stick with what they know and what they have.

[Mark Tami (Alyn and Deeside) (Lab)]

Does the hon. Lady agree that people are also exposed to loan sharks and others who know how vulnerable people are at this time and prey on them?

[Wendy Chamberlain]

I thank the right hon. Gentleman for his intervention and agree absolutely: when people are desperate, they turn to whatever options are available to them and that stores up more difficulties for the future.

I turn now to the uplifting of pensions. It is right that the Government have taken steps, such as in the Social Security (Up-rating of Benefits) Act 2020, to ensure that the commitment to the triple lock is maintained. As I said during the passage of that Act, not only does the triple lock provide an important means to ensure that pensioners are properly supported in retirement, but it is a matter of intergenerational fairness. Small increases year on year now ensure that the generation who are currently just entering the workplace will also receive that support when it is time for them to retire.

This is a timely opportunity to discuss pensions, for important research was published today by the charity Independent Age—this was referred to by the Chair of the Select Committee, the right hon. Member for East Ham (Stephen Timms)—detailing that older people miss out on £88 million a year from the warm home discount because they do not claim pension credit. Some 650,000 pensioners who are eligible for pension credit do not claim it. I hope the Minister in his winding-up speech will address what the Department for Work and Pensions is doing to promote engagement and increase uptake of this important benefit.

The final area I want to refer to where there is an inherent sense of unfairness is the frozen pensions of overseas pensioners in certain countries. I have recently met people affected by this issue. They have found it hard to survive on a frozen pension and this is especially the case during the coronavirus pandemic. There is a moral case to expand the pensions uplift to overseas pensioners during the pandemic.

I welcome the recent report of the all-party group on frozen British pensions, which is chaired by the right hon. Member for North Thanet (Sir Roger Gale), who spoke earlier in the debate. The report tells of a British citizen, a 96-year-old veteran called Anne Puckridge, who served in all three branches of the armed forces. She moved to Canada in 2001 so that she could be close to her family. Despite all that, and despite her national insurance contributions, she finds herself receiving a state pension of £72.50 a week. Of course, because of the 15-year rule, she is denied proper representation in this place, and I look forward to the Government bringing forward legislation, as they committed to do in their manifesto, to scrap the 15-year rule. She is in a strange and arbitrary situation where, had she moved a bit further south, over the border, into the United States, she would be eligible for a fully uprated state pension, because we have an agreement with the US. Does the Minister see the unfairness in that?

The all-party group has found that the Canadian Government are willing to engage on this issue and have made a formal request to the UK Government about the potential for reciprocal arrangements. I hope the Minister will be in a position to update us on what discussions he and the Pensions Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman), have had about this. I hope the Minister will address three key questions on this issue. When do the UK Government plan to respond to the Canadian Government? What is the process moving forward on coming to an agreement? What is that response likely to be? I urge them to reach an agreement. It would clearly be transformative for very many. I look forward to hearing from the Minister on this issue during his winding-up speech.

Oral Answers to Questions

Wendy Chamberlain Excerpts

Monday 25th January 2021 Commons Chamber

[Mims Davies]

Mr Speaker, would you like to be a 3D animator, a disabled riding school assistant, a camera operator or maybe a trainee fencing coach? These are all kickstart roles that are available. We have made it simpler for employers to get involved with kickstart, cutting the 30 posts minimum threshold so those applying for any number of roles can now apply direct to the DWP. We have also made it easier for sole traders to sign up. We have had a great response, with over 6,500 employers stepping up to offer placements in different fields and sectors, as we have heard, and also to be crucial gateways.

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

People who receive legacy benefits were excluded from the uplift to universal credit, but the Government have now announced plans for an uplift this April of 0.5%. If people are claiming ESA in the work-related activity group, that equates to 37p a week, which is derisory. We need to ensure that people on legacy benefits receive a proper degree of support, so as part of the Secretary of State’s review of the UC uplift that she mentioned earlier, will she commit to providing a similar uplift to legacy benefits?

[Will Quince]

First, let me say that I appreciate that many people are facing financial disruption due to the pandemic, and the Government have put unprecedented levels of support in place. As the hon. Lady rightly points out, legacy benefits are being increased by 0.5% this year, on top of the 1.7% last year. Legacy benefit claimants can make an application for universal credit, but what I would say is that I encourage them to check on one of the benefit calculators on gov.uk. Once they make an application to universal credit, their entitlement to legacy benefits will cease, so it is very important that they do check first.

Covid-19: Child Maintenance Service

Wendy Chamberlain Excerpts

Thursday 21st January 2021 Commons Chamber

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

I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing today’s debate, and I was happy to support her application. It is clear from Members’ contributions so far that we all deal with a number of constituents’ cases regarding child maintenance payments. In just a year as an MP, I have dealt with several, so I am grateful for the opportunity to discuss the functioning of the CMS in Parliament today.

It is particularly appropriate to recognise the pressures that have resulted from coronavirus. There are pressures on the hard-working CMS staff, to whom I pay tribute. Like so many of us around the country, they will have had to get used to new ways of working. There are also pressures on parents in receipt of child maintenance, mostly one-parent families, as the economic impact of the pandemic threatens the livelihoods of many. The Joseph Rowntree Foundation’s excellent “UK Poverty 2020/21” report, published last week, makes that clear. Even before covid, there were huge pressures on one-parent families. They had the highest in-work poverty rate and they are also one of the groups who are most likely to have been especially impacted by covid-19. Single parents are predominantly women and are more likely to work in the sectors hardest hit by covid. They are more reliant on local jobs and are more likely to have struggled with childcare during lockdown. Four in five people in one-parent families are in receipt of income-related benefits.

I mentioned constituency cases and I wanted to highlight one in particular. This constituent contacted me right at the start of my time as an MP, almost exactly a year ago, and her case is shocking. Her former husband had evaded making any financial contribution to help her raise her two sons over an 18-year period and she was owed almost £30,000 of unpaid child maintenance. I am not intending to go into a blow-by-blow account of her dealings with the CMS in the past year. Thankfully, the debt has now been paid, and I am very grateful to Baroness Stedman-Scott for meeting me twice in the autumn to try to resolve the case. However, a few things stood out to me, and to my constituent, throughout this process that I wanted to draw attention to.

The first was the sense of drift. I went to the CMS on several occasions asking what its next steps were and responses were forthcoming to me only after some chasing—my constituent had a similar experience. Months seemed to pass where very little progress was made, and just when we thought that the whole thing had been resolved it turned out that the old liability orders issued against her ex-husband had been lost in the transfer from the Child Support Agency to the CMS. In fairness, I should say that the CMS is replacing a discredited system; that, as I mentioned, coronavirus will have played a part, especially in the spring; and that by the autumn engagement has been good. But for my constituent, these delays have been incredibly frustrating. She told me:

“Any correspondence that I have had with Child Maintenance has been met with the same poor failures in service. Despite all of my efforts there appears to be a distinct lack of accountability to take positive action on my case.”

The second thing that struck me was the bureaucratic hoops that my constituent had to jump through in order for the money to be recovered. Her case had recently been transferred from the old CSA and, as a result, the CMS had in effect to start from scratch on trying to recover the money, even though it had been through the court order process previously. That meant more hoops to jump through, including two occasions when her ex-partner had the ability to launch a review of a decision that had been made by the CMS, which of course he did. All these served to do was to delay and frustrate the recovery of money that was already 18 years overdue. I understand why those safeguards are in place, but it is incredibly frustrating. My constituent felt that the CMS was being more responsive to her ex-partner than to her.

Thirdly, there is the fact that my constituent had to come to me for this to be unblocked. She was getting nowhere on her own. When I escalated the case, I was able to speak to the Minister and to the case manager, and that was a great help, but as is so often the case, as I have learned over the last year, it should not have to be that way. MPs are who people go to when they have exhausted every other option. It should not have to take significant and sustained engagement from me and my casework team to resolve issues. We have to start designing processes that work for people. The tragedy is that my constituent’s children are now adults. They have grown up, and they have missed out on the support they needed at the time they needed it.

Universal Credit and Working Tax Credit

Wendy Chamberlain Excerpts

Monday 18th January 2021 Commons Chamber

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

The Liberal Democrats fully support the £20 uplift to universal credit and making it permanent, and we will vote in favour of the motion accordingly. It is the right thing to do to ensure that our most vulnerable have a safety net that works for them and their dependants. It is the right thing to do to invest in our social security system and the best way to help people to escape from poverty and help stimulate our recovery. And it is the right thing to do to act now and give families certainty, rather than the approach favoured by the Government, which is to leave families in the dark, in the middle of the greatest economic crisis this country has ever seen.

The coronavirus pandemic has transformed how so many people see our welfare system. People who never thought they would interact with the system are now doing so and will need to continue doing so beyond April. We should therefore not be debating whether we should take away the vital £20; we should be debating whether we can go further. Hundreds of thousands of people receive legacy benefits and many of them are unable to transfer to universal credit. They were excluded last year from the Chancellor’s uplift on an entirely arbitrary basis. This group includes many disabled people and their carers. How can we leave them out of the uplift at a time that is difficult for so many? What happened to “no one left behind”? What happened to “whatever it takes”?

The Government have failed to act on this issue, and my North East Fife constituents who claim legacy benefits feel forgotten. That is why we support uplifting legacy benefits and backdating the uplift to April 2020.

It is the same story for carers. Unpaid carers are doing a remarkable and important job in very difficult circumstances. They deserve our support, but there is an historic deficit in the support available to unpaid carers. Carer’s allowance is just £67.25 a week, the lowest benefit of its kind. That is why it is vital that the Government immediately uplift carer’s allowance, too, in line with the uplift to universal credit. Too often, carers have been an afterthought for many politicians. It is time to stand up for them.

As more and more people access universal credit, it is also high time that we looked at the areas where it is failing to deliver. Last year, the Joseph Rowntree Foundation published a report looking at universal credit in Glasgow. The report highlighted that many people who access universal credit suffer from mental ill-health, but even more damningly, it said that even among people who did not have a mental health condition, many still suffered anxiety caused by their engagement with universal credit. The reasons include challenges in navigating the online system and a lack of face-to-face support with this, poverty and financial insecurity due to the waiting period for the first payment, the stress of managing budgets between payments, housing, conditionality and the fear of sanctions. The whole point of conditionality is to get people back to work, but right now there is simply little prospect of that. The Government have failed to suspend conditionality during the current lockdown even though they suspended it between March and July last year. On the “digital by default” approach, the majority of claimants access the system on mobile technology, and this has issues for my rural constituency.

In short, there is much work to be done.

Future of Pensions Policy

Wendy Chamberlain Excerpts

Tuesday 8th December 2020 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate the hon. Member for Delyn (Rob Roberts) on securing the debate. This autumn has demonstrated that there is a considerable appetite in the House for discussion of pensions policy. We have had the Social Security (Up-rating of Benefits) Act 2020 and a landmark piece of pensions legislation in the Pension Schemes Bill, with amendments yet to be considered in the House of Lords. Not content with all that debate, we now find ourselves, thanks to the hon. Member for Delyn, looking to the horizon of pension policies yet to come.

Of course, that is entirely the right approach, for two reasons. First, pensions are, by their very nature, a long-term product, so the policy decisions we are making now will have an impact quite literally decades down the line. Let us say that someone is in their early 20s, has just started their first permanent job and is making their first pension contributions. They will not be drawing down their pension for another 45 or even 50 years, most likely, so the legislation and regulations that we make now—those, for instance, that are part of the Pension Schemes Bill—will have an effect stretching all the way to 2070 and beyond. That really is long-term policy making.

Secondly, this century poses new challenges of huge proportions. Those challenges of course include automation, an ageing population, with increasing life expectancy—I note the comments of the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) on that—and the climate emergency. I would not normally choose to quote Donald Rumsfeld, but when we consider the profound and unforeseen impact that a global pandemic has had on our society this year, we have to recognise that it is not just the identifiable factors that we need to be concerned about; it is also the “unknown unknowns”.

An incredibly important matter when it comes to long-term pensions policy is the triple lock. It was a decade ago that the Liberal Democrats helped introduce the triple lock on the state pension, and I pay tribute to the then Pensions Minister and former Liberal Democrat MP Steve Webb, who was instrumental in that. The triple lock has been a huge success and an incredibly popular measure: indeed, since its introduction, it has been adopted by all major parties, although I note with concern that there has been some speculation that the Government may look to scrap it in future. I hope that rumours of its demise are greatly exaggerated, because I do think that the triple lock plays a crucial role.

During the debate about the Social Security (Up-rating of Benefits) Bill in October, I spoke to the issue of intergenerational fairness. That issue has become very clear over the past few months, during which young people have had to put their lives on hold to stop the spread of a virus that does not always pose the same threat to them as it does to older people in our society. Of course, it is young people who will bear the brunt of the current and future economic costs, not only because of the immediate impact on the jobs market that we are seeing, but because they will be saddled with the debt accrued into the future.

Some say that the triple lock is making the gap between the generations grow even further because, on the face of it, a large sum of money is being spent on older people. However, as I made clear during the debate on the uprating Bill, it is increasingly the case that many working-age people are unable to save adequately for their retirement. It is certainly the case that defined-benefit schemes, which many people were historically enrolled in, are being used far less frequently. That all means an increasing reliance on the state pension. As such, it is vital that we make sure the state pension is strong, not only for this generation of retirees but for the next one and the one after that. I continue to urge the Government, as I did during the passage of that Bill, to ensure that the triple lock is retained, now and in the future. We need to ensure a good deal for the generation of people who are currently only starting out in work. The choices we make now will have an impact decades into the future.

However, pensions policy is not just about the long term. As we have heard from other Members, there are many steps that can and should be taken to ensure that pensions work better for people who are about to retire, or who have retired already. Pensioners are feeling real financial impacts now, including the Equitable Life scandal, the situation experienced by the WASPI women and the issues with plumbers’ pensions, which I raised during the debate on the Pension Schemes Bill last month. There is also the fact that many British pensioners overseas have their state pensions frozen, and the Government have not committed to uplifting those pensions, at the very least for the duration of the covid pandemic. This has been a hugely difficult time for many of those pensioners in many different countries. We might just have taken a huge step in relation to pensions through legislation, but these campaigns continue, and it is imperative that the Government actively engage with them. Many of those campaigners are disheartened that the chance they felt they had to resolve those issues through the Pension Schemes Bill was missed, and feel that they remain unheard.

Another issue that I hope the Minister will address is that of married women who have been underpaid their state pension, having not been upgraded to their full pension when their husband reached state pension age. They could potentially be eligible for thousands of pounds in repayment from the Department for Work and Pensions. This is an issue that Steve Webb, whom I mentioned earlier, is working to highlight and resolve. We know that at least 1,900 women have been paid out to, but the Government have not yet said how much money has been paid out in total. We urgently need to know how many women the Government estimate have potentially been underpaid. It is so important that these women are informed as soon as possible that they have been underpaid.

Many Members have talked about pension credit; we need to inform people of what they are due. I hope the Minister will address that in his response, because so far there has not been sufficient clarity from the Government about the scale of this problem and what has been done to address it.

Finally, I come back to the Pension Schemes Bill, because it has not yet been passed. Amendments are still being considered by the Lords, and while the scope of possible changes to the Bill is now limited, I do hope the Government will be willing to engage and potentially to restore some of the additions made to the Bill. As the Minister knows, I am particularly keen to see further clarity on the issue of open defined-benefit schemes, and I hope the Government will continue to engage with my colleague Baroness Bowles on that issue—in fact, I believe they are doing so today.

[Guy Opperman]

On that particular point, the hon. Lady will be pleased to know that, provided this debate ends on time, I will go straight into a meeting with a cross-party group of Lords about clause 123 and open DB. I will be making the point that the Pensions Regulator will be very happy to meet the Lords to engage with them and ensure that they have an opportunity to fully comprehend what the proposed regulations are going to be. I will also make the point that we remain very supportive of DB on an ongoing basis.

--- Later in debate ---

[Wendy Chamberlain]

I thank the Minister for that intervention. I only became aware of the meeting today, while I was sitting here, a short time ago, and I thank him for his response. There is still an opportunity to make the Bill even better than it is, and I urge the Government to take that chance. That Bill lays the foundations for the future of pensions policy.

Coronavirus Outbreak: DWP Response

Wendy Chamberlain Excerpts

Thursday 26th November 2020 Commons Chamber

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

I pay tribute to the members of the Work and Pensions Committee and its Chair, the right hon. Member for East Ham (Stephen Timms), for the important work they have been carrying out during the coronavirus pandemic. I welcome the recommendations in their report on the DWP’s response to covid.

For many of my constituents, this crisis has been the first time that they have engaged with the benefits system. While it is important to note that, as we have heard, there have been some successes, many of my constituents have been shocked to find out that what they believed to be a safety net has some significant holes. I want to limit my remarks to the issue of those left worse off and one particular constituency case.

One of my constituents, Lara, wrote to me. She is a student mental health nurse, and the previous academic year was the second year of her studies. During the pandemic, like all second-year student nurses, she was offered a fixed-term contract to help the NHS that would run until August. She said:

“It was fantastic to be recognised as having the skills that were needed, and like my classmates, I felt it necessary to take this offer. Should I have declined, I would then have needed to extend my studies by 6 months as in order to register as a nurse, 2300 placement hours must be worked.”

Many students nurses work alongside their studies to top up their nursing bursary, but Lara was unable to do that owing to disability, and, as a result, was eligible for housing benefit and for employment and support allowance, as well as the personal independence payment. She said that this was able to help her have a place of her own, which has vastly improved her health, something of which she feels the benefit daily. When she took on the fixed-term contract, that meant that she was receiving a wage, which meant a temporary pause in her benefits. She told me:

“I had to decide between keeping a benefit I was entitled to, or my education, and I chose my education.”

So she served on the frontline during the first wave of the pandemic, like so many other student nurses—I pay tribute to them all—putting themselves at risk to help protect our NHS.

But when Lara’s fixed-term contract came to an end, she found herself, in her own words, in “an awful situation.” She said:

“It turns out, since I started claiming benefits, the system has changed. Housing benefit no longer exists, neither does the version of ESA I received. I was advised I would now have to apply for Universal Credit, which…isn’t actually available to students.

Living off my nursing bursary, and PIP, means after I pay my rent and bills, I have £8 a week to live off. I either must take a loan, and leave university in debt, or give up my rented flat and move into a box room at my mum’s.

I am honestly so deflated that because I did what I felt was right in helping the country during the pandemic by providing skills I have, that I am now in this situation. It is a kick in the teeth that had I declined the placement, none of my benefits would have been affected.”

How is that fair? Lara showed such dedication in the spring to take the fixed-term contract when she was only halfway through her studies, putting herself at risk to help protect the NHS, and giving up the benefits she was receiving in order to do that.

It was people like Lara we were lining up outside our doors to clap for earlier this year. She and so many like her were making an enormous sacrifice to help keep us safe, and that is something we should be rewarding. What kind of society claps for our carers and then leaves them with barely enough money to survive on, applauds our public sector frontline workers and then hands them a pay freeze, and sees the need for a commitment to help the most vulnerable and disadvantaged around the world, only to withdraw that at a time when the need for support has never been greater?

The Committee’s report has rightly highlighted the failure of the Government to uplift legacy benefits in the same manner as universal credit. I have had a great deal of correspondence from constituents who have been directly impacted by this. In Lara’s case, this is someone on legacy benefits who leaves them and is now ineligible for both legacy benefits and universal credit. I hope that the Minister will engage with me on this particular case. Is there any estimate of how many other student nurses and doctors find themselves in the same position as Lara, having made the same decision earlier this year? We have seen from the Office for Budget Responsibility’s releases yesterday that welfare spending actually makes up a very small proportion of the total covid response. I look forward to the Minister’s response.

Pension Schemes Bill [Lords]

Wendy Chamberlain Excerpts

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

[Nigel Mills]

I am grateful to the Minister and I agree. The measures in the Bill are very sensible steps forward that will make a great difference. What is proposed in amendment 16 would just create a horrible mess for the pensions industry without really achieving anything further, so I will not support it if it is pushed to a vote.

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

I would like to speak to amendments 1 and 6, which have been tabled in my name and the names of other Liberal Democrat Members, and in favour of the cross-party amendment 7, tabled in the name of the hon. Member for Airdrie and Shotts (Neil Gray), as well as to his new clauses 4 and 5. I was very pleased to see new clauses 4 and 5 tabled and I pay tribute to the work of the all-party group on plumbers’ pensions—chaired by the hon. Member for Perth and North Perthshire (Pete Wishart)—of which I am a vice-chair.

I have a constituent who was a member of the plumbers’ pension scheme, and the trustees failed to notify him and others that, were they to leave the scheme, he would find himself liable under section 75. He had been a responsible small business employer, enabling all his employees to be part of a pension scheme and to save for their retirement. When he retired and wound up the business, he was not made aware of the consequences by the trustees from a pensions perspective of doing so. That means that through no fault of his own, he is now in a position where, because his business is no longer operating, he cannot apply for current easement schemes and, because his business was not incorporated, he is personally liable for the debt. He is now an elderly man and is being pursued by the trustees. They are threatening to repossess his house and his life savings are at risk. Were that to happen, the sums recovered from him would not even pay off half the outstanding debt.

My constituent told me:

“We are now in the third year of this, and it is taking a toll on my health, and also on the health of my wife.”

If passed, new clause 4 would turn my constituent’s life around. The safeguards are there. His total debt is only a tiny proportion of the total liabilities, and the trustees have determined that the majority of cessation events will be too costly or lengthy to seek recovery. That is one of the issues here: there is an injustice going on that has not received the attention it deserves because relatively few people have been affected by it, but that also presents the opportunity that something can be done and I hope that the Minister will comment accordingly on new clause 4 and look further at this plumbers’ pension issue. It is causing hardship and anxiety for, arguably, an increasingly vulnerable group of people.

I shall now address part 5 and schedule 10 and, in particular, clause 123 on defined-benefit schemes. My colleague in the Lords, Baroness Bowles, tabled the original amendment to clause 123 that would ensure that defined-benefit schemes are treated differently, depending on whether they are open or closed. I pay tribute to Baroness Bowles. Her amendment had cross-party support in the Lords, so it was disappointing that the Government removed it in Committee two weeks ago.

My amendment 1 would reinstate Baroness Bowles’s amendment, and amendment 7 in the name of the hon. Member for Airdrie and Shotts is a revised version of it, which I have also signed. I did not have the chance to sit on the Bill Committee, but I did follow proceedings and I was encouraged by the Minister’s comments during Committee on open defined-benefit schemes. He said:

“We acknowledge that if such schemes do continue to admit new entrants and do not mature then the scheme will not actually reach significant maturity. We are content that such a scheme retains the same flexibility in its funding and investment strategies that all immature schemes have.”––[Official Report, Pension Schemes Public Bill Committee, 5 November 2020; c. 81.]

I welcome those comments, which imply that open schemes should, and will, be treated differently from closed schemes, in accordance with different investment, liquidity and maturity, and I hope the Minister will be able to recommit to that statement on the Floor of the House today. I urge him to accept either amendment 1 or amendment 7, which would put that commitment on the face of the Bill and provide much needed reassurance for open schemes that have contacted me, and, I am sure, have contacted other Members, in advance of this debate.

We need that reassurance because there is real concern about the regulator’s consultation. Looking at the consultation document, there are places where it looks like the regulator is making the right noises on DB schemes.

[Guy Opperman]

I am grateful to the hon. Lady for those comments. I will not have the chance to answer in detail in closing, but I am very happy to endorse, and repeat as if I were to say the exact same words, the very detailed comments I made at Committee as to the way in which open schemes will be treated on an ongoing basis.

[Wendy Chamberlain]

I thank the Minister for that intervention, but I would ask him again to consider accepting either amendment 7 or amendment 1, which would put that commitment on the face of the Bill.

We need that reassurance because there is a real concern about the regulator’s consultation. In other places there appears to be a conflation, in that consultation document, of open and closed structures, with references to the same treatment and same risk profile between open and closed schemes. But it is just not possible to have the same risk profile between an open and a closed scheme.

[Richard Graham (Gloucester) (Con)]

This is an important point and the Minister will know that there are open schemes with considerable assets which could be deployed to the advantage of this nation in investing in means of growth for the future. Where they are funded, being open, it gives them a huge advantage and of course the current situation on bond yields makes it even less helpful for them purely to invest in gilts and so on. So I strongly support what the hon. Lady is saying. Does she agree that it would be helpful if the Minister could refer to this again in winding up?

[Wendy Chamberlain]

I thank the hon. Gentleman for his endorsement of my remarks. I hope the Minister will comment on this in winding up.

Open and closed schemes are on a continuum. A scheme opens, it matures, it becomes closed, it reaches the absolute end of the range of maturity, and the risk profile varies with that maturity. However, parts of the consultation document do not seem to recognise this, which is concerning. There is an understandable desire from employers and employees for this to be clarified. There is real concern that the regulator wants open schemes to be considered as if they were on the brink of forced closure, but that means effectively crystallising their investment structure into a closed structure and preventing them from acting as they need to, as the hon. Gentleman suggested. So I ask the Minister to recommit to the House that this will not happen, otherwise our concerns will remain, and Baroness Bowles and her colleagues in the Lords will continue to press the Government on this when amendments return to the other place.

There is a huge risk to getting this wrong. Members highlighted on Second Reading the issue of railway pensions. Their campaigning has been very important in raising the potential impact of this Bill on defined-benefit schemes. I also want to highlight the charitable sector and many large charities that rely on DB schemes: Oxfam, Age UK, Cancer Research, the National Trust and the Royal National Lifeboat Institution, to name but a few. My amendment 6 would require the Government to carry out an economic impact assessment on the effect of changes to DB schemes on that important sector. We have already heard that open schemes will end up with deficits of £120 billion to £160 billion if they are treated in the same way as closed schemes.

6.15 pm

We are in the midst of a pandemic and huge economic shocks, the impact of which we cannot fully predict at this time. Is now the time to saddle companies and charities with that extra debt, and for what purpose? What of individual savers themselves? Can we reasonably expect people potentially to double their personal contributions? Surely a more likely outcome from that requirement is that people will simply cease to contribute, and that will apply further pressure to the viability of that scheme.

There is a real danger that as a result of the deficits, charities—some of which I have mentioned—will go bust, and that is not a policy that any Government should be promoting, particularly given the support that the Government have put into the sector during the course of the pandemic. That would surely be a bad policy at any time. As I said earlier, I am encouraged by the Minister’s statements in Committee, and I thank him for recommitting to those in his intervention, but I hope he appreciates that we urgently need further reassurances. I do not see why such provision could not be made in the Bill, as indeed it was when it came from the other place. It would make sure that the regulator was acting in a sensible way. I look forward to hearing the Minister’s response.

My first contribution when taking on the role of DWP spokesperson for my party was on ensuring the triple lock for the state pension. In that debate, I highlighted the need to ensure a sustainable state pension, particularly given the intergenerational divide emerging for young people in this country. We should not, through this Bill, be potentially driving more people into reliance on the state pension by making personal pension provision unaffordable for individuals or institutions.

[Gareth Davies (Grantham and Stamford) (Con)]

It is a great pleasure to speak in this debate today, as it was on Second Reading and in Committee. I would like specifically to address amendment 16 to clause 124. Let me start by saying how great it is that we have cross-party support for policies that push forward our efforts on climate change. We should all be very proud of the fact that we are one of the first major countries to legislate to become a net zero country by 2050. I have long talked about the influence and power of financial services and financial markets to move things forward, but sadly I cannot support amendment 16. I will set out three reasons. The first is the unintended consequences, the second concerns divestment and the third relates to focus.

First, amendment 16 is well-meaning, but it would have unintended consequences. I fear fund managers would be limited in what they were able to invest in. I say that because of the limited environmental, social and corporate governance data in certain asset classes in certain markets around the world. If we look at emerging markets, private equity or in small-cap companies, ESG data is sporadic at best. It is getting better all the time, but at this point in time the market is not mature enough for the amendment to apply for managers. I fear that managers would be limited, and that would result in sub-optimal investments and mean that they could not fulfil their fiduciary responsibility.

--- Later in debate ---

[Wendy Chamberlain]

There is nothing more for me to say, other than to add my thanks to Members of this House and the other place for their work on the Bill. There is much to recommend the Bill, and I look forward to seeing how it progresses.

Supporting Disadvantaged Families

Wendy Chamberlain Excerpts

Monday 9th November 2020 Commons Chamber

[Dr Coffey]

My hon. Friend is absolutely right on that, and I welcome his support for this package. We are taking that comprehensive, holistic approach, trusting our local councils to target the people who need that support. Commendable as people may have thought the motion discussed in the House a few weeks ago was, we wanted to make sure that every child at risk of going hungry this winter would be helped. This is also why we want to continue this approach with councils, whereby with these additions to their welfare funds they can really try to ensure that people have the money, if necessary, to heat their homes and prepare good nutritious meals.

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

I join other Opposition Members in welcoming the Government’s movement on the issue, and I am pleased that they finally agree that no child should go hungry in the UK, but the devolved Administrations had their priorities on this issue right from the outset. Just moments ago, we heard that this is a significant expansion in England but that the devolved Administrations are to make do with moneys already announced last week. So will the Secretary of State explain why the devolved Administrations are arguably being penalised for having not only their priorities right on this issue, but their sums right?

[Dr Coffey]

I am afraid that the hon. Lady is completely wrong on that. One thing the Chancellor set out last week was a recognition that, through the Barnett formula, every time we do certain different policies the devolved Administrations want to do additional things. We have a mature relationship with the devolved Administrations. They have been set a guaranteed amount of funding, and I assure her that there is still more room in terms of Barnett consequentials. The Chancellor was right to make the decision he did, and she should welcome it.

Universal Basic Income

Wendy Chamberlain Excerpts

Tuesday 13th October 2020 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Inverclyde (Ronnie Cowan)—a fellow Greenockian, as he acknowledged—on securing this important debate.

I agree that the pandemic has made the case for UBI ever more urgent. At the outset of the pandemic, I and others welcomed the Government’s financial support schemes and, I admit, generally accepted that existing HMRC mechanisms were the most efficient way of getting support out quickly and effectively to employers and employees. However, time has passed, and we now need to recognise that millions of people missed out on any support and continue to do so. Many constituents have been in touch—I am sure the same is true of other Members present—to say that they had missed out on support either because they were employed a day after the furlough cut-off or because their old employer would not re-hire them. Others missed out on the self-employment income scheme because they were not able to jump through the Treasury’s hoops. They were, therefore, unable to access the support they desperately needed.

We have all heard these stories, which is why many of us are members of the all-party parliamentary group on gaps in support, ably chaired by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone). It is impossible to listen to these stories without feeling a huge amount of empathy towards these people, who have faced an incredibly difficult year and now find further months of restrictions looming. Some 3 million people were excluded, in some cases on an entirely arbitrary basis. Despite the campaigning of many, the Government consciously continued to exclude those people—if they got no support at the start, they are still not getting any now.

Other Members have referred to members of our society who are sadly all too familiar with the challenges involved in engaging with our welfare system. However, without access to the current support schemes, many who thought they would never have to do so have engaged with DWP and universal credit support for the first time. DWP staff have worked incredibly hard at this challenging time. I commend them for that, and acknowledge that, as a Member, I have had direct support from them. I also acknowledge that the Government have temporarily increased the universal credit standard allowance for 2021 and relaxed the minimum income floor for the duration of the crisis. However, that demonstrates that every support mechanism currently available has eligibility conditions, and it is therefore inevitable that people will miss out. That is often why they contact us, as their Members of Parliament, and it is why UBI is such a powerful idea: there are no hoops to jump through and no complicated terms and conditions that exclude people. There is no sense of arbitrariness.

We heard yesterday about further restrictions—more restrictions have already been put in place in Scotland—and I am glad that the Government are bringing forward further economic support. However, I am disappointed that, several months on from the initial lockdown, and facing renewed restrictions and a surge in infections and hospital admissions, we are still no clearer on test and trace or on a job support scheme that actually reflects the reality of operating under the current restrictions and the seasonality of work in constituencies such as mine, which relies on tourism. Indeed, it feels like we are back in emergency measures, calling on the Paymaster General to unblock issues and get responses from Government Departments.

Beyond covid, there has been support for UBI pilots. In Fife, the preparatory work has been done; they just need permission to run the pilot scheme. Instead of relying on evidence from elsewhere, let us develop our own evidence base, then we will be best placed to assess whether UBI will work and the income and infrastructure required to deliver it. This work could arguably start quickly, and report quickly as well. This year, many who assumed that the safety net of our welfare system would be there to catch them have found the holes too big. Exploring UBI is a way of addressing those holes and providing a platform for future prosperity and economic recovery.

Pension Schemes Bill [Lords]

Wendy Chamberlain Excerpts

2nd reading & 2nd reading: House of Commons & Money resolution & Money resolution: House of Commons & Programme motion & Programme motion: House of Commons
Wednesday 7th October 2020 Commons Chamber

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

First, I express my thanks to Members of the other place for introducing the Bill and for their work in bringing it to its current form. Clearly, much expertise and scrutiny have been brought to bear.

Secondly, I want to acknowledge that life expectancy is increasing and that that is good news. It also brings challenges and that is a good problem to have. Older people may now need a pension income that will last for 20, 30 or even 40 years and we should welcome that. As I said in the debate last week on the Social Security (Up-rating of Benefits) Bill, the triple-lock guarantee for pensions has never been more important. It is clear that many working-age people, and especially younger people, are not saving, and are simply unable to save enough, for their retirement. Final salary pension schemes, such as defined-benefit schemes, are increasingly closing to new entrants. This will mean that the state pension will become an increasingly important source of retirement income in the future. That makes this Bill and its consideration of how best to manage workplace pension schemes even more vital. As a result of the work in the other place, there is much to welcome.

I have had a number of jobs over my time in employment. I cannot beat 11 in five years but, at the last count, I am currently a member of four different pension schemes—both private and public sector and both defined-benefit and defined-contribution schemes. It is clear that, as work changes and more people move from employer to employer, such circumstances are more likely, and I welcome the Bill’s acknowledgment of this increasing reality for many.

I will restrict my remarks to a small number of areas. Other Members have outlined the details of parts 1 and 2 and the proposal to introduce collective defined-contribution schemes and collective money purchase schemes to allow savers to take advantage of market highs and avoid the lows. It makes sense to offer a more balanced alternative to having all the risk lying with either the sponsoring employer, as in defined-benefit schemes, or with the employee, as in defined-contribution schemes. The cross-party employer and employee support outlined in the Government’s consultation reflects that and, having outlined the importance of ensuring inter-generational fairness last week, I highlight the Lords amendment to clause 27, which would provide that, whenever the pensions regulator issued a notice requiring a scheme to submit a supervisory return, it must include a requirement that the trustees assess the extent to which the scheme is operating in a manner that is fair to all its members. I seek a response from the Minister on that amendment and on the steps that the Government are taking to ensure that such fairness is there from the outset of any CDC scheme.

On part 4, like many, I welcome the creation of dashboards that will allow people not only to see their current pension provisions all in one place but even find pensions they potentially did not know that they had. That is currently estimated to be one in five people. The burden of responsibility for risk-taking lies increasingly with the individual. They have more flexibility, but they need to have as much information as possible made available to them so they can make the best possible decisions and be protected from the scams that many Members have mentioned.

The recommendation for dashboards dates back to 2016, and I am disappointed that it has taken until now to see concrete measures. Further details on timescales for dashboards would be appreciated. In addition, I am interested in hearing from the Minister about the DWP proposals to allow a pension to follow an individual from job to job. Given the increasing responsibility of individuals, that is one way to ensure that people understand their entitlements, save accordingly and, potentially, reduce their dependence on the state pension in future.

On part 5, I want to highlight, like many, clause 123 and the amendment accepted in the other place relating to the treatment of open and closed defined-benefit schemes. I understand that the Pensions Regulator is concerned that the failure and subsequent cost to fund DB schemes is becoming a risk, but a great many DB schemes are still open. For them, being forced to de-risk would mean that they would not be able to continue to afford paying out as high a pension to their members.

In other words, DB schemes would be forced to make less risky investments, such as on Government bonds, which means that they would create less of a return on their investments, but still be required to pay out the same amount. Given that Government bonds and other low-risk investments will have very low rates for the longer term, as a result of covid, the risks to such DB open schemes’ viability becomes even more stark.

Yesterday, like the hon. Member for Birmingham, Selly Oak (Steve McCabe), I met executives of the railways pension scheme. They explained that closed schemes have a fixed end point in sight. They need readily available assets to pay pensions, and they invest in lower risk assets by default. Open-to-new-member schemes are more balanced, with new members replacing older leavers. Such schemes’ needs and objectives are fundamentally different, and they do not need to sell assets. Primary legislation is needed to recognise the different characteristics, and I hope that the Minister will indicate whether that will be supported in Committee.

Finally, the Liberal Democrats welcome clause 124—it is a welcome step—and the Minister’s comments on asset managers earlier. Beyond covid, the climate emergency remains the biggest future challenge to the UK. As I said at the outset, there is much to welcome in the Bill, but I echo the comments of the SNP spokesperson, the hon. Member for Airdrie and Shotts (Neil Gray), that it does not address previous pension injustices, including the persistence of a gender pension gap and the situation experienced by previous members of the plumbers’ pension scheme—like the hon. Member for Gordon (Richard Thomson), I am a member of the APPG and have affected constituents. I hope that those situations will be looked at further in Committee.