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.

Social Security (Up-rating of Benefits) Bill

Wendy Chamberlain Excerpts

2nd reading & 2nd reading: House of Commons & Money resolution & Money resolution: House of Commons
Thursday 1st October 2020 Commons Chamber

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

The Secretary of State and other Members have outlined that state pensions rise each year under the triple lock mechanism, which was introduced by the coalition Government and ensures an increase of whichever is the highest of earnings growth, price inflation or 2.5%. As there is expected to be no average growth in earnings between May and July 2019 and May and July 2020, due to the pandemic, the Government have brought forward this welcome Bill to allow a rise to take place. It also allows for an increase in pension credits. However, the Bill does not state a specific rise in the pension; it simply allows the Government to raise it.

The Liberal Democrats welcome provisions in the Bill that mean all retirees— especially the very poorest, who are claiming pension credits—will see a rise in their benefits. The Government have said that they intend to ensure that the triple lock on the state pension is maintained, but as I said, there is no mention of a specific level of increase in the Bill. It is slightly worrying that the Bill gives the Government the power to raise the state pension but fails to say by how much. If the Government were to raise the state pension by less than 2.5%, they would not be maintaining the triple lock as they have pledged to do. I hope the Minister can explain why there is no such provision in the Bill and commit the Government to at least a 2.5% increase, in line with the triple lock.

It is fair to say that concerns may be expressed about the Bill in relation to intergenerational fairness. Things have been very difficult for young people, whether as a result of issues with exams, what they are now experiencing at university or for those looking to enter the job market. Pensions expert Ian Browne has stated:

“There is a danger that guaranteeing a 2.5 per cent boost to the state pension is perceived to be intergenerationally unfair, given it will provide a considerable boost to pensioners’ income when many others are taking a cut in their pay, working less hours or have lost their jobs altogether.”

The Liberal Democrats support the triple lock on pensions, and I hope the Government do not intend to abandon it. I acknowledge the concerns but would argue that guaranteeing a strong state pension is becoming increasingly critical. It is clear that many working-age people—especially younger people—are not, and are simply unable to be, saving enough for their retirement, and final salary pension schemes are largely a thing of the past. That means that the state pension will become an increasingly important source of retirement income. We tend to think of pensions as supporting older people, but if we were to abandon the triple lock and give smaller and smaller increases over the next few decades, that would erode the retirement income of those who are only just beginning to enter the workplace. I hope the Minister agrees that maintaining the triple lock is imperative for ensuring that the next generation of retirees enjoy a comfortable income.

Another reason why the triple lock is welcome is the position of many older women. Many women rely more on the state pension than men do for their retirement income, as women have traditionally found it harder to build up a private pension due to taking a career break to raise children or to care for relatives. Raising the state pension is therefore critical for many women who rely on it and pension credit for the bulk of their income.

As the shadow Secretary of State, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), said, although it is not addressed in the Bill, there is a risk that the Government will have to scrap the triple lock next year due to an artificial rise in wages. In normal times, the state pension could be expected to increase by about 3% to 4%, and by a minimum of 2.5%, as per the triple lock rules. Given the disruption caused by the pandemic this year, it is highly unlikely that this increase will be far higher, for reasons outlined by other Members. People have lost their jobs in lockdown and been furloughed. As the lockdown lifts, furlough ends, and as the economy recovers, average wage growth will jump significantly. That will show up in the statistics as a massive wage rise, which would mean that the state pension shoots up too. I hope the Minister will give some indication of the Department’s plan for this largely predictable situation.

In short, this Bill is largely uncontroversial and to be welcomed, but there are clearly issues ahead. Although it is clearly an expedited Bill that the Government are looking to pass quickly for the next year only, it remains the case that many will not benefit from the uprating being agreed today—for example, overseas pensioners whose pensions have previously been frozen. I note that the hon. Member for Glasgow South West (Chris Stephens) intends to raise those issues in Committee. The pandemic has had a devastating impact on the elderly and most vulnerable in our society. Providing a degree of financial security is vital, but our approach to pensions must also be considered in respect of future generations and addressing historical inequalities.

Kickstart Scheme

Wendy Chamberlain Excerpts

Thursday 3rd September 2020 Commons Chamber

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

The award-winning Tayport Distillery in my constituency is very keen to take part in the kickstart scheme, but it is much harder for small businesses to apply, as they cannot do so directly if they are not taking on more than 30 people, and, frankly, intermediary bodies’ information seems to be, at best, in development. Given the delays already experienced—we still have a couple of months until the first participants start the scheme—will the Secretary of State make it easier for small businesses, which are the lifeblood of many economies, by allowing them to apply directly?

[Dr Coffey]

The scheme is being set up at pace, so I do not agree with the hon. Lady’s assertions. On small businesses, it is far easier than it has ever been for them to participate in this sort of job creation scheme. I am pleased that she already has businesses showing interest, and I encourage her to direct them to gov.uk/kickstart from where they will be able to get the links to their local employment manager.

Statutory Sick Pay and Protection for Workers

Wendy Chamberlain Excerpts

Wednesday 18th March 2020 Commons Chamber

[Richard Fuller (North East Bedfordshire) (Con)]

I am grateful to you for allowing me to speak, Madam Deputy Speaker, and I apologise to the hon. Member for Wirral West (Margaret Greenwood) that I was not in the Chamber for the first part of her speech. I wanted to listen and make a contribution, and I appreciate the opportunity to do so.

I thank the Opposition for holding this debate, which covers two of the things that are on most people’s minds: reducing the likelihood that I, anyone in my family or anyone I work with will get sick, and providing protection for me if that does happen; and trying to protect my job over the next few weeks and as we recover. The debate has raised a number of issues. I am not going to pick out any particular ones, but I want to make some observations.

The first is what a difference a week has made. It is seven days since the Budget, and these are very different circumstances. We should give credit for all the efforts made in this House and for the measures that the Government have taken to respond as quickly as they can on such a wide range of issues. None of us in this room has the power of the Almighty, and we should understand that we work within human frailties. I will come back to the frailties of the systems that we work within.

Secondly, I would like to add to some of the examples given by the hon. Member for Airdrie and Shotts (Neil Gray) about the public’s response. This week, I have met churches that are working on good neighbourhood schemes. I spoke today with a playwright in the village of Arlesey who is setting up a group to bring skills together in the community, to assist people. We are seeing the best of people, but as some Members have said, we are also seeing the worst of people. In a free society, we can see the best, but we can frequently see the worst. Harley Street doctors are reselling tests at a high price that will not be available to everyone. That is a disgraceful thing for anyone with a professional qualification to do. We have seen pictures of hoarders in shops, meaning that elderly and vulnerable constituents of mine—and, I am sure, of all Members—are not able to access the foodstuffs and other products they need. We have seen the reaction of the bosses of some of the largest companies.

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

On that point, I have been contacted by a constituent who has informed me that their employer is insisting that they cannot work from home because it is waiting for stronger guidance from the Government. Can the Government give clear guidance right now to my constituent’s employer and many others across the country that, if people can work from home, they must?

[Richard Fuller]

I appreciate the hon. Lady’s intervention. I am not speaking for the Government—I am sure the Minister will seek to address that—but I have to say that it sounds to me as though her constituent’s employer is just making an excuse, because the Government have been absolutely clear that it is the right thing to do socially for everyone in this country, if they have a concern, to be able to isolate themselves from others and to work from home. What more does that person need to understand what they should do? I hope they will get that message very clearly from the Front Bench.

On the point of leaders not doing the right thing, the experience of Virgin airlines has been raised. The owner or partial owner of Virgin airlines has suggested that employees should take eight weeks of unpaid leave, and I decided to look at how much that would cost. Eight weeks at the £94.25 rate of statutory sick pay would cost £754 per employee. There are 8,571 employees of Virgin airlines, so if all of them took eight weeks of unpaid leave, that would be a cost of £6.4 million. Sir Richard Branson’s net worth is $3.8 billion. If he is able to get 2% interest on that money for eight weeks, he will earn the equivalent of £9.9 million. So I say: Sir Richard Branson, give up the interest on your wealth for eight weeks, and pay your employees yourself their unpaid leave.

Big or small—a leader of a church in a small village or a leader of the large business—when it comes to looking at the protection of their workers, the time is now, and we will judge them all by their actions. It will be the same for the Government’s actions.

As I say, are we choosing the right policies? We have heard a lot about that today. I congratulate the Government on the staging of the announcements. There is so much pressure—all MPs are under pressure, with loads of questions: small or micro ones, and very large ones covering many issues—but I think the staging of announcements is a good approach, because we need this to bed in with people each day. If we put everything into an announcement on a single day, I would worry that, although we would feel we were communicating, we would find that it was not being received and understood as clearly as it should be.