Commons Chamber

Monday 7th July 2025

(began 5 hours, 26 minutes ago)

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None Portrait Q9. If she will review the temporary worker visa regulations for the fish processing sector. (905022)
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**** Possible New Speaker ****

As it happens, I can. We have extended that to the end of the
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None Portrait Q12. What recent progress her Department has made on improving neighbourhood policing in Leigh and Atherton constituency. (905025)
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visa holders have a chance to share views during the conversation and we will listen to those views very carefully.
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None Portrait Q20. What steps her Department is taking to tackle knife crime. (905033)
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**** Possible New Speaker ****

We are strengthening those checks and we are continuing to assess potential threats in the UK and ensuring we guard against them.
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None Portrait Q22. What steps her Department is taking to tackle the antisocial use of off-road bikes. (905035)
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retailers are part of those conversations, so we are doing everything we can to tackle these organised gangs.
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None Portrait Urgent question: To ask the Chancellor of the Exchequer if she will make a statement on the Government’s performance against the fiscal rules
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moments for the Frontbench to

**** Possible New Speaker ****

Urgent question. To ask the Chancellor if she will make a statement on the government's
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Darren Jones Portrait Rt Hon Darren Jones MP, The Chief Secretary to the Treasury (Bristol North West, Labour)
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make a statement on the government's performance against fiscal rules?

**** Possible New Speaker ****

As the Shadow Chancellor knows,

**** Possible New Speaker ****

As the Shadow Chancellor knows, it is a long-standing convention of this and previous governments not to provide running commentary on the fiscal forecast and it is for the independent Office For Budget Responsibility to make this Responsibility to make this assessment as part of the official economic and fiscal forecast. In the economic and fiscal forecast. In the most recent forecast, published in March alongside the Spring Statement, it was on track. This is Statement, it was on track.

This is a choice and a responsible choice because when you contrast that with because when you contrast that with the actions of the party opposite he the actions of the party opposite he lost control of public finances and we are seeing working people across the country still paying the price. Following the usual process, the Chancellor will request a new fiscal Chancellor will request a new fiscal forecast in the autumn for the annual Budget, including a bit assessment of government performance assessment of government performance against fiscal rules aren't as was confirmed last week, the government has committed to the fiscal rules, has committed to the fiscal rules, which remain nonnegotiable.

We have seen what happens when fiscal rules are put to one side and the members persist may be chuntering but families are still paying the price of the Liz Truss experiment with higher mortgage rates and we will not risk the finances of the nation, as they happen. In contrast, this government is meeting fiscal rules and as a consequence of the decisions of the Chancellor, we are investing billions of pounds on renewing Britain with schools, hospital, affordable public transport, and keeping the nation state.

Any future plans will be set state. Any future plans will be set
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Mel Stride Portrait Rt Hon Sir Mel Stride MP (Central Devon, Conservative)
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The Chancellor said she would not make any commitment that were not fully funded and fully costed. The Chief Secretary to the Treasury has just said that he now expects us to wait until the autumn to hear how they intend to cover the £6 billion of unfunded commitments which their U-turns have run up in the last month alone. I government divided, government racking up unfunded spending, a government wrecking public finances. Why is the chief secretary not prepared to explain how they will fund these U-turns? There are two possible answers.

Either the Treasury have made them without a clue as to how they will be funded or they do now but are refusing to tell us. Either is completely unacceptable. Can he set aside the usual blather that we have just heard and tell us whether he knows how these unfunded commitments will be paid for or is his government simply refusing to say? The house will also have noted the inherent contradiction in the chief secretary sticking to the line that decisions will be made at a physical event in the normal way when that is precisely what the government have not done.

By losing control of the finances and his own Parliament -- party, the government has made decisions outside of a physical event. Can I ask the chief secretary. The Chancellor said at the budget she would not be coming back with more tax rises, is this still the position? Will the chief secretary rule out a wealth tax along with confirming there will be no rise in income tax, National Insurance or VAT? The Chancellor said she would not extend the freeze on tax thresholds because it hurt working people.

Is this still the consideration...

**** Possible New Speaker ****

The shadow Chancellor will now his time.
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Priti Patel Portrait Rt Hon Priti Patel MP (Witham, Conservative)
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As we mark the 20th anniversary of the London terrorist attacks, the victims, survivors and their families and emergency services who responded that they continue to be in our thoughts. Two weeks have passed since US airstrikes against Iranians facilities. Does the Minister have an impact assessment -- assessment of the impact? Given Tehran's refusal to cooperate, is the Minister and the Department discussions with partners about snapback sanctions being applied and other measures? Is he concerned that Iran will continue to pursue nuclear weapons and the entire program? And with the information received with discussions in America -- in discussions with America, will the government finally come off the fence about those strikes and agree with this side of the house that they were absolutely necessary? An interest in the region, can he assure us that he is taking continued steps to bolster the security of our military assets and personnel? And what assessment has he made of rands listed missile capabilities and the threat that they continue to pose to our interests? We agreed that Iran can never have a nuclear bomb but the regime is a fundamental menace and so many other ways, sponsoring terrorism across the Middle East and threatening our own country with sophisticated plots.

What more will he do to take down the finance structures propping up the regime's destabilising activities and to stand with the brave people of Iran, including human rights defenders who face the most barbaric oppression. With the Iranian regime and its terrorist proxies in a weakened state due to Israel and America's actions, does the Minister agree that this is a moment for the government to publish a serious strategy to roll back the regime's malign influence, and finally, can he give an update on the discussions he has had with partners about the US plans for a ceasefire in Gaza, US plans for a ceasefire in Gaza, freeing hostages, aid access and how freeing hostages, aid access and how
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Bridget Phillipson Portrait Rt Hon Bridget Phillipson MP, The Secretary of State for Education (Houghton and Sunderland South, Labour)
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Statement Statement Secretary Statement Secretary of Statement Secretary of State Statement Secretary of State for Education Bridget Phillipson.

**** Possible New Speaker ****

Thank you Madam Deputy Speaker. With permission I will make a statement to update the House on statement to update the House on this government's vital work to change our country for good by giving every child the best start in giving every child the best start in life. The focus today is firmly on our youngest children, but the impact will be much broader. This government is building a stronger ferrous society, and will lay the ferrous society, and will lay the foundations in the earliest years of our children's lives.

Because we are determined to tackle the root causes of problems, not just the symptoms, of problems, not just the symptoms, we begin at the start. The we begin at the start. The inequalities that stay in our country, the way that opportunities heaped on some but hidden from others. Those disparities don't suddenly spring up in adulthood. Our suddenly spring up in adulthood. Our babies are born into an unequal world, and the inequality grows with world, and the inequality grows with them. Right from the very first days when we carry them home from hospital.

Those early differences in hospital. Those early differences in the support families can get, and the support families can get, and the early education a child and the parents can access. In the opportunities they have to start exploring. These are the differences, these and many more, differences, these and many more, that we all know take hold early on. The winds of fortune there already The winds of fortune there already on the first day of school. Gail on the backs of some, a blizzard in the face of others.

These are the differences that means that some children arrive in the classroom not yet ready to learn. These are the differences that means that while two thirds of children reach a good level of development by age 5, one third do not. These are the differences that fuel the injustice that half of our children on free school meals miss that important milestone. A Labour government will not tolerate our children being failed like this. Within months of taking office, we set out our ambition and our Plan for Change, a record share of children reaching a good level of development by the age of five.

Because it matters so much for those young lives. But it goes further, it sets the tone. 40% of the disadvantage gap at the age of 16 is already there at age 5. Next month we know that young people across the country will pick up their exam results. Some will do well, but sadly some others will be disappointed. Those results day stories of smiles and frowns, though stories about young people, though stories begin to be written in the first years of their lives.

If we want to build an education system where every child can achieve and thrive, if we want to grow a society where the opportunity to get on is open to all, if we want to deliver the change this country so desperately needs, we have to focus on the early years. We have to give every child the best start in life. And that is why it my priority as Education Secretary lies there. It is why 12 months after entering government, I am proud to be here today to set out our best start in life strategy throughout the term it will change this country for good.

Giving every child the best start in life begins with families. Becoming a parent or a carer is full of joy and wonder. We all know it can sometimes be hard and it can feel isolating. Parents and carers need- to-know that they can tap into a community of support. They need to know they are not alone. But we are falling short. One in four families with children under five struggle to get advice. For families on low incomes it is one in three.

It wasn't was like this. There was a time when government cares deeply about children's development. Members across this House will know all about Sure Start, about the quiet revolution in the lives of our children carried out by the last Labour government. Sure Start was one of the proudest achievement of that Labour government. I'm proud today to build on its legacy. Because we remember all the good it did for our children, our communities, and for our country. Sure Start raised exam results and reduced hospitalisations.

It improved early identification. It boosted physical health. It boosted mental health. It reached disadvantaged families and it made a difference to their lives. Sure Start was a triumph. Of course it wasn't perfect, no program ever is. But it worked. In so many ways and for so many families. But never more so that when it stuck to its principles. When it's brought together the excellent services parents need. At the heart of its success with the children centres. One-stop shops where families knew they could go for help.

A comforting and consistent offer of support all in one place. There are many ways in which 14 years of Conservative government damaged our country in our society. But the vandalism they inflicted on the lives of our youngest children, tearing the services out of communities, deepening inequalities, abandoning families. They should never be forgotten. Today this government will write this terrible wrong and restore hope to families. Our best to start service will honour the proud legacy of Sure Start.

Today's Labour government stands on the shoulders of those who went before. To look forward to the better future our children deserve not back to the past. That is how we will deliver for a new generation of families. We will introduce a new best start family service in best start family hubs, the first step to a national family service which ensures they can get the right support their children from conception to age 5. Giving parents the freedom to focus on loving their children. Today as we announce the National year of reading for 2026 this morning, we want to give parents more time to read with their children.

Grow a love of learning that starts in the home and flows right throughout a child's life. Best start at family hubs will be open to all, rooted in disadvantaged communities. There were nurseries, childminders, schools, health centres, libraries and local voluntary groups. The whole community coming together around one goal, to give children the best possible start in life. Our best start digital service into your ready for the future. Linking families to the local best start family hubs and looking at how the power of AI can help parents find the right information.

We will make early education and care more affordable and easier to access. From the day this government won the backing of the people, we have set up delivering the entitlement of 30 hours of government funded childcare each week for working families. Backed by funding reaching £9 billion next year. Last July we inherited a pledge without a plan. But this government is delivering on our promise to parents because I know how much that matters. The promises made promises kept. To the future of our country and to the trust between families and the government.

The cost of childcare no longer pricing parents out of the jobs they love. Instead choice and freedom to work the hours they want. And an average of £7500 each year back in their pockets. I want to thank all of those who are working with us to drive that change. From private to school-based nurseries, group based providers to childminders, dedicated professionals and early years educators transforming life chances. With almost £370 million provided by the Chancellor at the Spending Review, we are building and expanding more nurseries in primary schools.

With the first of 6000 extra places from September this year. Soon enough, 80% of childcare in this country will be government backed. The message is clear, this Labour government is on the side of families. The Labour Party, the party or family. But it also means that childcare must be better linked to educational priorities. Better geared to closing attainment gap. Better focused on all of our children succeeding at school. Our early years educators are too often hidden heroes in our communities. And it is past time we back them.

We will raise the status of our workforce. A new professional register because working in early years is just that, a profession. More high quality training for staff, lighted by a golden thread of the best evidence. And we will train more early years teachers because we know the difference they make to young ones. Our stronger practice hubs will double in number. We will offer new financial incentives to attract and keep rate early years teachers in nurseries that serve the most disadvantaged communities.

Every child deserves a great education, and a great early start in life and that must extend to our children with SEND. Early intervention can work wonders to lower barriers to learning. Under this government, inclusive practice This government is driving a decade of national renewal, but there can be no decade of renewal for our country without a decade of renewal for our children, and this is urgent. Children only get one chance. If opportunities are missed, if parents don't get what they need, if the nursery down the road hasn't been built yet, there is no going back.

For 14 years, children's lives marched on and services were ripped away, and I won't stand back and watch as more and more children are let down. Through the strategy, I am bringing change for all of our families, communities, but above all, change for our children. It is for them that our strategy was written. It is for them that we will see it through. To each and every child from the first day in this world, their best start in life, and I commend this statement to the house.

house.
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Laura Trott Portrait Rt Hon Laura Trott MP (Sevenoaks, Conservative)
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Thank you. When the right honourable lady was in opposition, she criticised every announcement simply because it came from the Conservatives. Take childcare. She called the ours model that she talked about today broken and she said she would have a new childcare said she would have a new childcare system like the creation of the NHS. Yet now in government, she trumpets the childcare system the Conservatives designed as one of her main achievements. And family hubs, she once dismissed them as a poor imitation but now after last week's chaos, what is she turning to for the government's research? Yes, the Conservatives family health plans.

That is why I was surprised to hear this weekend how claims that this can only happen under Labour. The irony being this program was started under the Conservatives. We didn't hear that today. And the expansion wasn't in the Labour manifesto. It was in the conservative one. Her strategy document published today has even lifted the name of our best for life plan published in 2021. Imitation really is the sincerest form of flattery, for which I thank the right honourable lady.

Perhaps recent events have reminded her that Labour doesn't have a monopoly on good ideas, if indeed any good ideas at all. Now, I won't take her approach which was opposition for opposition's sake. I agree in principle with much of what has been proposed today, but as with free school meals and the children's care, I will do my job and point out the cup, raise concern and raise proper answers. The lady might consider engaging with the questions this time instead of falling back on a rant about the Conservatives which frankly convinces no one and improves nothing.

So, with that in mind, is this genuinely new money being announced today or just re- announcement of the family hubs money from the spending review? The honourable lady talks about £500 million of funding which financial years and how many it is this cover? Is the funding for new hubs only or will it support existing ones too? Well there be new capital funding for bricks and mortar provision? And, as she acknowledged, it failed to effectively target support to those who needed it most.

What has been done differently to avoid making the same mistakes? When I visited a family have been Dartford earlier this year, I was shocked to hear how many mothers are being referred because they are facing domestic violence from their own children. Children who grow up witnessing this abuse at home. What data is being collected through these helps to trash National tends like this, and how is that informing the governments response to the most pressing issues facing these families? I welcome the government's focus on school readiness.

Children who live through lockdown arriving at school with speech delays and gaps in basic skills. It is one of COVID's longest shadows. But if we are serious about tackling it, we need to be honest about responsibility. What. Parents and what for to teachers? Teachers are stepping in where parents are not. They do it because they care, but it is not their job to party train, brush teeth or teach children to get dressed. Children with SEND need tailored support, different conversation entirely.

But when it comes to most children, that support needs to start at home, so while the government has set a target for school readiness, it is using schools at the end of reception. We need to target what affect school readiness and what happens at home, not the brilliant work of reception teachers. The right honourable lady has said that her number one priority was early years, but the rhetoric does not match the reality. Nurseries across the country are on the brink because of decisions her government has made.

We welcome the rollout of our early years offer, the lack of conversation for the increases forcing providers to either hike themes or shut their doors. There is no use getting out incentive payments for jobs at nurseries if providers are closing because they have been clobbered with nets. And finally, I must raise the issue of SEND. This is been splashed across national newspapers and despite the record refrains from the Department, the honourable lady has failed to give parents any reassurance over the weekend.

Her anxiety, as we all know, is through the roof, so I give her one more opportunity. Can she confirm that no parent or child will have their rights to support reduced replaced or removed as a result of her planned changes because right now, this is a government devoid of ideas. A year on, they are defined by broken promises and U-turns. Parents need and deserve answers to what the government is doing and until that happens, they have every reason to doubt everything this government has to say.
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Bridget Phillipson Portrait Rt Hon Bridget Phillipson MP, The Secretary of State for Education (Houghton and Sunderland South, Labour)
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Every time I come here to announce the positive changes that a Labour government is bringing, whether free breakfast clubs, school nurseries or a best start in life strategy, what is the response of the right honourable lady? The same outrage and the same negativity and the same petty point scoring. No provision for the future of our education system for the best start in life, and we can talk all they in life, and we can talk all they want.

This is what they put in an unsuccessful manifesto, a post dated cheque if ever there was one. And the British people judge their politicians rightly, not what they claim they will do but what they actually deliver, and it is on this basis that the government will be judged. She asks a number of detailed questions about the nature of what we are delivering. We are travelling in just and invest our family hubs across the SR period. All of the detail is there for her to see through the spending review and in the strategy we publish today.

This is additional investment that we are putting into supporting our youngest children because this Labour government prioritises the early years and wants to make sure that all of our children get the best start in life. The only policy, the only policy that the right honourable lady has is to cut budgets in state schools and hand tax breaks private schools. That is it. Now the right honourable lady

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.$$NEWLINE Order. I certainly want to listen to what the secretary want to listen to what the secretary of state for education has got to say.

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say. Thank you. The right honourable lady asks about the needs of children with special educational children with special educational needs and disabilities. And I would say to all parents of children with SEND that there is no responsibility SEND that there is no responsibility I take more seriously than our responsibility to some of the most vulnerable children in our country, and we will ensure as a government that children get better access to that children get better access to more support, strengthen support with a much sharper focus on early with a much sharper focus on early intervention, and that is why we are investing more in support for investing more in support for children with SEND.

740 £740 into more placements, better training and support for children working with support for children working with children with SEND, but there is no group that suffered most under the last government than children with SEND. And what I would say to the right honourable lady is that a right honourable lady is that a degree of humility on her part is well overdue. This is a serious and well overdue. This is a serious and complex area, one that we as a government are determined to get right.

They ducked the difficult decisions. They failed to put in point things so that the secretary described it as a lose lose lose. This government will make sure that all of our children get the best start in life, including children with SEND, and that is why through the schools paper, we will ensure that all of our children get better outcomes than they have at the moment. We will step up and deliver the change that our children need, and we will make sure for our best strategy, families once again get early support, timely intervention, access to healthcare, the chance to speak about the challenges and joys of parenting, and that is why I am so proud that, in the first year of so proud that, in the first year of a Labour government, we are delivering more that they achieved in 14 years.
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Munira Wilson Portrait Munira Wilson MP (Twickenham, Liberal Democrat)
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Thank you. Every child deserves to have the very best start in life possible, so I welcome any measures to tackle inequality and improve support for early years and support for families. So, I welcome today's for families. So, I welcome today's announcements, both on the hubs and on the announcements around the early years workforce and helping to raise the professional status of those who work with children in early years, something that Liberal Democrats have long been calling for, given the expertise required in the profession, and with the hubs as we have heard, there is a great opportunity to identify special needs nerdy and important advice for needs nerdy and important advice for I hope the government will start by reversing the National Insurance hike for early years and learning centres, and reducing the rates for paid providers to ensure they are covering the costs of delivering high quality care and early years education because we do know that many nurseries across the country are struggling.

Whilst I have the Secretary of State tension on early years, can I raise with her the tragic cases of someone in Stockport and Cheadle and the children at the Twickenham Green Nursery in my constituency were completely failed by the early years providers, at the hands of extremely cruel vicious and caring staff. The verdicts in both of those cases have been utterly shocking. I know the Minister sitting next to the Secretary of State met with my honourable friend from Cheadle last week.

Although her announcement did not include it, I have read in news reports that the government will be increasing Ofsted inspections for nurseries, something that my honourable friend from Cheadle and myself are pressing for. But we also need to see a strengthening of the early years framework to include the use of CCTV. One sentence if I may, can I press the Secretary of State to put the parents and carers of children with and the across the country out of their misery and rule out...
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Bridget Phillipson Portrait Rt Hon Bridget Phillipson MP, The Secretary of State for Education (Houghton and Sunderland South, Labour)
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Secretary of State.

**** Possible New Speaker ****

Thank you Madam Deputy Speaker.

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Thank you Madam Deputy Speaker. The honourable lady asked a number The honourable lady asked a number of questions. I'm grateful to the warm welcome she is given to the government intends to make sure children get the best start in life. children get the best start in life. When it comes to the early years system, she will know that as of next year we are investing money into the system as well as a near doubling of the pupil premium. That goes hand-in-hand with the £75 million expansion grant to expand million expansion grant to expand the sector ahead of a September further expansion.

In addition, we are working across government as the are working across government as the strategy sets out about how we can consider simplification in funding, to make sure it is working in the to make sure it is working in the way intended for providers and parents. Of course I would be happy parents. Of course I would be happy to discuss further issues with her. As she says, the Minister for early years education did meet with the years education did meet with the family and with the honourable Member last week.

Just to answer the question in terms of Ofsted, from next April, Ofsted will inspect new early years providers and we will move towards inspecting all providers at least once every four years compared to six years years compared to six years currently. Alongside additional investment to strengthen quality assurance and inspected training to make sure all children are safe love and protected. I would also join her in sending my condolences to families affected.
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Bridget Phillipson Portrait Rt Hon Bridget Phillipson MP, The Secretary of State for Education (Houghton and Sunderland South, Labour)
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I am grateful to my honourable friend for her questions, and where it comes to the statutory override that she mentions, I know she takes a serious interest in this area. We recognise that local authorities will need support to a reformed SEND system. It is why we have done this at the spending review, and she knows that we have set out and will set out more detail around this for local authorities. In terms of the digital offer, I appreciate the point that she raises around ensuring that all families can access services, and there are still challenges around digital exclusion, and she is right to draw attention to those.

It is why, alongside the digital offer with how that aligns with the offer before long, it is why effective outreach support and engagement is also critical, and learning the lessons, one of the key lessons that I think we should all take from that and where the evidence is incredibly strong is that it was at its best at its most effective had the greatest reach and impact where it came to disadvantaged children where there was strong engagement with communities, and through the work of the Cabinet Office has been leading, we have learned some really important ways in which we can ensure that more disadvantaged parents with children like poverty are able to access those services, and as we take forward the rollout, we will ensure that we take that.
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Jenny Riddell-Carpenter Portrait Jenny Riddell-Carpenter MP (Suffolk Coastal, Labour)
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They say it takes a village to raise a child and it takes a Labour Government to give every child the best start in life and I thank the Secretary of State for the announcement. She may well know that not a penny is spent on family hubs in Suffolk at the moment. She talked about how this will be a game changer for children with SEND and she also mentioned future provision being inclusive. Will she outline in rural areas where we have declining populations in primary schools whether there is opportunity to use the increase in capacity to work and increase provision for SEND? Kick I'm grateful for that and through the announcement, her community will the announcement, her community will benefit from funding that will allow benefit from funding that will allow a Best Start family hub and wider services through that and she's right to identify that the following right to identify that the following birthrate does present a challenge, but also allows us to look at but also allows us to look at delivering better support for children.

It's a key priority of this Labour Government to deliver this Labour Government to deliver more specialist provision within mainstream. I've seen examples across the country where children across the country where children have been able to go to school but with targeted specialist support that is needed and they can spend some time in a mainstream setting but get the additional specialist support required. That is why through capital settlement at the Spending Review, we will deliver Spending Review, we will deliver more support for children across the country.

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None Portrait Presentation of Bills
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Water Regulation Bill.
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None Portrait Legislation: The Pension Schemes Bill: Second Reading
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12 September. The clerk will now proceed to read the orders of the

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day. Pension Schemes Bill. Second Reading.
18:45
Torsten Bell Portrait Torsten Bell MP, The Parliamentary Under-Secretary of State for Work and Pensions (Swansea West, Labour)
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Reading. Minister to move second reading. Minister.

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Minister. I beg the bill will now be read for a second time. This is a bill that aims to deliver fundamental that aims to deliver fundamental reforms to our pension landscape. It is good to see that the prospect of discussing along, slightly technical pensions bill has seen so many members flooding into the house today. These are reforms on which there is a broad consensus across the pensions industry. They also build on at least something of a consensus across this House.

In its principal focus on higher return on pension savers, the bill also response to specific responsibilities that we hold in this house. It is because of decisions of Parliament that over the past 10 years, something significant has happened. British workers have gone back into the habit of saving for a pension. Today, over 22 million workers are building up a pension fund which represents a large increase since 2012 when Parliament introduced a policy of automatically enrolling workers.

There is lots to celebrate as more save. There is no ground at all for complacency around what they all for complacency around what they If these pension schemes do not deliver good investment returns, that is a problem for the employer, not the saviour. For tomorrow's retirees with a defined contribution pension, they are taking all the risk and nothing is guaranteed. How well the scheme that they put money into performance matters usually. Even small differences in how fast the part drawers can make a massive difference over time.

This is the system that the House has chosen and the onus is on us to ensure it delivers but the pension system today is to fragmented and too little does it ensure savings work to support people in retirement and it is too disconnected from the economy and that is the case for change. The UK has the second- largest system in the world, worth £2 trillion, and is the largest source of domestic capital, underpinning not only the retirement we look forward to but the investment on which future prosperity depends but the system has too few big pension schemes.

They are less than 10 providers who currently have £25 billion or more in assets. There is already a consolidation process under way with the number of schemes reducing by around 10% a year and this bill will add to the winnings from that consolidation and implements the findings of the review with the creation of so-called mega funds and for the DC requirements we will look for multi-employer schemes to have at least £25 billion in assets by 2030 or a critical pathway to be there by 2035.

This would deliver lower cost, diversified investment and better savings for people. As this House as discussed before, in May, 17 major pension providers managing about 90% of active pension signed the Mansion House Accord, and Pledged to put 10% into projects and infrastructure by 2030 with 5% that I said that this could support better outcomes and back clean energy developments or fast-growing industries. To support this, there industries. To support this, there is a reserve power in the bill would mean a set percentage would be invested into wider asset classes, reflecting the reality that the industry has called for the shift for some time but the words out slow to translate into action.



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I am a trustee of the Parliamentary Pension Fund. This is Parliamentary Pension Fund. This is the right direction of travel to consolidate, so there are better experts who can advance but I have experts who can advance but I have slight concerns. We have got to be slight concerns. We have got to be the schemes to invest in and they must make sure they get the returns and so how do we make sure it actively delivers on both sides of actively delivers on both sides of the equation? I thank her for the the equation? I thank her for the question and for the oversight of pensions and I think it is reassuring.

I will come directly reassuring. I will come directly onto... It is reassuring. Directly onto the points she makes because it is one question that members on all sides of the House will want to raise but with traditionally duty, the legislation explicitly the legislation explicitly recognises the duty of trustees towards members and, as I was towards members and, as I was saying, we support this industry- led...

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led... In the last Parliament, a number of us raise concerns about the of us raise concerns about the administration of defined benefit schemes from, among others, DP, Shell, Hewlett-Packard, and I think the view was shared by the then- chair of the select committee that another problem was insufficient independence and oversight by defined benefit pension trustees. For in this bill protects the

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position of pensioners in retirement in these schemes? The right honourable member

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The right honourable member invites me to skip forward in my invites me to skip forward in my speech, which is a long speech. That is not the support I was hoping for. is not the support I was hoping for. Understandable but harsh. Coming Understandable but harsh. Coming onto some of the points in terms of referring particularly to indexation before 1997 and I will address that before 1997 and I will address that point in some time but as I said the bill includes reserve power that bill includes reserve power that will require a set investment into larger assets in the scheme and larger assets in the scheme and reflects the wider calls have been made but have not allowed to take place.

Where employers focus too place. Where employers focus too narrowly on the lowest charges narrowly on the lowest charges rather than the highest returns for savers, there are problems. I do not intend to use this power in the bill but the existence gives clarity to but the existence gives clarity to the editor that change will come this time. Some will argue, and I this time. Some will argue, and I will come to that, that it somehow undermines the duty of providers to pensioners but this is wrong.

The bill includes clear safeguards to prioritise the interests of savers and is consistent with the core principle of additionally duties. There is an explicit mechanism that I discussed with the main three parties in the house to allow providers to opt out if there is a detriment to savers and second, and I think this is a key point, savers are being let down by the status quo and there is a reason major pension schemes across the rest of the world are already investing in the more diverse range of assets at the fragmentation within the industry happens within Vegas, not just between them with some insurers having thousands of legacy funds and the clause 41 extends the ability that the trust-based schemes already had to provide this and they can transfer to another arrangement without the proactive individual consent if it is individually certified as being in the best interests of the members.

Another point I hope is of common ground is we have to do more to understand the untapped potential in England and Wales. We need skill to get the most out of the £400 billion of assets and the billable tension census into concrete action, providing for the assets to be fully consolidated into assets to be fully consolidated into Assets are managed effectively and at skill with each authority continuing to set an investment strategy including how much local investment they expect to see.

These reforms will build on the strong track record of the Local Government Pension Scheme allowing pension schemes to work with mayoral authorities and bigger pools will help with private pension funds and other investors getting into investments across the country. The measures to build scale and support investment and deliver for savers but the bill does more to ensure rocky people get the maximum bang for buck. Move away from a narrow focus on cost, clause 5 provides a U-value for money in the framework and will for the first time I standardise metrics to prove we are value for money and schemes themselves will deliver on what is delivered.

Regulators will have the power to force consolidation, protecting savers from getting stuck in schemes. We are addressing the small pension pots issue was that I was doorknocking in Swansea and a woman told me something was riding her up and it was not me knocking on the door. Trying to keep track talkback very unsupportive audience! Trying to keep track of the savings from small jobs and the only thing that was worse was her husband kept going on about it and there are no 30 million of the small pension funds with £400,000 or less floating around with another 1 million coming this year at this creates hassle with £31 billion in pension pots estimated to be lost, costing the industry to ring £40 billion a year to administer and so clause 20 provides the power to bring the pots together into one scheme that has been certified as delivering good value.

Anyone that wants can opt out, but the change could boost the pension pot of an average earner by around £1000. Once you have a pension pot, the question is, what do you do with it? We talk about pension freedom but there's nothing liberating about the complexity currently involved in turning a pension pot into retirement income because you have to consult it, choose between annuities, lump sums, cashing out, analyse providers and products that are countless. Choice can be a good thing but the overwhelming complexity is not with 77% of savers here to access the pension do not have a clear plan of how to do so.



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I agree with a lot of what the Minister is saying. Given what was said by the FCA untargeted support, said by the FCA untargeted support, would he look again at what is being resisted by maps because they are not prepared to work with pension schemes to allow automatic appointments so that pension savers can be guided to better outcomes and can be guided to better outcomes and I realise they are saying they are I realise they are saying they are too busy but if we could get people to engage at the age of 50, we would see vastly different outcomes if they invested properly and in better

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ways with pensions. I thanked him for the question and the discussions we've had on and the discussions we've had on this important topic. He spent years working on this and it raises the priority for maps right now is to let the system set up to deal with let the system set up to deal with the calls which will come when they are ruled out and I will keep this point in mind and he and other honourable members have written about that point and, as I promised in the letter, I will keep it under in the letter, I will keep it under review.

It must deliver when pension dashboards come on...

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dashboards come on... I thank the Minister for giving way. Can he update us on if we will see the introduction of the patient dashboard?

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Recent progress on the Pension

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Recent progress on the Pension Dashboard needs a little less laughing I was saying some of the first connections driving progress and they are due to be connected by the autumn of 2036 but I will the autumn of 2036 but I will provide good notice of a firm date for that point and my honourable friend and near neighbour has friend and near neighbour has secured himself exactly that happening. We must make the choice is clear for people as they move from building savings into using them and the bill gives the ability them and the bill gives the ability to thrive default solutions and there is clear potential to opt out there is clear potential to opt out and it will support higher returns because providers can invest in assets for longer if they don't have to secure the idea that they make a to secure the idea that they make a provide at retirement.

Each of the measures to drive up the tone for have their own impact at the have their own impact at the cumulative impact matters most, especially compounded over decades especially compounded over decades to save for a pension and to provide skill, someone in average earnings saving over the edge of your could see their retirement pot is due by £29,000 thanks to the high returns the bill supports and it's a significant increase and for something that should matter to all of us and it will transform the landscape.

With £1.2 trillion of assets supporting around a million people, benefit schemes have already been raised by one honourable member and the improved funding position is usually welcome. Around 75% are now in surplus, enabling far more schemes to reach buyout with Alan Shearer and many more welcome the security it offers and book on the security but others may not and will stay on the scheme for a while. This will provide the trustees with a wider range of options and clause if you think it's more trustees the option to share safely funds safely and that is something they have already done.



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What will this bill do for Patricia Kennedy, my constituent, and other people who are asking for and other people who are asking for more action on pre-1999 more action on pre-1999 more action on pre-1999 Let me use this opportunity to acknowledge that my Honourable friend has raised this before. Some friend has raised this before. Some people do not see the increases are expected on their pensions. What I expected on their pensions. What I would say is that one of the things would say is that one of the things that surplus release may allow is that surplus release may allow is that trustees may at that point have to consider how can members benefit from any release that takes place.

One thing they may well want to One thing they may well want to prioritise, and I would encourage them to prioritise this, is that indexation that they haven't received it on their pre-1997...

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received it on their pre-1997... I'm extremely grateful to the Minister for taking my intervention and for the letter he sent on 30 and for the letter he sent on 30 June about schemes of this sort and in particular one involving the Exxon Mobil pension scheme of this type. The problem is that his letter says encouragingly, following our reforms trustees will continue to consider the correct balance of interest between members and the sponsoring employer when making decisions about release of surplus funds.

Trustees will be responsible for determining how members may benefit from any release of surplus and have a suite of options to choose from." The trouble is that these pensions have received a letter from the trustees of the Exxon Mobil pension fund saying the power to avoid discretionary interest increases is held by SA Petroleum Co Ltd. Whether or not any discretionary increases provided -- release is provided... This may be a loophole that he needs to address if the trustees cannot abort the surplus benefit and the company says

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no, it's not going to benefit my constituents. I thank my honourable friend for

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I thank my honourable friend for raising that specific case. I will look at it in more detail for him. What I would say is that he is raising a point that will have more general application, which means that more schemes will have a range of roles. He is raising one of those which is about discretionary increases. And consistent across all increases. And consistent across all the schemes with the legislation we are bringing in is that trustees must agree for any surplus to be released.

It may be the case that released. It may be the case that the employer in the details of those the employer in the details of those scheme rules is required to agree to a discretionary increase but the trustees are perfectly within their trustees are perfectly within their rights to request that that is part of an agreement that leads to a separate increase. I don't think that... In any circumstances, the that... In any circumstances, the trustees would need to agree to the surplus increase. They can say they surplus increase.

They can say they will only agree to it on the basis will only agree to it on the basis of change. Happy to discuss that with him further. I think there may

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be other schemes in a similar situation. Of course. I'm grateful to the Minister. The way in which he was talking about insurance buyout suggests that insurance buyout is still somehow a gold standard. Can he reassure the House that he is seeking to flatten the playing field such that this increased choice available to benefit schemes means that perpetual's that run on which started off as the municipal employees retirement scheme and now worth billions of dollars, that there is safety in these funds as

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there is with insurance buyout? I know the honourable member has

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I know the honourable member has a long-standing interest in super a long-standing interest in super funds. I think it is relevant to the point he is raising. It is a different receipt of a range of options is what I would say. These

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options is what I would say. These clauses provide... I apologise. Just in relation to the surplus funds, obviously, that can only happen where there are surplus funds. There may not be surplus funds. There may not be surplus funds in all the circumstances. I just wanted to give him a bit of a heads up that in relation to those which is about employee benefits, it would be useful at committee stage to have a bit more information about to have a bit more information about what analysis the government has done of how many of these surplus releases will benefit the employees, rather than the employers, which I rather than the employers, which I understand the government wants to invest in growing the company as well, for what kind of spite does he

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well, for what kind of spite does he expect to see split does he expect to see? It's nice to be able to surprise

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It's nice to be able to surprise sometimes on the upside. I would expect in most cases employees to expect in most cases employees to benefit. Trustees are in the driving seat and want to consider how employers and employees will benefit from any surplus release. Obviously, the exact split between the two will be down to the individual case. We will discuss this at committee. I want to reassure the House that this is not about return to the 1990s free from.

Regulation has been transformed since then. Schemes will have to remain well funded and trustees remain in the driving seat. They were only agree to release where it is in members interests. As I said, not all schemes are able to afford buyout. Not all schemes are able to afford to buy out members pensions with insurance, sorry. The bill also introduces the long- awaited regime for super funds. And alternative means to consolidate DB-DC capabilities. As they grow super funds will have potential to increase invest in more productive increases.

It increases a savers security. The Pension Protection Fund is the security backstop for DB members. It celebrate its 20th anniversary this year and secures the pensions of over 2000 hundred 95,000 people -- 295,000 people. They can reduce their levy were appropriate. Second, ensuring scheme information will be displayed on the dashboard as they come on stream. Thirdly, and most importantly is a change to support people going through the toughest of times. Several Honourable members in this house have called for, we are extending the definition of a terminal illness from 1/6 to a 12 month process -- prognosis for those who need it most.

-- 6-month. This bill also legislates to provide clarity. The decisions of the pension ombudsman may be enforced without going into a further court. Had been clear that the government will also look to introduce legislation to give effect to Pension Schemes the ability to retrospectively confirm confirmation for historical benefit changes to meet necessary centres. Governments are like people and what they respect. They can bit of thinking about pensions until it is too late. And determined not to do that.

Were ramping up the pace of pension reforms of the past two decades have delivered a big win. More people have been saving. It is only have to deal. Today, too many are on course for retirement is less than they deserve and less than the extended. This bill focuses on securing higher returns for savers, supporting higher income in retirement without asking any more than is necessary of workers living standards in the here and now. It sits within wider pensions reforms as we seek to build not just savings but but pensions system.

System that delivers comfortable retirement and underpins the country's future prosperity. Legislation for multiplayer collective defined contribution schemes will be introduced as soon as possible after the summer recess and we will shortly launch the next phase of our pension review to complete the job by building a system that is strong, fair and sustainable. It is time to make sure pension savings work is hard for all of our constituents as our constituents work to earn them. I commend this bill to the House.
19:09
Mark Garnier Portrait Mark Garnier MP (Wyre Forest, Conservative)
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That question is that this bill now be read a second time. I call

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the Shadow Minister. Thank you very much indeed. It is a pleasure to be here this evening a pleasure to be here this evening with the. Can I start by welcoming the Minister to his seat. He's been the Minister to his seat. He's been a couple of days over when you. He has taken a very important bill to Parliament. It is good to see him Parliament. It is good to see him and I look forward to working constructively with him as we progress this through the House.

Well this bill is not perfect, he Well this bill is not perfect, he will be pleased to hear there is cross-party consensus to be found in much of the planned changes. That's because we all want our pension system to be working better. If you rewind back to 2010, the private pension system that was not quite ideal, the move to find DB motivate ideal, the move to find DB motivate ideal, the move to find DB motivate -- dominated system left millions of people buying.

In 2011 cover nearly 40% of people were saving for our 40% of people were saving for our quiz pension. The change was an quiz pension. The change was an overwhelming can -- success. Now eligible employers are saving into a eligible employers are saving into a pension. The remaining 10% of the doubt 10 to do so because of sound investment advice. Like this, we are investment advice. Like this, we are proud on the side of the house to have offered support to our pensioners.

The triple lock we delivered lifted pensioners out of poverty. Workers deserve dignity in retirement, not just a safety net in old age. They deserve to look forward to their later years with hope, not anxiety. With choice, not constrained. And that is why before the last election, the previous government had turned its attention to two central issues. One, giving the best -- getting the best value for money out of a Pension Schemes. I will come to pension advocacy later in the speech.

Let me start by recognising some of the positive measures contained in this bill to make our pension funds work better for savers. With the party opposite gets pension policy right, it is often by building on Conservative legacy. Recognising what works and seeking to extend it. That is why we broadly support the measures in this bill which seeks to consolidate the enrolment. We also welcome the continued progress towards a pensions dashboard. This will revolutionise the way people access pension information. For too long, the complexity and fragmentation of pension pots, as we had before, has less -- left savers consumed and disengaged.

-- Confused and disengaged. If you are thinking actively about your retirement You might have spent countless hours trying to track down all the pensions. We will support measures in this bill to improve the implementation of the dashboard and it's a very. I also want to highlight the question of large megafunds. As well as consolidation megafunds. As well as consolidation of local Pension Schemes, the LGPS is one of the largest Pension Schemes in the UK and has 6.7 million members.

Yet it is highly fragmented as we have heard. There is a great deal of divergence in the funding positions of these councils, even amongst geographic neighbours. They range from Kensington and Chelsea which has level of 207% to local authorities such as Brent which were underfunded in 2022, according to review. We support the according to review. We support the concept of microphones, there are legitimate questions I have which I hope the Minister will address -- megafunds.

I first got my teeth in politics as a counsellor. Soon after being elected, I was given the task of being appointed as the chair of the Finance authority. One of our tasks was overseeing the performance of pension funds. Let me assure the house that Forest of Dean is a truly wonderful place but it is not the city of London. Our finance committee was made up of a dedicated local council but we came to scrutinising pension funds, we were out of our depth, to put it kindly.

Meanwhile, pension fund managers seemed to treat a trip to Gloucestershire like other expedition into the outer reaches of the earth. One thing struck me when it came to small local government pension funds. They did not work. It's not just in government. Small funds are not fit purpose, as we heard from the Minister, in a global investment and. The creation of larger funds will enable investment efficiency and ultimately better value for money from members. It will allow pension funds to compete at the world stage, to invest more in UK infrastructure and to deliver high returns for British savers.

There are other areas of the bill we support and welcome. The consolidation of small fragmented pension pots is long overdue reform, and bringing these together will reduce costs and prevent erosion of savings through unnecessary fees. The introduction of value for money framework is essential to ensure that savers are getting the best possible deal, not just in terms of charges but in terms of investment performance. We also welcome the development of guided retirement products. We cannot simply leave savers on their own to navigate complex choices at retirement.

Changes to provide greater support to those facing terminal illness will help those in challenging circumstances. These are all positive steps. We will work constructively with the government constructively with the government There is so much to welcome but also areas where we believe the bill falls short I something truly fit for the future. Fundamentally, it is not address the issue of the adequacy of pensions with the truth that millions of people in the country are not saving enough for retirement and many are not saving enough to deliver a decent standard of living and statistics show more than 50% of savers will fail to meet the targets set in 2005.

Closing the gap between what people are saving and what they will need must be a pressing concern of the government and we urgently need a second part of the review to be fast-track and to focus on adequacy and we need a bold and ambitious plan to ensure every worker can look forward to retirement free from poverty and insecurity.

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He is not wrong and the Public

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He is not wrong and the Public Accounts Committee was looking at pension schemes and finding younger people were not enrolled because of the cost of living and the government must take responsibility government must take responsibility for that. There is no easy answer but I'd be interested to know if the Conservative party has policies in place to resolve this issue. place to resolve this issue.

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place to resolve this issue. An important question and I have no doubt I will come to it in due course and watch this space for what will be a fascinating manifesto in will be a fascinating manifesto in the run-up to the general election. We need a bold and ambitious plan to make sure everyone can participate.

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make sure everyone can participate. Further to the point, in every

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Further to the point, in every election, we will cherish the triple lock and seek to gain electoral lock and seek to gain electoral advantage from it but do we not need advantage from it but do we not need to come to a settled and collective view about the combination of the triple lock and the inadequacy of triple lock and the inadequacy of automatic enrolment. At 8%, it is not enough and it has to get to Australian levels and one speaks to the other and unless we understand that elements and the third pillar, you are not honest about the trade- off of dealing with the tax relief.



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A good and very important point

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A good and very important point and he is trying to bring together related and district issues which we must think carefully about. I would must think carefully about. I would not want to ask for proof at the not want to ask for proof at the dispatch box. Many people with urge dispatch box. Many people with urge me to do so. These are important points and I think he would understand that I would not want to understand that I would not want to rush into anything about care but we rush into anything about care but we may well get together.

We need a bold and ambitious plan to ensure every worker in the country can look forward to being free from insecurity and that means looking insecurity and that means looking again at the contribution rates and at employers and supporting those currently excluded from the system. currently excluded from the system. Another omission is the failure to extend benefits and automatic extend benefits and automatic enrolment to the self-employed enrolment to the self-employed because there are nearly 4 billion people, people who are driving the economy and creating jobs and taking risks and many face the prospect of risks and many face the prospect of old age in poverty with little or no provision.

Research found that 20% of workers saving in the private pension, with the self-employed sector continuing to grow, the bill misses the opportunity to come up with innovative solutions and we are also concerned with the lack of

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detail in the build with too much left to the discretion of regulators under the secondary legislation. The other group missing in

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The other group missing in relation to this are those under 22 relation to this are those under 22 years old and it seems to be set up the view that people would go to university before entering the jobs market but is not the case for many and its possible starting earlier and its possible starting earlier would be more adequate for the future because the earlier you save,

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the bigger it grows. A fairly important point and the earlier you start putting in the money with compound interest over money with compound interest over many years, you end up with a bigger engine part even if the contribution is small at the beginning and it will aggregate over a long period of will aggregate over a long period of time and I think that we will discuss this and look at it in the committee stage of the bill. Too committee stage of the bill.

Too much is left to the discretion of much is left to the discretion of the regulator and Parliament deserves to have oversight of these reforms. From my discussions with reforms. From my discussions with the industry, there is tentative support for many reforms that it contains but the message that comes contains but the message that comes back is that the devil will be in the detail and I hope the bill, as it makes progress through the House, the Minister will fill in more blanks and I am sure he will.

I will move to the most important aspect of the bill, growth. We want to support the party opposite in the growth agenda but often we think they are going in the wrong way and if you take these services and the defined benefit pension schemes as an example, as interest rates have risen post Covid many schemes have been put into surplus and we support the greater flexibility in the extraction of the circumstances in principle, that is to be more robust safeguards and this message is coming back from the industry and under current legislation, there is nothing to stop the services from being used for things such as share buying back dividend payments.

Neither out come necessarily helps the growth agenda and we would welcome amending the bill to prevent undue pressure for non-dual purposes and, in addition, to prove stability, to provide stability, the government should carefully consider looking at this rather than buying levels to future proof the fund. The government is keen to extract services from the private sector but the bill does not contain the same gusto with local government pensions. This House has discussed in detail the fiscal rules of the Chancellor earlier today and under the revised rules, the measure of public debt is shifted to net financial liabilities and consequently there is a record £45 billion surplus now counted as an asset which offsets government debt, giving the chance for hitting fiscal targets and it is shrinking every week.

Not to sound cynical but perhaps that is the reason it is when it comes to better using the circumstances and the surpluses could have been used to deliver mentalities for councils to pension scheme. The government could make it easy to follow the example set by Kensington and Chelsea where employer contribution pensions were suspended for one year to support victims of the Groenefeld tower tragedy. This would help of local opportunities such as this incubators or improving the high street or even taking money out of the pockets of taxpayers.

In my speech, I will end by saying we have fundamental disagreement on the Mandy shin. The reserve of power in the bill to mandate the pension funds to investigate not only goes against the fiduciary duties of trustees, and I appreciate the point made earlier, but it means potentially worse outcomes for savers. I recognise his point. Pensions are not just numbers on a spreadsheet but represent a lifetime of, sacrifice, and hopefully secure future and people are under a legal duty to prioritise the financial well-being of savers and the job is not to make rulings that invest prudently and uphold the trust placed in them by millions of ordinary people.

The fiduciary duty is not just that but also the bedrock of confidence the system rests on and this is about finding the sickest and best investments, regardless of where they may be in the world and if things go wrong, we can hold them to account but if the reserve power becomes law you must ask the question, if investments go wrong, who carries the can of responsibility? Pension fund manager, schemes, the government? Likewise, this power focuses on defined contribution market but the shift of emphasis impact the set.

The UK pension funds along with insurance companies hold approximately 30% of the government debt market. Therefore, they benefit scheme moves to equities, it has the potential of a profound impact on debt management or the ability to manage debt and therefore interest rates and mortgages. For that reason, we welcome the Minister confirming if there had been any concerns raised by the Debt Judgement Office. And the widespread opportunities from across industry I've been part of this. I am getting there. There are better ways the government could look at changing obsolete rules to remove restrictions and I am sure we can move on from this.

Elsewhere, Madam Deputy Speaker, there is a new market and currently we are preventing insurers from owning equity in assets and windfarms deliver stable returns and meets the green agenda. It could be an ideal match for long-term investment and also deliver clean energy. Releasing their lender of the ability to do this has the potential to unlock as much as 700 billion do this has the potential to unlock as much as 700,000,000,000 x 20 35 according to the research. Rather than imposing the top-down levels we want the government to turn over every part of this to maximise growth and opportunities with the industry by sitting at unintended consequences of all the regulations and not imposing new ones.

Let me conclude. You will be delighted to hear. Thank you. I've taken a lot of interventions. Quite right. I rear from the commitment to working with the government and the stability in the markets is of paramount importance and we recognise the need for a collaborative approach as the build progresses through the House. We will bring forward amendments will make believe improvements can be made and we will engage with ministers in good faith to get the detail right. We want to go with another against the grain of what the government is seeking to achieve with the bill and I look forward to working with the Minister in the

**** Possible New Speaker ****

weeks and months to come. I will call the chair of the select committee.

**** Possible New Speaker ****

select committee. I want to make three points.
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