Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Baroness Janke Excerpts

Tuesday 19th May 2020 Lords Chamber

[Baroness Janke (LD)]

My Lords, I thank the Minister for her introduction and welcome the continuation of seafarers and offshore workers in the automatic enrolment scheme.

As other noble Lords have said, the success of automatic enrolment to date has been very clear, with more than 10 million people brought into workplace savings since its implementation in 2012. However, for the continued success of automatic enrolment, the Government must further extend and embed the scheme, as the 2018 review report recommends. For example, the reduction of the lower age limit to 18 and the removal of the lower earnings limit would mean that people could save a further £2.6 billion annually, which shows the importance of savings in early career and their impact on the size of retirement savings.

Scrapping the lower earnings limit would also mean that pension contributions are calculated from the first pound earned, and would bring some 10 million lower earners into pension saving. Many of the workers whom we clap every Thursday would benefit from this. Some 240,000 more people would be brought into pension saving, most of them women, if the earnings threshold were aligned with the national insurance primary threshold. This would reduce the gender pensions gap, which currently means that the average pension pot for a woman aged 65 is one-fifth of a 65 year-old man’s, and women receive £29,000 less state pension than men over 20 years. That deficit is set to continue, all else being equal, closing by only 3% by 2060. We know that large numbers of our women key workers will suffer from pension poverty unless something is done about this.

Will the Government commit to a timetable for implementation of policy to provide certainty to savers, employers and the pension sector? In addition, are the Government considering introducing auto-enrolment for the self-employed, many of whom have no pension savings and whose savings will have been particularly affected by the Covid-19 crisis? Since 2001, the proportion of self-employed in the workforce has increased. At the same time, the number of self-employed people who actively contribute to a pension has decreased steadily since the late 2000s, from 27% in 2008-09, to 15% in 2017-18. Can the Minister give some assurances about this? I fully support these orders.

Universal Credit

Baroness Janke Excerpts

Wednesday 13th May 2020 Lords Chamber

[Baroness Stedman-Scott]

I draw the noble Baroness’s attention to the fact that, in a repeated Oral Statement and at Oral Questions, the Secretary of State was absolutely clear that this benefit will not be changed. I agree with her that things are very difficult at the moment. That is why we have tried to be as flexible as we can by introducing this £7 billion package which gets to the people who are in the most difficult group, removing the minimum income floor, increasing UC, pausing deductions for historic debts, introducing statutory sick pay from day one and increasing working tax credits from over £1,000 to £3,000. I cannot give her any other answer than that, but I can make a commitment to take her question back to the department and again ask what she and others would like me to ask.

[Baroness Janke (LD)]

Is the Minister aware that 85% of those who have had benefits capped are single parents, many of whom have lost jobs through the current crisis? To ease the severe hardship these families are suffering, will the Government at least consider suspending the benefits cap pending a future review?

[Baroness Stedman-Scott]

The benefit cap is reviewed once in every Parliament. The Secretary of State will do this, although I cannot tell noble Lords when. Until that happens, I am not aware of any intention or plan by the Government to remove the cap.

Covid-19: People Living in Poverty

Baroness Janke Excerpts

Thursday 30th April 2020 Lords Chamber

[Baroness Janke (LD)]

My Lords, poor and disadvantaged have been deprived of vital services and rights in recent times. Some 1.8 million single parents have been struck hard by the consequences of the pandemic. Half are living in poverty, even though 70% of them are working. However, with their children home from school, many cannot work. Almost 3 million children are living in one-parent families, and 72% of these households are being hit by the benefit cap as they do not earn enough for exemption.

To protect single-parent families, the Government should suspend the benefit cap for a minimum of three months, protect the children by filling in the short form for child maintenance service arrangements where parents are not receiving any maintenance, and provide cash instead of vouchers for single parents with children who are entitled to free school meals. This debate has shown that the poorest stand to suffer the most in the current crisis, so the Government can and must make sure that that does not happen.

Household Income

Baroness Janke Excerpts

Tuesday 10th March 2020 Lords Chamber

[Baroness Stedman-Scott]

Suicide is a terrible thing in any circumstances. We have all been reminded recently of its impact on various groups in our society. I can tell the noble Baroness and the whole House that the administration of universal credit is reviewed on a daily basis. We have a terrific director, Neil Couling, who looks after the system, and I know for a fact that he is trying to do everything he can to simplify the process without losing the administrative needs within it.

[Baroness Janke (LD)]

My Lords, does the noble Baroness accept that automatic sanctions cause huge stress not only to unemployed people but to working families who are on benefits? What assurances can she give that work coaches will be given sufficient flexibility to take into account the often appalling and tragic circumstances that lead to this action, and will she reassure those families that they will be listened to?

[Baroness Stedman-Scott]

I can assure the noble Baroness and the House that our work coaches receive regular training and development in respect of sanctions, and that sanctions are a last resort. Recent changes have been made to the length of sanctions and they will be used only when absolutely necessary.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 4th March 2020 Grand Committee

[Lord Warner (CB)]

My Lords, Amendment 86 is in my name and those of the noble Baronesses, Lady Altmann and Lady Janke. It is a rather simple amendment for tackling a complex problem that is, as the noble Baroness, Lady Neville-Rolfe, has said, causing a great deal of damage to the NHS and to patients.

I will not go into the intricacies of the interrelationship between pensions and tax policy, or repeat the data that I laid out at Second Reading about how this is affecting doctors. The noble Baroness, Lady Neville-Rolfe, has given a reprise of some of that data. There is plenty of data showing the impact on doctors and the NHS; you do not have to look very far to find it. Noble Lords will therefore be relieved to hear that I will not go over that ground again.

The point of this amendment is to address what is happening on the ground now in our NHS. We have arrived at a situation in which doctors can neither control their pension growth nor predict their tax bills; that is where we have got to. Tax bills cannot be calculated until the end of the tax year in which the tax has been incurred; by then it is too late for doctors to adjust their earnings. In some cases, the tax bill exceeds the entire take-home pay that the doctor would earn in a given tax year. We are getting to the point where doctors have to pay to work: that is the situation we have created.

The only way that they can avoid the tax bills is to reduce their work in anticipation, which is what they are doing. I have previously set out the implications of that form of workload reduction, so I will not repeat them, but they include, in many cases, taking early retirement. The serious implications this has for patients and the running of the NHS needs no exaggeration. Suffice it to say that there has been a very large decrease in NHS medical clinical capacity, with very serious implications for patients and the functioning of the NHS. The latest BMA survey of 6,000 doctors shows that even more doctors, in this year and in the past, are planning to reduce their work commitments in the tax year, which is only a month or so ahead. This is why the situation is incredibly urgent.

This problem was so serious that NHS England acted to take the unprecedented step of agreeing to cover annual allowance payments for NHS doctors for the current tax year to try to ease the significant winter pressures on the NHS. At present, as far as I know, there is no plan to suggest that this short-term mitigation will continue into next year, let alone the longer term. It is all very well for the Government to pass last week an NHS Funding Bill, but if there is a serious shortage of doctors, it will not do patients much good.

The Government have been reviewing this problem for some time, but my information from the BMA and others is that they have not so far offered any worthwhile mitigation scheme. All that is available is the option of paying these large tax bills from future pensions by generating a loan against your pension which attracts a high rate of interest and effectively reduces your pension. This option will not reduce the outflow of doctors. Amendment 86 requires the Secretary of State to extend the NHS England scheme on a permanent basis. It also prevents doctors incurring any interest-bearing loans that will reduce their eventual pensions. It has been prepared with the help of the clerks, for which I am grateful, and discussed and agreed with the BMA and other professional bodies.

I am not saying that my amendment is the only solution to the problem—the noble Baroness, Lady Neville-Rolfe, has given some other options—but it is an attempt to apply an urgent response to stop more doctors leaving the NHS or reducing their capacity. If the Government can come up with a better solution, I will be delighted. So far, there is no sign of a solution acceptable to the profession that would stop the NHS haemorrhaging doctors.

Let us remember again that the new tax year starts in a month, and that the coronavirus epidemic threatens all of us. I listened yesterday to the Prime Minister and the Health Secretary referring to bringing back retired doctors; that seems to be an important part of their emergency plan for dealing with a potential epidemic. I wonder how aware they and their No. 10 special advisers are of this own-goal lurking in the bureaucracy. We can ill afford to lose doctors from our NHS through a self-inflicted government muddle when a solution is to hand.

[Baroness Janke (LD)]

My Lords, I too have signed both amendments which, as has been said, relate to the current situation of the punitive pension taxation on doctors in the NHS. The annual allowance means that retired doctors working additional hours may incur large tax bills even if they have had only a modest rise in pensionable pay; and the taper results in a further problem, as there is an effective tax cliff edge where people can incur additional tax bills of up to £13,500 if they cross the threshold by as little as a pound.

This huge disincentive to retired doctors who are working to fill staff shortfalls in the NHS has exacerbated the existing pressure. As the noble Lord, Lord Warner, said, the impact was such that NHS England took the step of agreeing to cover the annual allowance payment for NHS doctors for this tax year as a temporary mechanism. As he also said, it seems that so far there are no plans for this to be a long-term solution.

--- Later in debate ---

[Earl Howe]

My Lords, my answer to my noble friend and the noble Lord, Lord Warner, has to be exactly the same as that which I have already given. I can do no other than urge all noble Lords to wait for the Budget announcement. I cannot comment on what ideas the Chancellor has in front of him on this issue. Those ideas may or may not include those that have been articulated by my noble friend and the noble Lord—I do not know. I suggest that we get past next week and then take stock. No doubt noble Lords will consider how best to approach this on Report, if they feel that to be necessary.

[Baroness Janke]

The Minister said that these two reviews will be reported in the Budget. Is he talking about the intention to conduct a review or saying that the outcomes of reviews that have already been conducted will be announced in the Budget?

[Earl Howe]

The reviews are under way. They have not yet been concluded, but the conclusions will be announced on Budget Day.

--- Later in debate ---

Moved by

[Baroness Janke]

87: After Clause 128, insert the following new Clause—
“Automatic enrolment age
In section 3(1)(a) of the Pensions Act 2008, for “22” substitute “18”.”

[Baroness Janke]

My Lords, I have three amendments in this group. Amendments 87 and 88 relate to auto-enrolment to reduce the lower age limit to 18 and introduce a review of auto-enrolment which could also examine the possibility of removing the lower earnings limit.

As many noble Lords have said, the success of auto-enrolment is clear, with 87% of eligible employees participating in a workplace pension in 2018. However, by reducing the lower age limit to 18 and removing the lower earnings limit, a further £2.5 billion could be added to savings.

There would also be advantages for younger people in starting to save for pensions earlier in their working lives. It is estimated that the average 18 year-old will end up with a pension pot at retirement around £18,000 lower if they have to wait until 22 to be automatically enrolled. Given that we want people to start saving for a pension as soon as possible, an age limit of 22 seems increasingly hard to defend. Even employers would generally have a simpler system were they to enrol everyone, rather than having different rules for those above and below different age thresholds.

Moreover, further extending the coverage of auto-enrolment by reducing the earning threshold to the national insurance primary threshold would bring 480,000 people, mostly women, into pension-saving. It would also help to improve the gender pensions gap, which is the subject of Amendment 96 in the same group and a growing matter of concern. A woman aged 65 has one-fifth of a 65 year-old man’s pension.

Private pension schemes seem to be the main reason for the gender gap, placing women at a disadvantage, mainly due to domestic roles and lower pay. Among 65 to 74 year-olds, median private pension wealth is £164,700 for men and £17,300 for women, who have just over 10% of the private pension wealth of men. Among the population as a whole, women’s median pension wealth is £4,300, less than a quarter of the £19,800 held by men.

Although auto-enrolled private pensions include all employers, they exclude low-paid employees. Like other private pensions, they make no allowance for periods of caring, hence they perpetuate further the pensions gender gap. New modelling has shown that a family carer top-up in an auto-enrolled pension would substantially boost women’s private pension wealth. Also, the suggestion of a voluntary earnings-related state pension addition—a fully portable auto-enrolled option that allows carer credits—would be simpler and would better meet women’s need for extra pension savings. Amendment 96 provides the opportunity for an early review of issues affecting the pensions gender gap in CMP schemes.

I support the amendments in the group in the name of the noble Baroness, Lady Drake, which address similar and related issues. I beg to move.

[Lord McKenzie of Luton]

My Lords, Amendment 95 in this group is in my name. It seeks to press the Minister to make three important changes to the current auto-enrolment scheme—there are some overlapping issues in this. The changes are: to remove the threshold requirement for earnings over £10,000 to be auto-enrolled; to remove the qualifying earnings deduction; and to extend the threshold down to the age of 18 for workers. As NOW: Pensions points out, these would be positive steps in helping to narrow the pensions gender gap and would be a significant step in boosting participation in pension saving. This should be uncontroversial, as it goes with the flavour of the deliberations of the 2017 automatic enrolment review.

However, on timing, the Government’s ambition is to phase in the abolition of the LEL, with broader changes to the framework, until the mid-2020s. We suggest that this is a weak ambition and urge the Government to reconsider. We recognise that the changes cannot all happen overnight, but the longer we wait, the more difficulty there will be in getting younger people into the savings habit. Abolition of the LEL and making contributions payable from the first £1 of earnings will help to build financial resilience. If implemented, these measures would eventually—I stress “eventually”—bring an additional 910,000 workers into auto-enrolment with, as we have heard, an additional £3.8 billion of pension savings. It would be a good first step in addressing the pensions gender gap.

--- Later in debate ---

[Earl Howe]

I understand from officials in the Ministry of Justice that there has been a relatively small number of cases where the pension scheme member has taken advantage of the pension freedoms to act in a way that frustrates the intention of an attachment order. However, I would like to establish what evidence there is of the scale of the wider problem, as outlined by my noble friend Lady Altmann and the noble Baroness, Lady Drake, in our debate on Monday, before deciding on the appropriate government response. I can tell the noble Baroness that my officials will work with others across government to gather the available evidence.

[Baroness Janke]

I thank the Minister for his assurances and for the information he gave. I am sure that the Government want to pursue the evidence-based approach, but the actual situation is very hard for many women at this moment. I welcome his offer to work with the Government on this. As the noble Baroness, Lady Drake, said, many groups will be interested in doing so; I hope that we can engage them in positive working on this issue.

A much larger proportion of those now in pensioner poverty are women because their caring responsibilities were never represented in the past. I feel that there has to be a recognition of the current situation while agreeing that we must move forward and take people with us on this.

On the amendments in the name of the noble Baroness, Lady Altmann, it is not only a question of spousal consent to an attachment order. It is often not possible to make a pension settlement because it takes place before the process reaches that stage. Spousal consent is essential because, as others have said, once the money has gone, it is extremely difficult to recover it. The ABI has written a briefing on divorce and pensions; I recommend it to the Government. Pensions in divorce is another issue that is extremely important to women.

Again, I thank the Minister for his response. I beg leave to withdraw the amendment.

Amendment 87 withdrawn.

Guaranteed Minimum Pensions Increase Order 2020

Baroness Janke Excerpts

Tuesday 3rd March 2020 Grand Committee

[Baroness Janke (LD)]

My Lords, I congratulate the noble Baroness, Lady Lister, on her speech and I very much support what she said. I shall just raise a few issues that I hope the Minister will agree to consider.

After four years of the freeze in working benefits and £36 billion in cuts over that period, we of course welcome the end of the benefits freeze. However, as the noble Baroness said, the current increase does absolutely nothing to address the shortfall that has built up over the four years, especially since prices are rising for essentials such as food and children’s clothes. The benefit freeze has hit families very hard, particularly children. There are 4.1 million children in poverty—and they are in deeper poverty, further below the poverty line. The average family in poverty is now £73 per week below the poverty line, compared with £56 per week in 2012-13. Unless the Government act to restore the real value of financial support for families, things will continue to get worse. Without policy change, child poverty is projected to rise to 4.8 million, or 37% of all children, by 2023.

I hope the Government will consider what they can do to restore the situation. I know the Minister has a great interest in the welfare of children and I feel sure she will do everything she can. I hope the Government will consider ending the two-child limit on tax credits and universal credit. Continuing with these will push a further 300,000 into poverty. Will they consider lifting the benefit cap to move 100,000 children out of “deep poverty”—those living on 50% of median income before housing costs? Another suggestion is that adding £5 to child benefit would start to restore key benefits to all children.

We welcome the pensions uprating, which is particularly important to women as they live longer than men and often live alone. The pensions situation in the UK shows very significant differences between men and women, and I hope that the Minister will consider what can be done. I know we will be coming back to this issue when we discuss the Pensions Bill tomorrow, but the position as far as women are concerned needs to be looked at.

I very much welcome the fact that state pensions have become more inclusive and redistributive for those who take family caring breaks. However, for those who retired before April 2016, because the full amount of the basic pension remains nearly £40 a week below the threshold for means-tested single-rate pension credit, this improvement has had a limited effect on gender equality. As far as private pensions are concerned, among 65 to 74 year-olds the median private pension wealth is £164,700 for men and £17,300 for women. Among women aged 55 to 59, total personal income is two-thirds the income of men in the same age bracket.

Self-employment, zero-hours contracts and other precarious forms of employment have been increasing and these inequalities restrict the ability to pay either national insurance or private pension contributions. Even when incomes are similar, women’s pension saving is less than men’s, with too many women relying on their partner’s pensions. Many women are excluded from auto-enrolment because they are in low-paid jobs. Extending the coverage of auto-enrolment by reducing the earnings threshold to the national insurance primary threshold would bring 480,000 people, mostly women, into pension saving and would help to improve the gender pensions gap.

I hope that the Minister will consider what has been said. We take the opportunity to raise this issue while we can, despite the fact that nothing can be done about it today. Perhaps reforms to pensions such as revisiting care credits, a reduction in the number of qualifying national insurance years for the state pension and reducing or, indeed, removing the earnings limit so that low-paid workers, particularly women, would be eligible for private pension schemes are issues she might consider in due course.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for introducing these orders and thank all noble Lords who have spoken. First, I will speak briefly about the Guaranteed Minimum Pensions Increase Order before moving on to the Social Security Benefits Up-rating Order.

As we heard, the Guaranteed Minimum Pensions Increase Order 2020 provides for defined benefit occupational schemes that were contracted out to increase by 1.7% members’ guaranteed minimum pensions that accrued between 1988 and 1997, in line with CPI. This is a basically a routine uprating, but I want to take the opportunity to raise a specific issue. When the GMP order 2019 was debated on 14 February of that year, my noble friend Lady Drake invited the then Minister to give an update on the Government’s proposed guidance to occupational pension schemes in the light of the Lloyds Banking Group case. As the Minister will know, that case had the effect of requiring trustees to amend their pension schemes to equalise GMP benefits. In that debate, the Minister, the noble Baroness, Lady Buscombe, said:

“My department has put forward a method that schemes can use to equalise pensions which, because of its ‘once and done’ nature, should limit costs resulting from additional administration requirements. The department will provide guidance in the near future for schemes wishing to use the method upon which the department consulted in November 2016.”—[Official Report, 14/2/19; col. 1961.]

Universal Credit

Baroness Janke Excerpts

Monday 2nd March 2020 Lords Chamber

[Baroness Stedman-Scott]

Like all noble Lords in the House, I am only too well aware of the size of the problem of homelessness and people sleeping on the streets. I normally agree with the noble Lord, and I do agree that universal credit may have added to some people’s anxiety and their issues. Many of them have had issues for a long time that we have not done what we should have done to deal with—but I do not think they are 100% attributable to universal credit.

[Baroness Janke (LD)]

My Lords, is the Minister aware that a large body of evidence supports the case that benefits sanctions have a devastating effect on claimants’ mental health and could even result in suicides? In the light of last week’s report in the Lancet, when will the Government conduct a comprehensive assessment of the impact of benefits sanctions on claimants, as the DWP pledged to do in 2013?

[Baroness Stedman-Scott]

I have read the report in the Lancet, and the Government’s response is that we have no concerns surrounding the general thrust of the methodology. However, it is difficult, in that it says it would not have caused the issue but would have contributed to it—a point I tried to make in answering the prior question. I am not aware of the commitment the Government made then, but that will be down to me, not them. However, if the noble Baroness agrees, I will go back to the department, get an answer to that question and write to her.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Wednesday 26th February 2020 Grand Committee

[Lord Flight]

My Lords, I want to point out that Amendment 28 is important because members of pension schemes do not generally have much knowledge or understanding of how their assets are invested and managed. This clause places a reporting duty on the Pensions Regulator to publish statements of investment principles under Section 35 of the Pensions Act. The amendment would also place a requirement on the Pensions Regulator to create an SIPP repository, accessible to the public through its website, so that all scheme members could check their scheme’s investment strategy.

It will be interesting to see how investment strategies are described. I think that it will be necessary for them to be described in a way that is readily understandable by all citizens.

[Baroness Janke (LD)]

My Lords, my Amendment 89 relates to the occupational pension schemes regulations in the statement of investment principles. Again, it is about compliance with the Paris Agreement, particularly to hold the global average temperature increase to well below 2 degrees centigrade. Other amendments in the group seek compliance in this area.

It is clearly very important to protect the interests of savers and the economy. I am grateful to the Minister for her amendments on climate change risk, her speedy response and her awareness of issues arising in this area. I have also supported Amendments 75 and 92. I certainly support Amendment 28 from the noble Baroness, Lady Altmann, on the register and publication of the SIPPs from all pension schemes, and understand the administrative problems of smaller ones.

As we have heard from others, the size of the pension fund is hugely influential, particularly in transforming the economy into a green economy. I believe that pension schemes have had enormous effects in other areas. My own recollection is of South Africa, where schemes exerted very strong influence. In my city of Bristol, when creating a smoke-free city, we sought to get the pension schemes and their investors to support it. This can be a very powerful instrument in changing behaviour and thinking; I hope that it will be.

The noble Baroness, Lady Hayman, mentioned that her amendments extend to all pension schemes. Again, I am not clear what the differences are. I note that the briefing from the ABI suggests that the PRA and the FCA are better placed to deal with the smaller pension schemes, but I would like to hear the views of the Minister on this. I very much support the spirit and content of most of the amendments in this group.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I shall speak to Amendments 52, 74, 75, 76 and 92 to which I have added my name. As the noble Baronesses have said, these amendments refer to the need to strengthen the obligations on pension funds to play their part in meeting the challenge of the climate emergency. We accept that the issue goes wider than this Bill, but we will succeed only if every part of government, including the DWP, industry and the economy play their part, so this pensions Bill does have a part to play.

In relation to pensions, it is vital that a consistent approach is taken across the pension scheme market with the DWP, the Pensions Regulator and the Financial Conduct Authority all requiring contract-based pension schemes and trust-based occupational schemes to demonstrate the same levels of compliance with our climate change objectives; otherwise, there could be adverse competition between the different funds, which we do not support.

I add my thanks to the Minister for acknowledging the importance of these issues when we raised them at Second Reading, arranging to meet us to discuss them further and tabling the Government’s amendment today. As the noble Baroness, Lady Hayman, said, it happened very quickly, and we were very impressed by that. It is fair to say that it is a start, but we do not think that it goes far enough. However, I am sure that we will have a good dialogue on this issue. In the meantime, we have tabled amendments.

I shall be brief as I do not want to echo what other noble Lords have said. Amendments 74 and 76 take out the specific reference to occupational pension schemes so that the requirement would apply to all pension schemes. This is important because, although occupational defined benefit and defined contribution schemes comprise a large part of the pensions market, there is a gradual shift taking place towards contract-based personal schemes. As one model is regulated by the Pensions Regulator and the other by the Financial Conduct Authority, it is vital that we take this opportunity to provide alignment and consistency on the climate change action that they require across that sector.

In the Minister’s helpful letter to Peers explaining the purpose of the government amendments, it did not seem to me that she addressed this lack of consistency. Perhaps she can do that now. Does she accept the need for a joint approach across the regulators to ensure that investment decisions have parity, so that one cannot take advantage of the other or lead to the detriment of members by requiring higher standards of one than another?

Secondly, our Amendment 75 explicitly spells out that the Government’s reference to climate change means the need to align with the objectives of the Paris agreement to hold temperature rises well below 2 degrees centigrade. It is important to have that wording in there because we bandy around the expression “climate change” but it means different things to different people, and we are concerned that it could otherwise be loosely interpreted. That is why we set out a more explicit requirement. We set out the reasons for that requirement at Second Reading. As other noble Lords have said, we are currently on track for 2 to 4 degrees centigrade of global warming by the end of the 21st century, and we know that that will have a profoundly negative impact on the global economy and therefore upon the investments and the financial returns of pension schemes. So it is important that we have a requirement to deliver our Paris agreement commitments. It is not just about us being fluffy and caring about the planet; it is a more hard-nosed issue about the direct interests of savers and our economy. That is why pension funds have such critical role to play. I hope that the Minister will accept the intent and the importance of that amendment.

Thirdly, I was pleased to add my name to Amendment 92, which provides a timescale for the consultation on implementing the recommendations of the Task Force on Climate-related Financial Disclosures. It requires that the consultation will commence within one month and be completed within one year. Obviously we welcome the Government’s intention to consult widely on this issue, and we understand some of the complexities that lie behind all that, but meanwhile the clock is ticking on our Paris commitments and we are failing to step up to the mark on that, so this is one of the many areas where we need to take urgent action but also where we could deliver the biggest impact. I hope that the Minister understands and accepts the need for that consultation and follow-up to take place within a specific timeframe.

Finally, our Amendment 52 returns to the issue that we raised at Second Reading about the need to inform pension savers via the dashboard of the actions being taken by their trustees to deliver on climate change as set out in the UK Stewardship Code 2020 and to align with the Paris agreement. This amendment would add these factors as information that may be required to be provided by regulation. I know that at Second Reading there was some argument—maybe there will be again today—about the information on the dashboard needing to be kept simple in the first instance. We understand that issue, but we also have to acknowledge, as the noble Baroness, Lady Hayman said, that pension savers are concerned about their pension funds propping up fossil fuel extraction, and they are keen to have information so that they can be empowered to take action on these issues. Our amendment has been tabled to explore how best we can achieve that by providing information in a simple and meaningful way to pension savers.

I hope that the Minister will agree that savers need to have access to this information and that the dashboard could be a meaningful way of achieving that objective. I look forward to her response.

Pension Schemes Bill [HL]

Baroness Janke Excerpts

Committee stage & Committee: 1st sitting & Committee: 1st sitting : House of Lords
Monday 24th February 2020 Grand Committee

[Baroness Bowles of Berkhamsted (LD)]

My Lords, like others, I speak in favour of all three amendments. In fact, I signed Amendments 6 and 7 but too late for it to show on the Marshalled List in respect of Amendment 7. I was one of the many noble Lords who mentioned intergenerational fairness, and fairness more generally, at Second Reading because, as has been explained, a significant number of members, particularly older members but not necessarily just them, transfer out after some good times for investments in the investment cycle. That leaves others bearing the brunt of later down cycles, hence the Ponzi analogy. I am actually not quite sure what “fairness among all members” actually means—it is difficult because of, for example, the different longevities between men and women—but I signed Amendment 6 because that was the closest thing to saying, “You’ve got to look widely at everything.”

I have come to the conclusion that the only way in which you can have fairness is to have some kind of buffer, which we will come to later on, or some kind of risk margin as proposed by the noble Baroness, Lady Altmann, or maybe both. In the interests of fairness, those who are transferring out should have to take their share of the risk; otherwise, if you are a good market-watcher you could perhaps spot your moment to make your move, and then that is perhaps unfair on the rest.

I, along with others, think that something must be enabled for these measures to be required. It is nice to know that something is already envisaged for the scheme, but there needs to be something for every scheme. There should at least be a requirement for that, and actually I think there should be a permission for things such as buffers and risk margins, rather than a prohibition.

[Baroness Janke (LD)]

My Lords, I too signed Amendment 2, which my noble friend Lord Sharkey so ably introduced. I will be brief because I think all the arguments have been very well covered. The only thing that I would add is that the importance of transparency in a scheme such as this seems fundamental. I know we are talking about communications and ensuring that members are fully aware of what they are signing up to, both the benefits and the disbenefits later on, but, as part of the arguments that have been put forward in favour of this group of amendments, there is the whole issue of explanation and ensuring that members are fully aware of their position under this type of scheme. I particularly support the idea that in order for a scheme to be registered, the explicit prerequisite is to show what the strategy is to address the whole issue of intergenerational fairness. I know we will be talking about capital buffers later on, but the amendments address the interests of transparency and fairness and the welfare of all members of the scheme, and I support them.

[Lord Flight (Con)]

My Lords, it will be very important to address these issues because I suspect that CDCs will become very popular among the younger generation as they have considerable attractions. I add only that the principle of building up of reserve seems to be one way of evening out fairness.

--- Later in debate ---

I strongly urge the Minister to take heed of the advice of the DPRRC and to let the House have a schedule of the appropriate arguments for each proposed first-use affirmative. There are many of these cases. Rather than letting us have a schedule of the arguments, perhaps it would be better and simpler for the Minister to agree to replace all first-use affirmative procedures with straightforward affirmative procedures. I beg to move.

[Baroness Janke]

My Lords, I support the amendment. My noble friend Lord Sharkey raised this matter at Second Reading and in subsequent briefings. I alluded to transparency earlier; there is also the issue of accountability. We have heard about the recommendations of the DPRRC. I note that the Constitution Committee agrees with the DPRRC that the use of Henry VIII powers is inappropriate in this Bill, regrets the inclusion of skeletal provision and notes that

“complexity is not an excuse for taking powers in lieu of policy development”.

It is an august committee, so we should treat its recommendations seriously. I support the amendments and would like to the hear the Minister’s response to the recommendations of the DPRRC.

[Viscount Eccles (Con)]

My Lords, perhaps I might make a general comment. I support the way in which the noble Lord, Lord Sharkey, introduced his amendment. This is a problem with framework Bills. Why do we have framework Bills? It is because we do not know the answers to the problems posed, in this case by a particular kind of pension scheme. The results, if the Bill goes ahead as it is, will be quite worrying. I would not wish to be a trustee of this pension scheme. Why not? Because I would not have any powers. At any time, my efforts to play a proper role as a trustee of this pension scheme could be upscuttled by the Government changing their mind and introducing another piece of secondary legislation. All the fundamentals of this pension scheme—particularly in Clause 18, which the noble Lord referred to—are entirely in the hands of the Government of the day.

We have talked about all sorts of things that I am also thinking about from the point of view of the trustee. As a trustee, it would be my responsibility to try to ensure I had some sort of capital buffer, if I needed it. I would have to talk to the employer in a way that would give me some chance of success. With the Bill as it is now, the position of trustees is impossible or near to it.

Bereavement Services

Baroness Janke Excerpts

Thursday 13th February 2020 Lords Chamber

[Baroness Janke (LD)]

My Lords, the noble Baroness mentioned the charity Cruse Bereavement Care. Is she aware that in October 2019, Cruse commissioned research from YouGov about people’s experiences on being bereaved? Some 44% described their experiences as time-consuming, 39% stressful, 30% upsetting, 24% complicated and 16% traumatic. In the light of this and the experience of my noble friend Lady Ludford, will the Minister commit to taking a lead on addressing the needs of bereaved people? Will she provide some form of practical support for Cruse, a charity with very limited resources, in its campaign to treat bereaved customers first?

[Baroness Stedman-Scott]

I thank the noble Baroness for reminding us of those statistics, which should give us cause for concern. I have already pledged to go with the noble Baroness, Lady Ludford, to talk to Cruse; we will take up the points that the noble Baroness raised.