Pensions Dashboards (Amendment) Regulations 2023

Baroness Sherlock Excerpts

Wednesday 12th July 2023 Grand Committee

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Minister for bringing this statutory instrument to the Grand Committee. I have read the November debate and I look forward to a further detailed disposition from the noble Baroness, Lady Sherlock, with her usual forensic care. I will therefore not go into great detail; I am glad she will be winding up.

Can the Minister give me some reassurance? Compared to many others, I am coming new to this brief. Having looked through the regulations I see that there are no longer any binding interim dates, just one big deadline in 2026. Does the Minister not see how hard it will be to get busy pension schemes—commercial pension schemes—to prioritise this over their other day-to-day work? Other noble Lords have made the point about data being ready for dashboards. How much time will these pension schemes give to this, given that there are no interim dates and just one big date in 2026?

It seems to me that the issue is deadlines, and there is a need for the Government and pension schemes to nudge people to make sure that all details are up to date on the various pots so that they can pull that through to the dashboard when it is launched.

In a debate on 8 June, the Government elaborated on the need for dashboards to change the way people plan for retirement, and the Minister said that more time was needed to deliver this complex build. Paragraph 7.4 of the Explanatory Memorandum includes explanations. I have never seen so many explanations for why something has not happened:

“The technical solution has not been sufficiently tested, more work is needed to set up adequate support for industry with their connection journey and there is still work to do to finalise the necessary supporting guidance and standards”,


and so on. It is the biggest list of excuses for delay that I have come across for some time.

Other noble Lords have mentioned guidance in passing. Does the Minister believe that guidance will be sufficient to concentrate minds on the issue? I am not sure that guidance will be sufficient in many cases.

There are some small points, but I am not sure how they are addressed. I may have missed that somewhere, so I hope the Minister can provide me with an answer. For instance, how are widows’ and widowers’ rights to the pensions of their husband, wife or partner being dealt with? I had a similar case: I have a modest council pension pot and I asked what happens when I die; does my wife receive a contribution? That was six months ago and I still have not had a reply, and it is being dealt with by one of the very large pension funds. I would like some reassurance that these dashboards are not going to make the situation even worse.

In theory, pensions mainly apply to older people, although people seem to take them much earlier nowadays. It worries me that the whole idea of the dashboard is based on a knowledge and working use of IT. It may surprise noble Lords to learn that a lot of people do not use IT; many people just use their mobile phones to make calls. The whole principle of the dashboard and the way in which people access information is based on being able to operate an IT system. I have doubts because, even if the people concerned are not old now, as they get older and less able, when they will really want to know, they will be fiddling around not knowing how to get into the dashboard. Will we end up with big companies such as Aviva taking over pension schemes? I have no problems with Aviva. It seems to have taken over an awful lot, although it does quite well, but I am worried that many of the smaller pension funds will opt out.

Page 2 of the valuable impact assessment that was produced gives three options: do nothing, an alternative to legislation, and—the preferred option—the Government legislating. After reading all this, I wondered whether the first option, to do nothing, might have been safer, but we have to move forward.

We need to be careful, but we must say when this will happen, and the guidance has to be accepted by the pension funds so that they know when to do something, rather than waiting until October 2026 and saying, “Gosh, we have to do this by tomorrow”. My first point was that we need some interim dates to focus minds on this issue otherwise, as we were here a year ago and were here before then, we will be here again with another list of excuses, as detailed on this document.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his introduction to these regulations and all noble Lords who have spoken. It is very nice to welcome the noble Lord, Lord Palmer, to the pensions dashboard crew; we look forward to having discussions with him on the later iterations of this project, which one sincerely hopes will not come to pass.

We have been very supportive of the pensions dashboard. Therefore, we agree with the noble Lord, Lord Vaux, that it is deeply regrettable that we are in this place and that the Pensions Dashboard Programme needed to be reset. I accept that my noble friend Lady Drake is right: if the digital architecture was not going to be ready to enable pension schemes to connect before the first deadline, which is the end of next month, it is clearly better to pause and get it right. After all, the dashboard service will enable access to trillions of pounds of assets and accrued benefits belonging to working people. It has to be secure as well as fit for purpose.

My noble friend Lady Drake is often a Cassandra on these matters; she sees these problems coming. My problem is not that the Government should pause and reset, if that is necessary; it is that they need to stop pretending that everything is fine, until the moment when it is suddenly not fine. That is a bit of a habit in government: “Is everything fine?” “Yes, yes, yes. Oh, no, it has all fallen apart, but will be fine again with a new deadline”. We somehow need to find a way of discussing things in politics that allows a grown-up approach to understanding when projects will be difficult. There is an overconfidence on the part of the Government such that, when everyone raises problems, Ministers are sent out with a brief that says, “No, it will all be fine; there is nothing to see here”, until it falls over.

I do not expect the Minister to solve that problem overnight, but I commend this to the Government as an opportunity to think again about how we handle big projects—and, in particular, how Parliament can have some accountability for them. An awful lot of money is at stake here—private, commercial and public. There ought to be some decent accountability over it.

Clearly, people such as my noble friend Lady Drake—indeed, many on these Benches—cautioned the Government that they were underestimating the complexity of delivering the dashboard and being overoptimistic about the speed, but we want a dashboard to work. I am with the noble Lords who are raising challenges about the reasons. We have had some helpful briefings, and some slightly less helpful official ministerial Statements, but the truth is that it is hard to know what exactly has gone wrong and why it was not picked up earlier.

The Minister told us the reason, saying

“the technical solution has not been sufficiently tested and there is still work to do to finalise the necessary supporting documentation and to get the necessary systems in place to support industry with the connection process”.

A cynic would say that, basically, that means that it was all fine apart from the technology, the paperwork and the systems. That is not an explanation of what went wrong. It is a little like when my washing machine breaks and a helpful friend will say, “What’s wrong with it?” and I reply, “It’s not working. It’s not washing clothes—I don’t know”. We need more than that. I know that the Minister is keen to have his officials talk to us, but there needs to be some process of public openness and accountability when things go wrong, so that there is the ability to hold to account and understand. However, here we are, with this reset.

As we have heard, the original timetable was hardwired into secondary legislation, hence the need for the instrument. As the Minister explained, it amends the 2022 regulations to remove the staging profile, staging deadlines and connection window and insert instead a common requirement for all schemes to connect to dashboards by 31 October 2026. The new approach is described like this in paragraph 11.1 of the Explanatory Memorandum:

“Through this instrument, the Department for Work and Pensions is retaining the policy of compulsory connection by a set date and intends to encourage a staged approach set out in guidance, rather than mandated in Regulations”.


Therefore, the answer to the noble Lord, Lord Palmer, is that there will be interim dates in the guidance, but they will be suggested interim dates. It is not yet quite clear what that will mean in practice. Trustees and managers will need to have regard to such guidance but as I understand it—the Minister can clarify it—that would not necessarily mean that they are obliged to comply with the suggested dates, or presumably they would be not suggested dates but mandated ones.

That raises some key questions. With a single compulsory connection deadline, is there not an obvious risk of a backlog of schemes still waiting to connect as we get close to 31 October 2026? What action will the DWP take if there is evidence of back-ending by schemes or of backlogs building up? That is not just our concern. Dr Yvonne Braun, a director of the Association of British Insurers, said:

“Our members have indicated they’re willing and able to continue to comply with a voluntary timetable, although it would have been our preference that these remained a regulatory requirement to prevent a last-minute rush of firms connecting to the system. We ask that government keeps this under review and considers making the staggered dates a regulatory requirement again if it should become clear that the wider industry is not taking the same approach”.


What is the Government’s response to that?

Although the timetable in the guidance will not be mandatory, we know that scheme trustees or managers must have regard to it, as not doing so would be a breach of the 2022 regulations. They will also be expected to demonstrate how they have had regard to it. However, as my noble friend Lady Drake said, the language of the Explanatory Memorandum is much more about encouragement. Paragraph 7.6 refers to MaPS and TPR communicating with

“trustees and managers of schemes in scope to encourage connection ahead of the single connection deadline, in line with the connection dates set out in guidance”.

It is not clear to me where the line lies between compulsory and voluntary when it comes to guidance. Can the Minister clarify that?

Can the Minister explain what “have regard to” means in practice? Is there an established meaning of this in law? It is a phrase that comes up, so can he help us on that? A crucial question is what would count as not having regard to the guidance. For example, suppose a scheme manager reads the guidance carefully and develops a plan to connect just in time for October 2026, and she is confident her scheme will be ready by then, does that count as having sufficient regard? Suppose lots of others do the same thing, and they all get to that point but cannot connect because there are too many of them and the system cannot manage it, are they in breach of the law? Have they failed then to have due regard to the guidance? What is their position?

Pension Funds: Investments and Tax Relief

Baroness Sherlock Excerpts

Thursday 29th June 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the Climate Change Committee has just reported that the Government are missing climate targets on nearly every front, which makes it all the more disappointing that they opposed a recent Labour amendment to the Financial Services and Markets Bill that would have required the Treasury carefully to review the case for pension funds investing in green infrastructure while maintaining the soundness of funds. Can the Minister tell the House why?

[Viscount Younger of Leckie (Con)]

No, I cannot, but I can say that the introduction of TCFD reporting requirements for pension schemes was pioneering. We are a leader in this field. As I say, these regulations are still very new and there is a lot going on in this space, and we will be reporting by the end of the year.

Cost of Living Support

Baroness Sherlock Excerpts

Thursday 22nd June 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I read the Written Ministerial Statement on cost of living support with interest. It runs to well over 1,000 words. I regret that most of them are devoted to repeating things that have been announced and implemented in previous months and, in some cases, years. Just 157 words describe anything new, or rather the implementation of something that was announced last autumn, namely that from this week payments of an additional £150 to disabled people to help with the rising cost of living will start to be made.

While any help is welcome for those who are struggling, we must be clear-sighted about the scale and source of the problem that people are facing. This leads us to two questions. How bad is the cost of living problem? Are the Government doing the right things to help people in it? The Government know that the cost of living is a problem. In the Statement, they acknowledge that inflation and interest rates are very high but say that it is a global problem caused by Covid and the war in Ukraine—which is interesting. CPI inflation in the UK is now 8.7%. In Germany, inflation is 6.3%. In France, it is 6%. In the USA, it is 2.7%. Yet all those countries had Covid, and all are affected by the war in Ukraine. In brackets, we should note that this is the week when UK Government debt rose above 100% of GDP for the first time since 1961.

The UK now has stubbornly high inflation, which is not associated with economic growth. Its effect is that the cost of essentials is skyrocketing. Food price inflation was still at 18.4% in the year to May. That is an eye-watering pressure on family budgets, and there is no sign that it will fall sharply any time soon. This is a challenge for most families. How much harder is it for disabled households, who must spend more on almost every aspect of everyday life—food, medicines, clothing, energy and travel? We have all heard reports of disabled people cutting back on spending on food and other basics, simply so that they can afford transport or to run essential equipment. Has the Minister seen the analysis done by Scope? It estimates that, on average, disabled households—households with at least one disabled adult or child—now need an additional £1,122 a month to have the same standard of living as non-disabled households. Do the Government agree with that analysis? If not, what assessment has the Minister’s department done of the extra amount that disabled people need, and what was the basis for choosing that figure of £150 as a one-off payment?

We are now seeing the effects of this inflation crisis firmly working their way into interest rates. IFS analysis said that just the latest shifts in mortgage markets will push up mortgage payments by an average of £280 a month. That is over 8% of disposable income. It said for almost 1.5 million people, half of them under the age of 40, will find their mortgage payments jumping by at least 20% of their disposable income. How are people supposed to manage this? They are simply too squeezed already.

Disabled people and their families will be facing a housing crisis as well as a cost of living crisis in general. Labour has set out a plan to tackle mortgagers’ problems and stop people losing their homes. It includes ensuring that all borrowers can lengthen their mortgage term or switch to interest-only mortgage payments for a period. It also requires lenders to wait for at least six months before initiating repossession proceedings. Labour would also bring in additional protections for renters What plans do the Government have to help people manage this crisis?

The cost of living crisis has not gone away. Work by the Joseph Rowntree Foundation has shown that the high levels of hardship have barely moved over the last 12 months. They are in danger of being baked in and becoming a new normal. What else can the Minister tell us—and crucially, the people of this country—to put our minds at rest? I look forward to his reply.

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank the Government for the Statement and thank the noble Baroness, Lady Sherlock, for covering so much ground that I too would like to cover to some degree.

The Statement is the Government patting themselves on the back, but what is the reality? I too will concentrate to some degree on people with disabilities. Research has found that people with disabilities had an available amount to spend that was 44% lower than that of other working-age adults, exposing them hugely to the rising cost of essentials. The research said that there was a chasm between the underlying disposable incomes of people with a disability, which it fixed at £19,397 per annum, and the non-disabled population’s disposable income per annum, which it fixed at £27,792. This was according to the analysis of official figures and a YouGov survey of just under 8,000 working-age adults, more than 2,000 of whom reported a long-term illness or disability.

The announcement of the £150 cost-of-living payment for people on disability benefits, which the noble Baroness, Lady Sherlock, referred to, is, quite honestly, a slap in the face for many. The payment is conspicuously lower than those made for pensioners or people on the lowest incomes. Can the Minister explain why disabled people deserve less help than other disadvantaged groups, especially as they will feel the effects of this crisis particularly acutely?

The noble Baroness spoke about Scope’s Disability Price Tag report, which states:

“On average, disabled households … need an additional £975 a month to have the same standard of living as non-disabled households.”


The extra payment of £150 does not cover even a week of additional costs. Does the Minister recognise these figures, and what will he do to narrow the gap?

With the increase in energy prices, almost half of people with disabilities cannot afford to keep their homes warm. But do not think that non-disabled people are managing: they, too, are not. Support is listed in the Statement—we of course welcome support, whatever it is—for those on universal credit and the like: they have received £301 and will get £300 and £299, to be paid in the autumn and the spring. How do the Government see these beneficences being spent? Are there details of what people will not be able to afford out of this £301, £300 and £299?

The basic fault with the Statement is that it says that the package will support the most vulnerable during 2023-24. Sadly, “the most vulnerable” now applies, in some situations, to individuals and families in work. Has the Minister any light at the end of the tunnel for those with rate increases who were not able to repay their mortgages, and those renting who are facing massive rent increases? Do the Government have any figures on the increased use of food banks, and on the demographic of the current users of these facilities? Do they have current statistics on the number of families with less than £100 in savings? Many people in this House do not realise how many people in this country have less than £100 in savings and are thus vulnerable in the present climate.

It is hard to think of any solutions at this stage, but the noble Baroness gave some indications of Labour proposals. The Liberal Democrats call for an emergency mortgage protection fund to protect families falling into arrears or facing repossession as a result of soaring interest rates, paid for by reversing the Government’s tax cuts for banks. The top fund will be targeted at homeowners on the lowest incomes and those seeing the sharpest rise in mortgage rates. It would be a temporary scheme to tackle the current problem of soaring mortgage rates. It could be introduced for one year to begin with, and the Government would have to review the need for it the following year. There is an absolute need: people are struggling with their mortgage payments and will be thrown out of their homes, whether they own or rent them.

In its simplicity, this Statement is welcome, but it does not go anywhere near far enough.

Child Support Collection (Domestic Abuse) Bill

Baroness Sherlock Excerpts

3rd reading
Friday 16th June 2023 Lords Chamber

[Lord Farmer (Con)]

My Lords, I thank my noble friend the Minister and his officials for their support, all noble Lords who spoke at Second Reading, and my honourable friend Sally-Ann Hart for introducing the Bill in the other place and guiding it through all its stages.

Given my long-standing interest in separated families and the Child Maintenance Service, I am aware that key details of its operation are covered in primary legislation. The Bill amends primary legislation to make the collect and pay service available to victims of domestic abuse regardless of payment history, so that they can decide what is best for their personal circumstances. Evidence of domestic abuse against either parent or children by the other parent involved in the case will be required. Such evidence requirements are expected to be complex, so they will be set out in secondary legislation. My noble friend the Minister will confirm that they will be subject to more detailed policy development, including engagement with stakeholder groups and other government departments to ensure that parents are support appropriately and measures are proportionate for both parents.

It has been a privilege to bring the Bill through its final stages. I hope that it can now receive Royal Assent and be implemented as swiftly as possible. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Lord, Lord Farmer, and congratulate him on having brought the Bill to fruition in this House. I add my thanks to the Minister and his team for having supported it, to the honourable Lady, Sally-Ann Hart, who piloted it through the other place, and to the charities, such as Gingerbread, which put so much work into supporting parents in this area.

Although this is a brief and focused Bill, it achieves one incredibly important task: it enables parents who have experienced domestic abuse to use the Child Maintenance Service without having to communicate directly with the abusive parent. It is a good example of how a Private Member’s Bill can do something quite specific but incredibly important to those affected by it.

We might have considered tabling some amendments to it, to explore some of the issues, but we want to make sure that the Bill reaches the statute book in this Session. I am very conscious that it is six years since Emma Day was murdered by her ex-partner. He threatened her life if she chased him for child support, and when she pursued a claim for child support, he stabbed her to death. I hope that those who still mourn Emma to this day will see the Bill, and the work of the noble Lord, Lord Farmer, and others, as a small step forward in protecting those who face domestic abuse in our time.

The absence of a Committee stage prevented me from following up on one specific question I asked at Second Reading, which the Minister missed the opportunity to answer. In Committee in the Commons, the Minister, Mims Davies, said:

“Full consideration is being given to exempting victims of domestic abuse from collection charges”.—[Official Report, Commons, Public Bill Committee, 14/12/22; col. 9.]


Can the Minister, either now or in writing, tell the House where that consideration has got to?

For today, we are pleased to offer our support for the Bill, and we wish it fair speed.

[Viscount Younger of Leckie (Con)]

My Lords, I thank the noble Baroness, Lady Sherlock, for her support for my noble friend’s Bill. I will most certainly write a letter to her, over and above the letters I have already written to her, which I hope she has received.

I am grateful to my noble friend Lord Farmer for presenting his Bill to the House, and to my honourable friend Sally-Ann Hart for introducing the Bill and guiding it through its stages in the other place. I am also very grateful to the Minister for Social Mobility, Youth and Progression for her support.

I remain very grateful to Dr Samantha Callan for conducting the independent review of the ways in which the CMS supports victims of domestic abuse, and for her excellent report. As your Lordships are aware, Dr Callan’s report includes a recommendation to enable cases to be moved to collect and pay where there is evidence of domestic abuse—precisely what this Bill aims to do.

To ensure that the Bill targets parents appropriately, the types of domestic abuse evidence that will be required will be set out in secondary legislation. This will reassure not only the noble Baroness, Lady Sherlock, but my noble friend Lord Farmer in particular. We will engage with stakeholder groups, other government departments and the devolved Administrations, where appropriate, to ensure that appropriate processes are established for verifying evidence of domestic abuse.

I hope that the whole House will join me in supporting my noble friend’s Bill and agree to the final stages of its passage.

Food Price Rises: Impact on Low-Income Families

Baroness Sherlock Excerpts

Thursday 25th May 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, the reality is that food is now the new energy; but it is worse, because households spend more of their budgets on food and it is not cheaper in the summer. In fact, it is worse, because the kids do not get free school meals. Food price inflation of 19% is a disaster for poor families. The Minister will know—because he has read the evidence—that those on low incomes, even in work, are already buying own-brand supermarket goods; they are already skipping meals; and they are already going to food banks. There is nowhere else for them to go. Is any thinking going on in the Government as to what they will do right now to help those families this summer?

[Viscount Younger of Leckie (Con)]

Of course, the noble Baroness is right. I said at the beginning that much work is going on with regard to interaction with the supermarkets. A number of supermarkets have some urgent initiatives on the go. For example, ASDA has invested £73 million, allowing it to drop and lock prices for over 100 household products. The prices of these products were dropped by 12% on average and will remain this way until the end of the year. Morrisons has similar initiatives: it has cut prices on more than 500 products. It is more than this, and the noble Baroness will know that it is not just the UK. There are other countries, including Germany, where food price inflation remains high, at around 18% or 19%.

Child Support (Enforcement) Bill

Baroness Sherlock Excerpts

2nd reading
Friday 19th May 2023 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Redfern, for introducing the Bill and all noble Lords who have spoken. As we are in the business of confessing past connections, I should probably remind the House of a very distant time when I served as the senior independent director of the Child Maintenance and Enforcement Commission, and my time as the director of the National Council for One Parent Families, now joined with Gingerbread.

The noble Lord, Lord Palmer, mentioned that this is a Private Member’s Bill but that it would have been nice for it to have found government time. It is not the only one. You wait a long time for a child support Bill, and at least two come along within the month. We currently have two child support Private Members’ Bills going—one more and they could easily have found time for one government Bill, I should have thought. None the less, I am glad it is here and we have a chance to debate it, and I pay tribute to the noble Baroness, Lady Redfern, for bearing the responsibility so firmly.

It was a delight to hear the speeches today. It is good to hear the noble Baroness, Lady Stedman-Scott, back in this territory, released from the confines of government. When they say, “Let Bartlet be Bartlet”, I say, “Let Stedman-Scott be Stedman-Scott”, and let us have more of this passion from the Back Benches. It was also good to hear from the noble Baroness, Lady Bottomley, who I very much regard as my noble friend. I pay tribute to her: for so many years she has had a passion for standing up for children and families who are living in poverty and an understanding of how it is often women at the front line who just hold things together. When the budget is too tight, it is the women who go without food themselves, track down the cheapest things and do all it takes. I commend the noble Baroness for all her work and understanding over the years.

Child support systems operate in sensitive territory. It is in the space between parents who are no longer together and, as the noble Lord, Lord Palmer, said, are sometimes no longer talking to each other, and it is difficult. The reality is that some parents simply do not pay what they owe for their children, as the noble Baroness, Lady Stedman-Scott, illustrated clearly. I know it is difficult having a break-up, but no matter whose fault it was, you may walk away from your marriage or your relationship but you do not get to walk away from your children. You retain responsibility for your children, and they have a right to expect the support of both parents. The state also has an interest, because, as the noble Baroness, Lady Bottomley, and others explained clearly, child maintenance has an important role in reducing child poverty. I will not rehearse that, but there is a public interest for all of us in having a well-functioning child maintenance system. We on these Benches fully support any measures that will help to get non-resident parents, the paying parents, paying what they owe to support their children.

Concerns have been expressed about the performance of the Child Maintenance Service both here and when the Bill was debated in the Commons, but I think there is general agreement that enforcement needs to be stepped up and, in particular, speeded up. Given that, we welcome the provisions of the Bill, which should give extra tools and speed up the use of tools that are already there.

The noble Baroness, Lady Redfern, explained very clearly what happens if a parent fails to make payments as directed: the CMS can use deduction from earnings orders, or DEOs, to try to get the money back in. If they fail, they have to go to a magistrates’ or sheriff court to get a liability order before going to the next level of enforcement agents, stopping people having passports, or whatever.

This Bill changes that situation by amending the uncommenced provisions in Section 25 of the Child Maintenance and Other Payments Act 2008. When those amended provisions are commenced, the Secretary of State will be able to make administrative liability orders which will certify the debt that is owed by the paying parent and allow the CMS to take those further enforcement actions without going to court.

I have some questions of clarification. I say at the outset that I am not asking these questions to make difficulties or because I do not support the Bill. Some of them are questions I might in other circumstances have asked in Committee, but Committee stage may prove to be an unnecessary delay to the passage of the Bill, so I hope the House will indulge me in asking some of those questions now.

First, the 2008 Act allowed for some of its provisions to be commenced by SIs at different stages, but can the Minister explain why these provisions were never commenced? Is there a reason why the Government did not do so, for example, when child support was reorganised wholesale a decade ago? Secondly, I am interested to understand the reasons for the change in approach from that set out in the uncommenced provisions of the 2008 Act.

I am sure other noble Lords will have found it quite hard to get to the bottom of what the Bill is doing. The Bill amends the provisions of the 2008 Act; those in turn amend the 1991 Act. However, the provisions that the Bill amends were never commenced. One of the results of that, I presume, is that, if you go on to legislation.gov.uk and look up the 1991 Act to try to trace through what this will do, you will find that the clauses being amended are not there; they do not exist. I can only assume that the reason for that is that they were never commenced. Perhaps the Minister could tell me that.

I had to get the help of a clerk. In the absence of that or a Keeling schedule, the only way to work out what the Bill will do is to take the 2008 Act, lay it on top of the 1991 Act, lay the Bill on top of the 2008 Act and then trace through what the end result will look like. I did that because I am sad.

[Noble Lords]

Oh!

[Baroness Sherlock (Lab)]

A little less mirth at this point, if you do not mind; I am not that sad!

I suggest that if this happens again, although it is an unusual set of circumstances, offering a Keeling schedule to all the sad people around would be a good idea at the outset. It might save us all a lot of time.

There is an added complication, in that, at Second Reading in the Commons, my honourable friend Matt Rodda MP asked why it was necessary for the regulation-making powers in the Bill to be so broad. The Minister, Mims Davies, responded in Committee:

“I know that Baroness Stedman-Scott wrote to him on this point”.—[Official Report, Commons, Child Support (Enforcement) Bill Committee, 1/3/23; col. 10.]


I could not track down the letter in the Library or anywhere else, but a letter was issued on Wednesday this week under the signature of the noble Viscount, the current Minister. I understand that it is to be placed in the Library; I would be grateful if he could confirm that for the record. I am grateful to him for sorting that out. It is a very helpful letter, now that I see it. I am simply saying this on the record so that anybody coming after me who wants to trace the proceedings through will know where to find the relevant papers if anyone else out there is as sad as me and wants to do this in due course.

The effect of all this is that I struggle to be completely clear about what the Bill is doing, so I will ask a few questions. They might be stupid questions because I might have misunderstood it, but I would be grateful to get clarity on the record for now.

As well as moving to administrative liability orders, the big change seems to relate to the process of appealing a liability order. Section 25 of the 2008 Act allows appeal against an order to the First-tier Tribunal. I think that the Bill changes that to a right of appeal to a court. Can the Minister set out the reasons for that change?

I am also not completely clear about the position in relation to a court being able to query the amount of a child support liability. In that letter to Matt Rodda dated 17 May, the noble Viscount said:

“It is also currently the case with court issued liability orders—the magistrate or sheriff cannot question the underlying maintenance calculation”.


Indeed, Section 33(4) of the 1991 Act says:

“On an application under subsection (2), the court or (as the case may be) the sheriff shall not question the maintenance assessment under which the payments of child support maintenance fell to be made”.


I am sorry; I did say that I am sad.

I think the reason for this is that, at the moment, the matter would need to be dealt with on appeal at the First-tier Tribunal. The letter also says:

“The quantum of the debt is dealt with via the Appeals Tribunal—a paying parent can ask the Child Maintenance Service to reconsider any calculation, within 30 days of the calculation decision being made, through the mandatory reconsideration process”.


I am not sure whether that refers to the current situation or to that which will obtain after the Bill takes effect. So I ask the Minister: at the moment—that is, under the previous Act—is it the case that, if the Secretary of State goes to court to get an order, the court cannot question the amount of the liability but the parent can go to the First-tier Tribunal to appeal either the amount or the imposition of a liability order?

I also need help working out what happens after the Bill takes effect. New subsection (4), to be inserted by Clause 4(2), says:

“On an appeal under regulations under subsection (3), the court must not question the maintenance calculation by reference to which the order was made”.


Can the Minister clarify whether, once the Bill takes effect, the parent can appeal the imposition of the liability order to a court but not the amount of the liability? If so, how will a parent be able to appeal the amount of a liability order in future? Will it be only through mandatory reconsideration, or will there be an appeal route thereafter? I am not objecting to these provisions, just seeking clarity on them.

Finally, Section 33(5) of the 1991 Act says:

“If the Secretary of State designates a liability order for the purposes of this subsection it shall be treated as a judgment entered in a county court for the purposes of section 98 of the Courts Act 2003”.


Can the Minister say whether that will still apply to administrative liability orders issued by the Secretary of State?

Having said all of that technical stuff, we certainly do not want to oppose the Bill. Labour wholeheartedly supports the principle that both parents should support their children, that non-resident parents should pay child maintenance and that there should be enforcement for those who fail to pay, especially those who go to the steps that the noble Baroness, Lady Stedman-Scott, reminded us of. I am sorry to say that a considerable number of other examples are out there.

It is clear that enforcement of child maintenance obligations needs to be improved. The Bill should make a contribution to that end by speeding up the process by which non-resident parents can be made to pay what they owe. I hope, with the noble Baroness, Lady Bottomley, that we will in future see a further reduction in those who are not paying all that they owe, and that more children will eventually get the support of both of their parents, as they have every right to expect. For now, I simply thank all noble Lords who spoke today for some excellent speeches. I thank the noble Baroness, Lady Redfern, for her work in this House and Siobhan Baillie MP in the other. I look forward to the reply.

Carers: Financial Support

Baroness Sherlock Excerpts

Tuesday 16th May 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

I am very aware that some carers are extremely young, and I say again that I recognise the role of unpaid carers. The carer’s allowance is not intended to be a replacement for a wage or a payment for caring services, so we cannot compare it to the national minimum wage or the national living wage, for example. The noble Baroness raises another important point that we should continue to look at.

[Baroness Sherlock (Lab)]

My Lords, universal credit is a replacement for a wage, and there are people on it who can work only part time because of the need to care for a loved one, and, in some cases, because they simply cannot get hold of formal social care any more —things are pretty tough at the moment. They are not automatically excluded from the requirement to look for full-time work while on universal credit, so what guidance is given to universal credit work coaches in those circumstances?

[Viscount Younger of Leckie (Con)]

The guidance is continually updated for them. The noble Baroness will be aware of the link between the carer’s allowance and the universal credit tapering system, so that, if tapering is involved, you receive 55p for every £1.

State Pension Underpayment Errors

Baroness Sherlock Excerpts

Tuesday 16th May 2023 Lords Chamber

[Viscount Younger of Leckie (Con)]

Indeed, and it is very important that we engage much more closely with the customer base. Where underpayments are identified, the DWP will contact the individual to inform them of any changes to their state pension amount and of any arrears involved. There is now, I am pleased to say, a more direct route for those inquiring about underpaid state pension. Guidance on this, the House may not be surprised to hear, is on GOV.UK and went live in July last year.

[Baroness Sherlock (Lab)]

My Lords, these cases are very urgent for some people; 25p may be an issue for the over-80s, but in just January and February 14,500 over-80s were found to have been underpaid—out of a total of 46,000 underpayments. The worst affected were those who had been widowed, who were underpaid by, on average, £11,500. We all know how quickly the DWP will go after you if you get overpaid, so can the Minister assure us of two things? First, is priority being given to those who most need the money and who, frankly, may need it rather more urgently for reasons such as more advanced age? Secondly, the NAO suggested in its very damning report that the department assess all underpayments to see whether there is a systemic cause which might affect other cases. Is that now being done?

[Viscount Younger of Leckie (Con)]

Very much so; it is being done. I think I alluded to this earlier. Any systemic problem has to be looked at as a matter of urgency. On the other question the noble Baroness raised, I mentioned the number of extra people we have put on to this particular case. I reassure her and the House that the data shows that we have reviewed an average of more than 15,000 cases per month between November 2022 and February 2023, compared with an average of only 5,000 per month over the first 22 months of the exercise.

Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023

Baroness Sherlock Excerpts

Wednesday 26th April 2023 Grand Committee

I congratulate the noble Lord, Lord Davies, on this. I echo the words of the noble Baroness, Lady Drake, who knows so much in this area, about a need to be mindful of the longer-term potential risks. I look forward to hearing my noble friend’s response.

[Baroness Sherlock (Lab)]

My Lords, I thank all noble Lords who have spoken, especially my noble friend Lord Davies of Brixton for giving us this opportunity to reflect on the role and operation of the Pension Protection Fund.

My noble friend Lady Drake was right to remind the Committee of the huge value of the PPF to the thousands of members of DB schemes—both those who benefit directly from the £1 billion-plus of compensation it pays out every year and those who are happily sailing in calm pension waters but benefit from the security of knowing that the lifeboat is there, should they find they need it. Certainly, every day is a school day. I have learned a certain amount of history today, for which I thank noble Lords who have spoken, including the noble Baroness, Lady Altmann, and my noble friends on this side. They reminded me that the PPF was created by the Labour Government to protect the hard-earned pension savings of workers. It is important that we never take it for granted and that we, in our time, do all we can to keep it sustainable.

The Pensions Act 2004 requires the DWP to make an annual order to increase the PPF levy ceiling in line with the growth in earnings. As my noble friend Lord Davies noted, this year we have had two orders, as the first draft omitted the relevant figures in favour of “X”s. I do not want to make life harder for whichever poor person found that they had done that by accident, but I have to note that it is not the first error in recent times that we have had in a DWP order. When I was a non-exec on boards, we were always told that if an error is reported, the question to ask is: is it systemic? Clearly, one error is not systemic, but this is not the first. Can the Minister tell the Committee whether he is confident that his department is sufficiently well resourced with the people whose job it is to draft legislation and make sure that it is checked before it goes out?

The levy ceiling was set in primary legislation to be uprated annually in line with the growth in average weekly earnings, the rationale being that this would allow the increases in the ceiling roughly to track the increases in the pension liabilities of DB schemes, which are, in turn, linked to members’ earnings. In its 30th report, the Secondary Legislation Scrutiny Committee asked whether the policy of annual increase by the growth in earnings is still producing a sensible outcome, or whether it is far outstripping actual usage. It highlighted the gap between the levy ceiling and the actual levy. As we have heard, in 2023-24, the levy will be 16% of the ceiling, compared with 33% in 2022-23 and 43% in 2021-22.

The answer provided to the committee in that 30th report was that

“PPF investment performance has consistently performed ahead of target and combined with the PPF’s levy collection and risk reduction strategies, has resulted in a reserve of £11.7 billion and assets of £39 billion (as of 31 March 2022)”—

as mentioned by my noble friend Lord Davies. It was this which enabled the drop in the levy. The recent PPF funding review concluded that

“the PPF’s financial position has significantly strengthened in recent years, driven principally by strong investment performance, and a changed risk profile. As a result, the PPF is making a step change in its approach and entering a new phase where the focus will shift from building to maintaining its financial resilience”.

As somebody who likes the Janet and John version, I think that means that it has been building up reserves steadily and feels that the time has come to build them up more slowly in future.

The challenge for the PPF is that it has to tack a course between levying enough for its likely needs in the year ahead while ensuring that it is still able to bring in enough additional revenue if it suddenly faces large claims or a significantly riskier environment. Since it can increase the levy by only 25% a year, the decision on the levy can never just be a short-term consideration with a 12-month horizon. Is the Minister confident that the PPF has landed in the sweet spot?

I am also interested to hear the answers to the questions raised by the noble Baroness, Lady Altmann, and my noble friend Lady Drake about the consideration that is being given by the department and the PPF as to whether there is a need for more flexibility in the way that the levy is set and constructed.

Clearly, if the PPF is deemed to have more reserves than it needs, it can do one of two things: reduce the levy or spend more. My noble friend Lord Davies has come down clearly on one side of that, namely that it should choose to spend more. He rightly pointed out that this is a time of very high inflation and, therefore, the impact of the 2.5% cap on indexing is being felt particularly acutely at the moment. Clearly, that has put pressures on all pensioners, including those who rely on PPF payouts. My noble friend’s proposal has attracted support in principle from the committee. The obvious question to the Minister is: has any modelling been done on the cost of removing or raising the cap and, if so, what can he share with us on that—what did it show?

My noble friend Lord Davies also raised two of the questions from the independent review of the PPF. Can the Minister tell me whether the Government have responded to that review? I could not find it, but that may just be because of my search skills. Perhaps he could let us know.

I add another question that had been raised. The costs of administering the PPF are borne by the PPF administration fund and amounted, I gather, to £13.3 million last year. The independent review recommended folding the administration levy into the general PPF levy. Did that proposal find favour?

I am interested to hear the Minister’s take on this delicate balance facing the PPF, especially as it matures. It has been suggested that is in a healthier position than ever, but also that, as more schemes prepare to move into buyouts, the environment could get riskier in future than it has been in the past. It is perhaps time for more of the workings to be made manifest so that there is more clarity for all stakeholders—pension schemes, savers and pensioners—as to the balance of decisions that are being taken. I look forward to hearing the Minister’s reply.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I thank the noble Lord, Lord Davies of Brixton, for providing this opportunity to discuss the Pension Protection Fund and Occupational Pension Schemes (Levy Ceiling) (No. 2) Order 2023. This order enables the board of the Pension Protection Fund to raise a pension protection levy that is sufficient to ensure the safe funding of the compensation it provides, while providing reassurance to business that the levy will not be set above a certain amount in any one year.

I thank all noble Lords who have spoken in this short debate. As ever, I am somewhat daunted by the level of expertise, bar none, in this Committee. A good number of questions have been raised and, as ever, I will endeavour to answer them all—mostly at the end of my remarks, just to manage expectations.

I emphasise the Government’s continued commitment to supporting pensioners and protecting their hard-earned retirement savings. Ensuring that those who have worked hard all their lives receive a retirement income that provides them with dignity and financial security is one of our core objectives, and so it should be. We recognise that recent increases in the cost of living have placed particular pressure on pensioners’ household budgets, so we are taking action to target support specifically at pensioners. Around 12 million pensioners in Great Britain will benefit from the 10.1% increase to their state pensions from this month, fulfilling the Government’s manifesto commitment to apply the triple lock. More than 8 million pensioner households across the UK will receive an additional £300 cost of living payment this winter. To aid the most vulnerable, the pension credit standard minimum guarantee has also been increased by 10.1%.

As the Committee will know, combating inflation is one of the Government’s top priorities. Forecasts indicate that inflation is still likely to fall sharply by the end of 2023, in line with the Prime Minister’s pledge to reduce it by half by the end of the year.

I will return to the Pension Protection Fund in a moment, but first I will take a step back to consider the wider context of the schemes it protects. I pay tribute to the noble Lord, Lord Davies, for all that he has done; I was interested, pleased and perhaps not surprised that he had such a hand in the naming and setting up of the PPF—I am not sure of the precise date—back in the 1990s. With around £1.7 trillion of assets over 5,000 schemes and supporting nearly 10 million members as of March 2022, the defined benefit sector is critical for the UK population.

Set against this backdrop, the PPF’s £39 billion in assets under management as of March 2022, including £11.7 billion in reserves, certainly seem proportionate to the scale of its task. As of March 2022, since its inception in 2005 the scheme has stepped in to protect close to 300,000 members who might otherwise have received a greatly reduced retirement income. The noble Baronesses, Lady Drake and Lady Sherlock, referred to the success of this.

Despite the strength of its financial position, the PPF continues to face risks, the biggest being future claims for compensation and increased longevity. It uses its stochastic modelling tool, the “long-term risk model”, to help determine the funding it requires to protect against these future risks. Like other major financial institutions, the PPF protects against risk by holding reserves. The size of its reserve should therefore provide reassurance not only to existing members of the PPF but to members of all eligible pension schemes.

The noble Lord, Lord Davies, asked about the Pension Protection Fund’s reserve of £11.7 billion and asked whether that could be shared with its members—I think that was the gist of his question. It enables the Pension Protection Fund to protect financial security for current and future members. As I said, despite the strength of its financial position, the PPF continues to face a number of risks, the biggest being future claims to compensation and increased longevity, so there is a balance that I am sure the noble Lord could tell me much about.

The compensation provided by the PPF makes it a critical partner in delivering on the Government’s objective of ensuring financial security for pensioners. The PPF provides a crucial safety net to members of eligible pension schemes who are at risk of losing their pensions because of the insolvency of their employer. This safety net could not be more important in these challenging times.

I reiterate, however, that the Pension Protection Fund is therefore a compensation scheme; I know that my noble friend Lady Altmann defined it as an insurance scheme, which is fair enough. As such, it seeks not to replicate the benefits of underfunded pension schemes but rather to ensure that members are compensated fairly and sustainably. A balance must be struck between the interests of those who receive compensation and the levy payers who fund it. It is only by striking this delicate balance, perhaps, that the long-term stability of the PPF can be ensured.

Heritage Railways and Tramways (Voluntary Work) Bill [HL]

Baroness Sherlock Excerpts

3rd reading
Friday 21st April 2023 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I did not speak at Second Reading, but I declare an interest as president of the Steam Boat Association. In that respect, I intervene briefly to pay tribute to the noble Lord, Lord Faulkner, for the wonderful work he has done. We have found common cause in trying to maintain coal for our respective interests in steamboats and railways.

This is an important Bill. I do not know what the outcome of it will be, but it is essential that young people should be able to become involved in heritage steam and heritage vehicles of all kinds. It brings discipline and a knowledge of engineering, and it is great fun. One of the best birthday presents I ever got was when I turned 65 and my family arranged for me to drive a steam train. It was fantastic—almost as good as my wedding.

Even if the Bill is not the right way to achieve this purpose, I say to my noble friends on the Front Bench that the purpose is very important. It is absolutely fantastic that the noble Lord does so much work in this field, which is so important to tourism and to our economy.

[Baroness Sherlock (Lab)]

My Lords, I add our thanks to my noble friend Lord Faulkner, who has piloted the Bill. I regret that I could not find a relevant interest to confess at this point, but I commend those who have. I add my hope that Lady Forsyth has a forgiving nature when she comes to read Hansard.

Our heritage railways are a joy and a blessing to the nation, as well as a big contributor to the economy. It would certainly be a shame if children and young people were prevented engaging safely in voluntary activity down to legislation from a time when heritage railways were simply railways. In the earlier stages, the Government seemed confident that there is no legislative barrier. That is not completely accepted around the table, so I hope that the Minister is able to give some reassurance to my noble friend and that discussions are carrying on to make sure that this can happen. I am happy to wait to hear what the Minister has to say.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)]

My Lords, I am also grateful to the noble Lord, Lord Faulkner, for bringing this debate to the House for the fourth time, for which he is to be applauded. I agree with him that it is important to protect heritage railways for future generations.

Modern health and safety legislation—in particular the Health and Safety at Work etc. Act 1974 and relevant secondary legislation—does not prevent children and young people volunteering on heritage railways or tramways. The current legislative framework already allows for this to happen. However, it is important that such activities are carried out in a safe way with employers, organisers and those supervising the activities making sure that any risks are properly controlled.

The Government support volunteers and volunteering; to that extent, I echo the words of my noble friend Lord Forsyth. It can be a rewarding experience for young people, and it allows them to gain new skills and make a difference in their community. Volunteering is vital for the future sustainability of the heritage rail sector, with more than 22,000 people, 800 of them young people, giving their time to support heritage railway organisations across the country.

At Second Reading, my predecessor, my noble friend Lady Stedman-Scott, offered to bring officials from the Health and Safety Executive, the Office of Rail and Road, the Department for Digital, Culture, Media and Sport and the noble Lord, Lord Faulkner, together with the Heritage Railway Association to discuss how its guidance can be further strengthened. Unfortunately, unforeseen circumstances prevented this meeting happening, but I would very much like to make this offer again.

Under the 1974 Act, duty holders are required to control the risks they create from their operation. Although the Health and Safety Executive has the policy responsibility for the 1920 Act, in the case of heritage railways, the Office of Rail and Road is the regulator for health and safety legislation. Both regulators have confirmed that they would not enforce the 1920 Act solely to prevent young people volunteering on heritage railways. It has not been used in a prosecution since 2009 and, when it was, it was used alongside more modern health and safety legislation to prosecute in cases where young people were employed illegally in dangerous environments. In total, the 1920 Act has been enforced on eight occasions since 1998, and none of these prosecutions was against a heritage railway.

The law protecting children in the UK is a complex area, and this Bill would have implications not only on health and safety protections but on education legislation and local authority by-laws. To repeal or amend the 1920 Act may initially seem the best course of action; however, because of the links to other legislation, the process of making changes would be extensive. There is no evidence that this legislative change would make a difference to the number of young people volunteering, and therefore it is not proportionate to proceed with it.

I promised also to be relatively short, so I conclude by saying that the Bill seeks to allow children to gain valuable experiences volunteering on heritage railways and tramways, and the Government support this aim. However, we believe that the current legislative framework does just that. Nothing would be gained from a change to legislation when other, simpler and more effective options are available—in particular, working with the regulators to explore the types of activities and tasks that are proportionate for young volunteers.

At Second Reading, the noble Lord, Lord Faulkner, remained concerned about what would happen should something go wrong with a young person working as a volunteer, and he wanted stronger guarantees in relation to the 1920 Act. I want to reassure him that if such an incident occurred, both the Health and Safety Executive and the Office of Rail and Road have confirmed that there would be a full investigation, taking account of the risks that the young person was exposed to and how they were controlled. The existing framework is fair and effective, which is why, unfortunately, the Government oppose the Bill.