Universal Credit Fraud

Debate between Lord Foulkes of Cumnock and Baroness Buscombe

Wednesday 10th July 2019 Lords Chamber

[Baroness Buscombe]

My Lords, of course we take this extremely seriously, as I say. We have to be extremely careful to ensure that victims are properly looked after and supported through the process, but also that those who have committed fraud have the full force of criminal justice thrown at them. This is crime. I look forward to the latest British attitudinal survey being published imminently, because the last survey showed that people on the whole felt that some crime was fine, as long as it was not a lot of crime. We have to confront this, look after those who need our support and use our brilliant fraud and investigation teams, working with the CPS, to make sure that those who have committed the crime are brought to justice.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, like the right reverend Prelate, I am a little confused. If there is a brilliant fraud and investigation team and the Minister is genuinely concerned, why did it take a BBC investigation to draw it to our attention?

Occupational and Personal Pension Schemes (Amendment etc.) (EU Exit) Regulations 2018

Debate between Lord Foulkes of Cumnock and Baroness Buscombe

Tuesday 15th January 2019 Lords Chamber

[Baroness Buscombe]

My Lords, it was as a result of ongoing communication with our industry stakeholders that we discovered that it was important to re-lay the regulations. In a sense, there was not a formal consultation, but we do have ongoing and constant communication with industry stakeholders who will be affected by these minor and technical amendments when we leave the European Union. I stress that we were very concerned to correct a fault in terminology, which is why we withdrew the original draft.

[Lord Foulkes of Cumnock (Lab Co-op)]

The Minister read from paragraph 10.1 of the Explanatory Memorandum for my noble friend Lord Adonis. That paragraph does confirm what she has just read out: that,

“the Department did engage with and respond to industry concerns over one aspect of the draft regulations that created an unintended consequence”.

How can she know, without carrying out a full consultation, that other aspects would not create unintended consequences?

[Baroness Buscombe]

The noble Lord, with all his experience, will know that all legislation, however much it is consulted upon, runs the risk of unintended consequences. However, in this case, there was ongoing communication and involvement with industry, and it was industry that pointed out the risk we were taking by laying the regulations with the wrong terminology—the words “UK regulated market”. We redrafted regulations that were originally laid in draft on 24 October so that we could fix an unintended consequence that industry stakeholders highlighted for us. They were concerned that the use of the term “UK regulated market” in the original draft regulations could have resulted in occupational pension schemes having to disinvest from regulated markets outside the UK. So there was a concern that this could impact further than was intended. The redrafted regulations re-laid on 3 December addressed the issue by clarifying the definition of “regulated market” to include United Kingdom, European Economic Area and other regulated markets. Industry stakeholders have welcomed the change.

The Explanatory Memorandum that supports these regulations sets out the legislation in Great Britain that is being changed. Noble Lords will see there a list of all the Acts where changes are required to be made. Primarily, the regulations make changes to reflect the UK’s new status as a state independent of the EU in the event of no deal and to ensure that domestic legislation continues to operate effectively following the UK’s exit from the Union. Consequently, they deal with the authorisation of cross-border pension schemes—that is what they are really about.

The EU’s cross-border authorisation regime applies to cross-border activity between member states and requires pension schemes to seek authorisation from their regulator to undertake such activity. Broadly speaking, cross-border activity is when an employer in one member state selects to base its occupational pension scheme in another.

These regulations recognise that once the UK ceases to be a member state following its exit from the Union, it will no longer be subject to the rules of the regime for any cross-border activity. Consequently, the regulations remove the requirement for UK occupational pension schemes to obtain authorisation from the Pensions Regulator to carry out cross-border activities.

As I have said, but I will repeat it for all noble Lords to make sure that I have got the message across, these regulations were originally laid on 24 October and were intended to make changes to domestic legislation. It was at that point that industry stakeholders in conversation with our department identified an unintended consequence of the draft regulations relating to its use of “UK regulated market” as a definition of regulated markets rather than “other regulated markets”. Industry stakeholders were concerned that this could have resulted in occupational pension schemes having to disinvest from regulated markets outside the UK.

As this was not the original policy intent, and following engagement with industry stakeholders, we redrafted the regulations to correct this unintended consequence. The draft regulations that were re-laid on 3 December addressed this issue by extending the definition of “regulated market” to include UK, EEA and other regulated markets. A corresponding change has been made to the Northern Ireland regulations, which I will speak to shortly.

These instruments are part of a wider legislation package that my department is laying. We have already laid statutory instruments relating to social security and to the European job mobility portal, more commonly known as the EURES regime.

As I have said to noble Lords, a formal consultation on these regulations was not carried out by the Department for Work and Pensions. It was not considered to be necessary because the regulations do not make any policy changes and make only minor and technical amendments designed to ensure that UK legislation operates effectively on the day the UK leaves the EU.

Similarly, we expect the regulations to have no significant impact on business, charities, voluntary bodies or the public sector. In fact, in their absence, if elements of the UK’s occupational and personal pensions legislation do not work effectively after the UK departs the EU, it will result in associated costs on all involved parties; for example, extra resource invested in trying to clarify the situation. These instruments make the changes needed to avoid this situation and, on this basis, are assessed to be at least cost-neutral or beneficial on balance to all involved parties, charities and voluntary bodies. In other words, we felt it was very important to make sure that the legislation was clear prior to leaving the EU.

--- Later in debate ---

[Baroness Buscombe]

My Lords, we are constantly in touch with the Pensions Regulator, with which we have a very good relationship. We work very closely with industry. My honourable friend in another place, the Minister for Pensions and Financial Inclusion, also has ongoing discussions with the Pensions Regulator and individual companies within the pensions industry. The noble Lord will recall that I have stated that there was no formal consultation because there was no change to policy. Given that there is no change to policy and that we are dealing with minor and technical amendments, and given our constant and ongoing involvement with the industry—those in the industry are very much in touch with each other; it is not an industry that is hard to be in touch with—and this niche area of cross-border activity of pension companies and pensions, it is fair to say that the department has done all that is reasonably necessary and, indeed, cost-effective to limit our consultation to an informal ongoing communication with both the Pensions Regulator and industry stakeholders.

[Lord Foulkes of Cumnock]

On this constant and ongoing activity with the industry, I wonder whether the Minister can help me. The territorial extent of this provision is the United Kingdom. What is the position if my pension is based in the Channel Islands or the Isle of Man, or if my employer has a base in the Channel Islands or the Isle of Man? How is that covered?

[Baroness Buscombe]

My Lords, we are talking about occupational pensions and private pension schemes. If the noble Lord has a pension in that area, it would be important for him to make sure that he is in touch with his pension provider, to make sure that payment will continue. However, these regulations have nothing to do with payment of pensions.

[Lord Foulkes of Cumnock]

I am not asking that. I should make it clear that I do not have a pension based in the Channel Islands or the Isle of Man. At least, if I do, then Brian Donohoe is going to be in trouble, because he is in charge of parliamentary pensions, which is all I have. I asked the question as a Member of this House, scrutinising this on behalf of people outside who may have pensions based in the Channel Islands and the Isle of Man. I have read through the whole document and there is nothing related to either. What discussions have taken place? As the Minister knows, the Channel Islands and the Isle of Man have large financial sectors. They are providers of pensions and investments that are the basis for other pension funds that may be based in the United Kingdom or elsewhere in the European Union. How are the funds in the Channel Islands and Isle of Man affected by the proposed changes? It is not clear in any part of the document and I hope the Minister can tell the House.

[Baroness Buscombe]

My Lords, if I am unable to give the noble Lord a full reply, or after this debate my officials tell me that there is something else to say about the Channel Islands, I will certainly write to him and share my letter with all noble Lords. We are not moving away from current legislation. We are just introducing minor technical amendments to make sure that current UK legislation carries on working seamlessly in the event of no deal. There is nothing in UK private occupational pensions legislation that prevents occupational pension schemes making pension payments overseas. We do not expect this to change as a result of the UK withdrawing from the EU. We also do not expect there to be any issues with EEA schemes making occupational pension payments to residents in the UK. However, as I have said, individuals should contact their EEA scheme to clarify whether they expect any changes as a result of the UK leaving the EU.

These regulations are not about pay, but if a pension is paid into a UK bank account the bank should contact the scheme member if it expects any changes as a result of the UK leaving the EU. In the same way, those points would extend to any arrangements that an individual had with pension providers in the Channel Islands and elsewhere.

I would like to progress and complete my opening statement. We expect these regulations to have no significant impact on business, charities, voluntary bodies or the public sector. These instruments make the changes needed to avoid a situation that could be other than cost-neutral or beneficial. All noble Lords will know that the European Union (Withdrawal) Act is a crucial piece of legislation that will ensure that, whatever the outcome of negotiations, we have a functioning statute book on exit day, providing certainty to people and businesses across the UK. The Act enables this by providing a power for Ministers in the UK Government and devolved Administrations to deal with deficiencies in the law arising as a result of our exit from the EU. I beg to move.

[The Senior Deputy Speaker (Lord McFall of Alcluith)]

The Question is that the two Motions in the name of the noble Baroness, Lady Buscombe—

Benefit Reforms

Debate between Lord Foulkes of Cumnock and Baroness Buscombe

Thursday 10th January 2019 Lords Chamber

[Baroness Buscombe]

My Lords, I welcome this question from the right reverend Prelate. First, I want to say that we now spend more in this country than any other developed nation on family benefits.

[Lord Foulkes of Cumnock (Lab Co-op)]

That does not answer the question.

[Baroness Buscombe]

I said I would begin by saying that we now spend more in this country than any other developed nation on family benefits. The aim of the two-child policy is an important one: to strike the appropriate balance between support for claimants with children, and fairness to taxpayers and families who support themselves solely through work. Parents who support themselves solely through work would not expect to see their wages increase simply because of the addition of a new child to their family. However, we are looking at the policy with regard to its extension, which is due to take place next month.

Kinship Carers: Two-child Limit Policy

Debate between Lord Foulkes of Cumnock and Baroness Buscombe

Monday 11th December 2017 Lords Chamber

[Baroness Buscombe]

I thank my noble and learned friend for his question.

[Lord Foulkes of Cumnock (Lab)]

Reconsider it.

[Baroness Buscombe]

I have to say that we have already said that we have responded with enormous sympathy to this. The policy is currently under review, but it should also be made clear that the Government have assessed the impact of the policy from an equality and human rights perspective throughout its development and in its implementation, thus meeting our obligations under the public sector equality duty and ensuring compliance with human rights and other international obligations.

Pension Protection Fund and Pensions Regulator

Debate between Lord Foulkes of Cumnock and Baroness Buscombe

Thursday 13th July 2017 Lords Chamber

[Baroness Buscombe]

My Lords, I too read the article in the Financial Times this morning. The truth is that these pension freedoms are proving very popular. However, they raise important issues around the operation of the market and how we support consumers, so we will be working with the Financial Conduct Authority on the next steps to address this issue.

[Lord Foulkes of Cumnock (Lab)]

My Lords, the mention by my noble friend Lord McKenzie of irresponsible employers reminded me of Sir Philip Green. Can the Minister bring us up to date on the position of the BHS pensioners and what the Government are doing to help them?

[Baroness Buscombe]

My Lords, the financial settlement regarding BHS is valued in total at £363 million, and £343 million has already been placed in a fully independent escrow account to fund a new scheme. The settlement with Sir Philip Green for the British Home Stores scheme is the largest of its kind the Pensions Regulator has reached to date. Indeed, in total, the Pensions Regulator has secured more than £1 billion for pension schemes through the use of settlement in avoidance cases. Existing members of the scheme now have three options: transfer to the proposed new pension scheme, opt for a lump sum payment, if eligible, or remain in their current scheme, which is expected eventually to transfer to the Pension Protection Fund. However, the new scheme will be a fully independent trust with independent governance and trustees. Neither Sir Philip Green nor the Arcadia Group will be involved in the management of the scheme. In the highly unlikely event that the new scheme fails, members can rely on the Pension Protection Fund.