Pension Schemes Bill

Debate between Baroness Coffey and Lord Palmer of Childs Hill

Committee stage
Tuesday 3rd February 2026 Grand Committee

[Lord Palmer of Childs Hill (LD)]

My Lords, what worries me is that the noble Baroness, Lady Coffey, says we should grab the challenge. I am not sure that I am ready to grab the challenge and not convinced that we should abandon, in any way, the Financial Conduct Authority. I wonder what representations have been made by the FCA on this. I would like to hear how the FCA feels about the Pensions Regulator taking over and what has happened in the past.

[Baroness Coffey (Con)]

I can assure the noble Lord that the FCA will not give anything up. In fact, it would probably rather swallow the Pensions Regulator.

[Lord Palmer of Childs Hill (LD)]

Maybe that would be a good thing. I am not convinced that the regulator pushing away from primary legislation to regulation is necessarily the way forward. I am not convinced that what has happened to date has failed. Therefore, I am not sure why we want to change this without adequate proof. The idea that the FCA wants to swallow up everything else is fairly normal in the gladiatorial forum that we have. I would like to see what the FCA and others have to say about this before we make a final decision.

Pension Schemes Bill

Debate between Baroness Coffey and Lord Palmer of Childs Hill

Committee stage
Thursday 22nd January 2026 Grand Committee

[Baroness Coffey (Con)]

This group of amendments is quite interesting in starting to sketch out what is important in the value-for-money approach that is being adopted through the Bill. I did not know when the noble Lord, Lord Palmer of Childs Hill, would speak to Amendment 49 and I will be interested to hear what he has to say on this, because the only other form of occupational pension is, in effect, the defined benefit, where you know what you are getting. I was a bit surprised that he felt that that would need to go further, because that is a direct relationship between somebody and their employer. Nevertheless, I am sure he will explain further.

The noble Baroness, Lady Bowles of Berkhamsted, has tabled Amendments 55 and 56 to Clause 12, which are sensible, but one thing that concerns me at the start of that clause is the word “may”. We should be beyond that at this stage, which is why I also support my noble friends on the Front Bench in opposing Clause 13 standing part of the Bill. There are just too many ifs, buts and maybes, but when it comes to Clause 13 there is nothing at all. It is just a blank cheque for the future. I am conscious that things can vary over time, but we should be in a position where we are getting some clarity on what will be in these value-for-money assessments so that people can make choices. We should be getting that clarity now. If necessary, we can put down regulations for affirmative procedures but, candidly, I do not think it is good enough that we have this sort of approach to defining what is there for the future.

I say to the Minister that I appreciate that this is a real step forward and I welcome that. People put their money in, they are not exactly sure what return they are getting and they might look every now and again at where it is coming out. I appreciate that there is a whole journey to go on in pensions education, as well as for the trustees, in terms of what is really happening with their advisers who continue to do low-risk, low-reward. I encourage the Minister, however, to come back on Report with a much stronger sketching out of what will be in these assessments, as required by Clause 13. For example, instead of just having the word “may”, have some “must” in there and then open up the power later to adjust as necessary. It is also valuable to be able to repeal.

Amendment 74 concerns the “Duty to formalise the Value for Money framework”; I know that my Front Bench will speak to that shortly. It is a useful exercise to check whether it is working. There are other amendments which basically make comparisons with other pension providers. That gets trickier if it is done at such a detailed level because, again, people might want some basic information on what is happening with their money. To pick at random, they might want their money with Standard Life instead of Scottish Life; if there is some variation, they might want to make a change. It is those sorts of things that I encourage the Minister to have more detail on by the time we reach Report.

[Lord Palmer of Childs Hill (LD)]

My Lords, as has been expressed, this group establishes the foundation of the value-for-money framework. We welcome the ambition to improve outcomes for savers. However, the effectiveness of value for money will depend on how it is defined, measured and implemented, and I welcome the comments from the noble Baronesses, Lady Bowles, Lady Altmann and Lady Kramer, which elaborated on these points.

I shall concentrate on Amendments 49 and 54 and I hope I can persuade the noble Baroness, Lady Coffey, that they are of value. These amendments will extend the scope of the Bill’s value-for-money provisions. They ensure that they apply not only to defined contribution schemes but defined benefit occupational pension schemes as well.

The arrangements make it clear that regulations can make different provision for different types of scheme. Critically, however, all schemes must be covered by the value-for-money assessment, with a proper value-for-money rating. Members of DB schemes deserve the same transparency and assurance about value for money as members of DC schemes. DB schemes still represent a significant part of the pensions landscape. Excluding them risks creating an uneven playing field and less scrutiny where it is still needed.

A single, consistent framework across occupational pensions improves comparability, avoids regulatory gaps and ensures that all savers benefit from the same standards of accountability. The two amendments in my name would ensure that the Bill delivers on its promise of value for money across all pension schemes. The measure is simple: every saver in every scheme, whatever its type, deserves value for money. Other noble Lords have expressed this in detail.

The noble Baroness, Lady Altmann, spoke about pensions jargon. We are here in a very rarefied atmosphere, where people have some knowledge—I have less than many in the Room—of what pensions are about and what phrases such as “default pensions” mean. We need to make it clear to people who have no interest in pensions other than receiving a cheque at the end of the month at a certain age what it all means. Some people need to be clear about the choices they make, and we need to do as much as we can. These amendments, both those that have been spoken to already and the two in my name, seek to protect people’s interests.

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[Baroness Coffey (Con)]

My Lords, this is an interesting group of amendments. My noble friend has explained the importance of clarity in who decides whether something is fully delivering. I want to ask about the different assessments being made at this point. We are now, effectively, on Clause 15 onwards. We have the ratings coming through. My noble friends on the Front Bench will explain why they do not agree with certain elements. There is merit, however, in trying to work out whether something is taking a nosedive and whether it is it fixable, but we need to be more specific about a reasonable period, and then a prescribed number of VFM periods needs to be put in the Bill, which it is not at the moment.

Thinking through what has been suggested, I am trying to understand how this will work. Clause 13, which we have discussed briefly, has a certain amount of potential calculations. We then have the trustees doing their own assessment, and then we jump forward to Clause 18 and the Pensions Regulator may check. This is all feeling quite random. Normally when we do ratings, the CQC or Ofsted make that judgment, so I am trying to understand how this will work in practice. Are the guidelines going to be fixed—for example, the average or the benchmark across all pension schemes is this, or the FTSE 100 index has changed this much, or the costs are this percentage? It would be helpful to start to get a proper pitch. I appreciate that the consultation may have gone out, but there must be thinking in the Government’s mind, not just the regulator’s, on what “good” looks like. There are risks, as identified by my noble friends, that we may be overburdening to the point that the minutiae become an industry in their own right. I am surprised to see the penalties put in primary legislation, which is unusual nowadays, although I agree that we need a better sense of how that compliance element, as set out in Clause 18, will work alongside the other amendments. My noble friend is right to say that we need to keep this straightforward and simple for people to be able to understand.

[Lord Palmer of Childs Hill (LD)]

These are obviously probing amendments. They are all to do with the jargon: if we are arguing about the jargon, how much more confused will the normal punter be in trying to understand the jargon. This group focuses on how value for money is expressed, enforced and communicated.

We support the principle that members should be able to understand whether their scheme is performing well. However, value-for-money ratings also carry significant power. They will influence trustee behaviour, in particular, as well as employer decisions and market structure. That makes proportionality and precision essential.

I am particularly concerned about overreliance on short-term performance metrics. Saving for a pension is, or certainly should be, inherently long-term. Schemes should not be penalised for temporary underperformance driven by market cycles or responsible long-term investment strategies.

We also question whether compliance mechanisms become blunt instruments. Labelling schemes “poor value” without clear context may drive consolidation for the wrong reasons, reducing competition without improving outcomes. Clear language matters—I use the word “jargon” once again—but so does nuance. Members need information they can trust, not simplified labels about market complexity.

I have some questions for the Minister. How will this regime distinguish between persistent structural failure and short-term variation? How will it use this intermediate rating? How will it encourage genuine improvement rather than defensive behaviour by trustees? Trustees are meant to be very careful; they will be cognisant of the intermediate position. I will be interested to hear the Minister’s views on that.

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[Baroness Coffey (Con)]

My Lords, this is an interesting part. It recognises a lot of our labour market, where people are working with multiple employers over a variety of time periods. Even those young people who were on the Kickstart scheme will have got contributions to a pension scheme, which they may completely forget about once they go to their next, perhaps longer-term, job.

I remember a few years ago the lovely people over in the Department for Culture, Media and Sport. They have a “good purposes” fund where they go after dormant assets all over the place and take them away, with a general promise that the money will come back if somebody tries to get it. I seem to recall telling them to jog on when it came to pension funds, although some negotiation might have been arranged.

I am just trying to understand how all of this is going to fit together. That is why I think Amendment 83 is particularly helpful; basically, it says that the pensions dashboard must be in place. This is about making an informed choice. One of the things I am trying to understand is whether Clause 22(3)(b), which my noble friends on the Front Bench have suggested should be removed, is passive and non-engaged. Will the trustees running the scheme be required to make some effort to try to contact that person so that it does not just slide away without people even realising?

In terms of the other aspect, I assume, under Amendments 80 and 81, it is right to try to get into some more detail about prescribing, which could perhaps be further enhanced by just getting to understand in Clause 25 what the Minister is thinking at this point, especially when it suggests that the trustees or managers of a scheme can determine whether it is the best interests for this to transfer or not. Are we talking about, say, people who are in prison, people who have gone abroad or people who are on a career break? It would be helpful to have a sense of what Ministers are thinking in terms of having this variety of powers, first, to be able to do it, but then to say, “Actually, we’ll leave it to the managers or trustees of the scheme to determine whether it is that person’s best interests”. I would be grateful for some understanding, again, of how this might work in practice, but the solution will definitely be Amendment 83 and I hope that the Minister will give that consideration for Report.

[Lord Palmer of Childs Hill (LD)]

My Lords, this is an appropriate time to stand, because Amendment 83 is signed by the noble Lord, Lord Vaux, and by me. In the absence of the noble Lord, Lord Vaux, today, and having discussed the matter with him, I speak on my behalf and his to Amendment 83. As has been stated, it is intended to deal with the risk that consolidating small pots might worsen the problem of lost or forgotten pensions.

We are all aware of the problem of people losing track of small pension pots: a problem that has increased in recent years as people tend to move between jobs more frequently, and may therefore end up with several small pensions, perhaps from many years ago. Chapter 2 of the Bill allows the Government to make regulations to consolidate small, dormant pension pots. I, and indeed the noble Lord, Lord Vaux, and the noble Baroness, Lady Coffey, support this as we believe that providing additional scale to small, dormant pots should enable greater efficiencies and a reduction in costs.

However, a possible unintended consequence could be to make it more difficult for a person to trace a forgotten pot if it is moved to a consolidator without their knowledge: for example, if any notice is sent to an old address. The introduction of a pension dashboard, as enabled by the Pension Schemes Act 2021, was intended to make it easier for people to identify pensions that they have lost track of or even forgotten. This has been somewhat delayed, but progress does, at last, seem to be happening. The connection deadline is October 2026, so hopefully people may start to be able to access the dashboard in the not-too-distant future.

In order to avoid making the problem of lost pensions worse, Amendment 83, in the name of the noble Lord, Lord Vaux, and myself, simply says that the regulations that would mandate the consolidation of a dormant, small pot could not be made until the dashboard had been available for at least three months. The three months is designed to give a bit of time to ensure that it is actually working and that any teething issues have been resolved. I think it prudent to ensure that we do not cause unintended consequences from what is otherwise a good policy, I hope the Minister will be sympathetic to the intention of the course outlined in Amendment 83.

[Baroness Altmann (Non-Afl)]

My Lords, I support the amendments in this group, particularly Amendment 83, which has received wide support. I think it is really important, as is the idea of lengthening the 12-month period for so-called dormant pots, and Amendment 81 from the noble Baroness, Lady Bowles, where, for example, a woman may take time off to care for children or other loved ones and intends to return, but her pension will have been moved before she gets back. Those are distinct possibilities under this scheme. We are talking about moving somebody’s savings—or investments; I am doing it myself—from one place to another, just because they have not done anything with their pension for a while. The pension fund is not meant to have anything done with it when you are younger; it is meant to just sit there and stay there.

Of course, the big problem that needs to be solved here is the costs to providers of administering all these very small pots. But the aim of the dashboard itself is meant to be to help people move their pots from one place to another. It seems to me that this particular section of the legislation is trying to deal with something that is meant to be dealt with by a different policy area. The consolidators, of course, will be attractive to providers to establish, and the money saving from not administering these small pots will also be attractive to the providers. But have the Government given any consideration to the idea of making, for example, NEST the consolidator? That is a Government-sponsored scheme. It has obviously had to have reasonable charges. Any transfers do not incur an upfront fee. That would run less of a risk of having consolidators that end up perhaps not performing well.

Employment Rights Bill

Debate between Baroness Coffey and Lord Palmer of Childs Hill

Report stage
Monday 14th July 2025 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, Amendments 31 and 32 in my name relate to the often-ignored subject of kinship care. The amendments seek to introduce—at last—kinship care leave as a paid entitlement and to establish a legal definition of kinship care, which is something many people do not even think about. It is time to address the current lack of formal employment rights and protections for kinship carers.

It is long overdue that we legally recognise and reward the grandparents, aunts, uncles and other relatives who step in as carers. More than 130,000 children in the UK are in kinship care, which is, amazingly, three times the number who are in foster care. When family crises occur—and they do occur—it is often kinship carers who step up to the plate, preventing children from being swept up into the formal care system.

Amendments 31 and 32 would allow families breathing space in order to adjust and, most importantly, support the well-being of the child. Support of kinship care is cost effective, as it reduces pressure on an overtasked care system. It is time to be compassionate for everyone’s long-term benefits—and I may well ask your Lordships to vote on this at the end of the group.

The Government’s Amendment 34 extends bereavement leave to include pregnancy loss. I commend this amendment to the House.

We are not debating or voting on Amendment 97 now, because it has been degrouped. It is in the name of the noble Baroness, Lady Grey-Thompson, and gives a statutory right to paid leave for working parents who are forced to stop working to care for a critically ill child over 28 days old. This is described as Hugh’s law, after one who suffered in this way. I commend this amendment, which we will get to when we get to its degrouped place; it was originally in this group.

The other amendment in my name, Amendment 104, is on statutory carer’s leave. We owe a great deal to unpaid carers, who are the backbone of our society. Their support is worth a staggering £184 billion a year to older, ill or disabled relatives or friends—support without which society would collapse. The reality, however, is that this comes at a cost to them. Around 600 people a day give up work to care, and 1.2 million face poverty and financial hardship. Research shows that the majority do not have a choice about caring, because there are no care alternatives available. Employers are losing skilled labour every day because of caring, at a cost to their productivity. For some small employers, which we have spent a lot of time talking about, losing skilled workers can have an even bigger impact.

This amendment in my name would provide for the Government to publish regulations that would recompense employers, particularly small employers. There is insufficient social care and health services to plug the gap. Supporting carers to stay in employment is cost effective, and many carers have told Carers UK that they want to stay in work. Polling carried out by Carers UK found that 88% of unpaid carers of working age said that they needed paid carer’s leave.

The amendment that we brought forward in Committee has been refined, I hope for the better, having received comments from the Minister that the original drafting would have been different to that for other entitlements. We have therefore aligned the entitlements to pay for statutory carer’s leave with other similar statutory entitlements. This is very modest and yet would reflect a critical step forward for unpaid carers. The modest entitlement would normally be up to only five days of paid leave. It is described as a week, and a week is—amazingly—described as up to five days. This is how it is set out in the Carer’s Leave Act.

The Government could set the rate of statutory pay. The cost of statutory carer’s leave, based on estimates from Carers UK, is between £5 million and £32 million per annum. That is based on actual take-up rates of carer’s leave with employers. Centrica has two weeks of paid carer’s leave at full pay, with a further two weeks of matched leave. The Carers UK report says that just 3.4 days, on average, are taken by employees as carer’s leave. The Government’s estimate of the cost of carers’ inability to work is £37 billion. The personal cost is even greater if carers have to give up work, as they do, in order to care.

In advance of the Bill, Carers UK has been talking to carers about what paid carer’s leave would mean. One carer, who is a bus driver, has not had a holiday in seven years because of caring. He takes annual leave first, because it is paid, then unpaid leave if he has to. Work is extremely important to him, as he said that it “keeps him going” but that it is hard caring for two people without a break. He has been to his council, but does not get much support. He is still waiting, because the more trained care workers who his son needs are not available.

Another carer, who works in the NHS, is struggling to work and care, but she does not have paid carer’s leave. This leaves her burned out and exhausted, and she has to take her annual leave. We cannot afford to lose valuable NHS staff as a result of providing unpaid care. Paid carer’s leave is vital for those who cannot afford to take unpaid leave. What hope can the Government give to people like this who juggle every day and who need support such as paid carer’s leave, so that they can keep caring and working?

Will the Government go one step further and commit to building on the Carer’s Leave Act 2023 in introducing paid carer’s leave? Given that a parental leave review has been published for consultation and engagement, can the Minister tell the House what the Government’s message to unpaid carers and the review of carer’s leave are? Will the objectives, timetable, report and engagement be published? Carers are a valuable resource, but they are not appreciated. It is time that we in this House started appreciating them. I beg to move.

[Baroness Coffey (Con)]

My Lords, I speak to the two amendments that I have tabled. The loss of any foetus or potential child is a massive grief, and I entirely understand why this provision has been brought forward. My right honourable friend Jeremy Hunt commissioned the independent review into pregnancy loss several years ago, and a variety of actions have taken place, particularly in thinking of people with miscarriages. By law, a stillbirth is anything from 24 weeks onwards, but being able to register a birth such that, in effect, people who lose their foetus after 24 weeks can have a birth certificate in the same way was a good thing to do.

I am speaking today to try to get clarity on what the Government are proposing. If the Bill specifically mentioned miscarriage or ectopic pregnancy or molar pregnancy, I would not be speaking, although I would still want to get some understanding through Amendment 35. Perhaps I will start with that first.

I would be very grateful if the Minister could explain the new Section 80EA(3A)(b) of the Employment Rights Act 1996, to be inserted by Amendment 34. It says that a person is bereaved if

“the employee satisfies specified conditions as to relationship with … a person who has suffered a pregnancy loss … or … a child who had been expected to be born had a pregnancy loss of a specified kind not occurred”.

It would be useful to understand why it is not being put in the Bill who it is expected that this will extend to—I do not know whether it is the father, a donor, a sibling, a grandmother, a grandfather and so on. I completely understand why, at such a difficult moment, we might want to extend bereavement leave, and not just for the mother, but it would be useful to get a further sense of that from the Government.

The main reason I am speaking today is my Amendment 41. It is an amendment to Amendment 40, which inserts a new paragraph into Clause 18 that defines “pregnancy loss” as

“the ending of a pregnancy after less than twenty-four weeks of pregnancy in any way other than a live birth, or (b) the failure of an embryo to become implanted following a transfer carried out in the course of providing treatment services within the meaning of the Human Fertilisation and Embryology Act 1990”.

I am conscious that these recommendations were made by a Women and Equalities Select Committee report, but I want to understand what is in the Government’s mind today. It is quite a moment to choose to, in effect, use the Employment Rights Bill to define what a pregnancy is, particularly with regard to IVF. I know many people who have been through IVF, who of course have disappointment if it does not work that month or that year, and will try again. The fact that roughly 30% of IVF treatments are successful—I have shared those statistics previously—leaves a whole range of situations where a transplant has not happened. As I said, I am somewhat concerned at what is almost the redefinition of “pregnancy” when we are considering the body of a woman.

Furthermore, when it comes to

“the ending of a pregnancy … in any way other than by a live birth”,

the latest statistics published by the Department of Health and Social Care stated that there were around 250,000 abortions in this country in 2022. That was up 17% from the year before. Meanwhile, although I can entirely understand aspects of foetal anomaly or risks to the health of the mother, according to Department of Health and Social Care statistics that were published and referenced in the Commons Select Committee report, there were around 3,300 abortions for those reasons. There is a very significant difference between 3,300 and 250,000 but, as it stands, anyone who had a legal abortion will be counted in that statistic. I am not aware that the Department of Health and Social Care has yet decided how it will count in its statistics the number of abortions from pills through the post. At the moment, it does not even count the number of pills issued.

I am trying to get clarity from the Government. Is it really their intention that a person who has an abortion—up to 250,000 people a year—will be entitled to bereavement leave? That is what this primary legislation is saying.

On other issues in the Bill, all sorts of things are put into Henry VIII powers or regulations or other conditions. I seek to understand why the Government feel that this should be in the Bill. Obviously, every loss undoubtedly brings horrific grief. I know that, having had had to care for people in that situation and similar, and I understand why this is going ahead. Despite the potential for sickness leave being open, I recognise that under the Equality Act any discrimination would be against the law. I understand the steps the Government are taking, but I would be grateful for a genuine and huge level of detail on what they are setting out today in primary legislation. I commend my amendments to the House.

Public Authorities (Fraud, Error and Recovery) Bill

Debate between Baroness Coffey and Lord Palmer of Childs Hill

Committee stage
Wednesday 11th June 2025 Grand Committee

[Lord Palmer of Childs Hill (LD)]

My Lords, Amendment 65 in my name would require the Minister for the Cabinet Office to,

“within six months of the passing of this Act, lay before Parliament a”

comprehensive

“report evaluating the extent of public sector fraud that occurred during the COVID-19 pandemic”.

The Liberal Democrats have long championed transparency, accountability and robust oversight of public funds. This amendment aligns with those values by ensuring that Parliament receives a clear, detailed assessment of how fraud had an impact on public resources during an unprecedented crisis. Without such transparency, we risk missing critical lessons that could inform future safeguards and improve the resilience of our public sector. The pandemic presented unique challenges that, unfortunately, created opportunities for fraud on a scale not previously seen. It is only right that we fully understand the scale and nature of the issue, not to assign blame but to strengthen our systems and protect taxpayers’ money.

This amendment reflects the Liberal Democrat commitment to evidence-based policy and open government. By requiring this report, we would promote accountability and ensure that future emergency responses are better equipped to prevent fraud, protecting public trust and ensuring that resources reach those who genuinely need them. There will be other events; we want to set the scene so that they can be dealt with. That is what this amendment seeks to do. I beg to move.

[Baroness Coffey (Con)]

My Lords, I rise to speak to this amendment because I was at the Cabinet table when Covid-19 hit this country. I am very conscious of the arduous activity that went on among brilliant civil servants but, of course, mistakes were made, as well as successes.

It is interesting to try to understand why the noble Lord, Lord Palmer of Childs Hill, wants to go into this matter further, recognising that, in Parliament, there have already been several Select Committee inquiries; one was specifically done on fraud. Of course, we also have the public inquiry that is under way, to which the Government are contributing. I am trying to understand the purpose of this amendment and this extra report, recognising that the Government will in no way make any comments until the inquiry has concluded.

My understanding is that the inquiry is still going to take evidence in 2026. For what it is worth, as I am sure the Ministers here will be relieved to know, I am absolutely convinced that this Bill will become an Act of Parliament well before the end of 2025. So there is something here of an odd overlap. I understand that this will continue to be a subject of interest.

This is quite a wide ranging-element. I know that fraud happened. There is no doubt of that. However, we also averted fraud in the DWP. We managed to stop £1.6 billion going out on one particular weekend by intervening. There were plenty of attempts at fraud and, unfortunately, there were successes. Some of those people who committed that fraud are now in jail, thanks to the endeavours of the Government.

The noble Lord, Lord Palmer of Childs Hill, talks about resources that the country may have been deprived of when addressing the issues of Covid. I can honestly say to your Lordships that no resources were set aside at all. This is one of the reasons why there have been considerable challenges on aspects of needing to repay the debt that may have been acquired due to spectacular extra financing, whether that was through businesses or about people who had never claimed benefits in their life before, making sure that they got the money that we believe they were entitled to. That was while recognising that some of the easements initially may have been subject to some fraud, but we also made every effort to try to stop it. I have already given an example of where, in one weekend, £1.6 billion was averted.

For that purpose, the amendment genuinely is unnecessary. The statutory inquiry, I hope, will not be the longest-running statutory inquiry because that is not what the country needs to consider. It would not be the best use of government resources to initiate their own further inquiry and honour this amendment.