Pension Funds: Financial and Ethical Investments

Debate between Ed Davey and Richard Graham

Wednesday 22nd May 2019 Westminster Hall

[Richard Graham (Gloucester) (Con)]

I congratulate the right hon. Member for Kingston and Surbiton (Sir Edward Davey) on obtaining this debate, which is relevant, timely and of key interest to many Members across the House, not least those who are members of the parliamentary pension scheme. I draw attention to my entry in the Register of Members’ Financial Interests and highlight that I used to run the pensions business for a significant UK asset manager before coming to the House and that, along with my hon. Friend the Member for North East Hampshire (Mr Jayawardena) and the hon. Member for Sheffield South East (Mr Betts), I am one of the three current Members of the scheme’s board of trustees.

I have three points to highlight. First, this is a challenge for all pension funds not just in the UK but across the world. The rules and regulations by which pension funds are governed have changed significantly, not least under this Conservative Government. The Law Commission reports of 2014 and 2017 are relevant: 2014 was the first time that pension funds had in effect an obligation to take ethical or environmental issues into account. The 2017 changes allowed for some social investment. The parliamentary guidance to which my hon. Friend the Pensions Minister referred, which came in last autumn, made a significant change in requiring trustees to report, as part of the statement of investment principles, on the portfolio’s effect on climate change and what trustees intended to do about that. That is the background.

The parliamentary pension fund is conscious of its obligations under the 2018 regulations. We have had several meetings and discussions with different advisers to consider how we might best tackle the challenges and how to amend our statement of investment principles. The three existing Members who are trustees—me, my hon. Friend the Member for North East Hampshire and the hon. Member for Sheffield South East—had a separate meeting, and we also met one of the world’s leading green asset managers to look at what sort of investment vehicles are available to schemes that want to take a greener approach.

That leads to my second point. In trying to make a pension scheme greener, we have to be honest about the scale of the ambition that the right hon. Member for Kingston and Surbiton set out. I think I heard him correctly when he said that pension schemes should invest in new technologies to try to be carbon free. I challenge that gently, because I do not believe there is a company in the world that is completely carbon free and has never used a single vehicle, train or aeroplane that uses fossil fuels or any form of heater or boiler that runs on gas. It is virtually impossible, at this stage, to measure the complete carbon footprint of any business of significant scale.

As an illustration of the proof of that pudding, which shows the challenge for individuals, the chairman of Ecotricity—whose headquarters is in the constituency of my neighbour, the hon. Member for Stroud (Dr Drew)—is an outspoken champion of everything green, but he clocks up a huge number of air miles every year as a global ambassador for sport, for some United Nations subsidiary. My guess is that he does not travel economy class. There are challenges at an individual and at a corporate level.

[Sir Edward Davey]

To clarify, I was focusing on ensuring that companies were compliant with the Paris treaty. That does not mean that they need to be zero carbon now—that would be impossible—but they need to be on a pathway that is Paris compliant, and that is the case for many companies already. We just need fossil fuel companies and others to catch up.

[Richard Graham]

I am grateful for the clarification. I think the right hon. Gentleman understands that, from a personal investor or a pension fund investment point of view, finding an entirely fossil fuel-free investment would be very challenging.

My third point is that there is a challenge not just for pension funds, but for the wider financial sector. The most innovative green energy projects in the UK, particularly those looking at how we can mobilise some of the most powerful tidal streams in the world—including wave technology in the north of Scotland and cases being worked on in Cornwall, Hampshire and the west coast of Wales—are not easily accessible investment vehicles and are not at the scale that a significant pension fund could easily invest in. It would be useful to look at challenges around some investment regulations, including how major investors, such as large insurance companies that manage huge pension assets, could be allowed to invest more money almost in creating businesses to invest in new technologies.

I am conscious that time is running out, so let me move to my final point.

Supported Housing

Debate between Ed Davey and Richard Graham

Thursday 18th January 2018 Westminster Hall

[Richard Graham]

I am grateful for that intervention, because clearly the two-year issue is one aspect of this matter. However, I think the wider issue is probably around the definition of “short term”, as has been mentioned. I had an interesting briefing from representatives of Rethink Mental Illness, who said that they

“warmly welcome the decision not to proceed with the LHA cap, and to place long-term supported housing funding on a sustainable footing.”

However, they went on to raise

“concerns about some of the proposals for ‘short-term’ supported housing”,

which I think is normally defined as being under two years. That seems to be the issue that worries Rethink Mental Illness and other mental health organisations. Rethink Mental Illness has issued a joint letter with nine other organisations, aiming to tie down a little the definitions of “short term” and “very short term”. I hope that the Minister can shed some light on that, but we will all have to bear in mind that the consultation closes on, I think, 23 January. It will be difficult for the Government to say too much in advance of that, so I assume that the main purpose of today’s debate is for us to get our points in before the Government’s response to the consultation, which will no doubt include some of these points from charities.

[Sir Edward Davey]

On that key point, those in the Treasury always want to control everything and to ring-fence funds, so that nothing more can be used. However, if the funds run out, the need of the people whom we are talking about is still there. We need to get that point over to Treasury Ministers, and I am sure that the Minister would wish to do that, so this is supportive of her case to the Treasury. It seems to me that expenditure should be demand-led, not Treasury-capped and controlled. The idea that we would exclude people who are among the most vulnerable in our society because the money had run out seems to me absurd and wrong.

[Richard Graham]

The right hon. Gentleman makes his point with his usual passion. I will not offer a lecture to the Treasury on how they should provide and quantify the amounts of money for particular parts of the supported housing provision that the Government are looking at reshaping. At this stage, we are trying to register our concerns, as he has done, on aspects of the supported housing report that we feel are not yet reflected in the Government’s position. We are also trying to encourage the Government, when looking at the response to the consultation, in which all these points will no doubt come up, to think widely—this is the great advantage of having the Minister in her new role—about what the Minister knows from her experience, and what I and other Members will share today from our experiences, about what works best on the ground.

That brings me to my last main point, which is about domestic violence refuges. Two really good points have been made. The first, made by the hon. Member for Sheffield South East, is that domestic violence refuges are slightly different because in many cases the individuals want to be out of the area—not just the parish, as my friend, the right hon. Member for Birkenhead, mentioned, but quite often outside the constituency in which the violence happened. However, they will not all want to go to the same constituency, of course; they will want to move to different places, not least depending on where they have family links.

I can easily recall a woman fleeing from stalking in my constituency who wanted to be very far away, not only because of her fear of the individual who had stalked her, but because she wanted to go with her young children to where her mother was, to receive that additional family support. The issue is not just one of national funding, or having a national network, but of access, and how that works practically. If somebody fleeing domestic violence wants to move, for the sake of argument, from Gloucester to Birkenhead to take advantages of family links there, how will that work in practice? I can imagine that such access could be difficult.

I know the new Minister has experience of domestic violence refuges; I think I am right in saying that she helped to set one up in her constituency. That side of the argument is about the importance of localisation, as the hon. Member for Sheffield South mentioned. These things are very often best done on the ground by people who know how to do them. Bishop Rachel of Gloucester, in her new role, has very much championed a refuge that the diocese has effectively provided in the centre of our city. That is a really good example of a local initiative that I certainly would not want ruled out as a result of a very top-down approach, led by the man or woman in Whitehall who knows best.

Oral Answers to Questions

Debate between Ed Davey and Richard Graham

Thursday 18th November 2010 Commons Chamber

[Richard Graham (Gloucester) (Con)]

19. What his Department’s policy is on the future of the post office network.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

I refer my hon. Friend to the answer I gave to the hon. Member for Harrow East (Bob Blackman) earlier.

[Richard Graham]

I am grateful to the Minister. Earlier this summer, the sub-postmaster at Quedgeley in my constituency of Gloucester decided to close his franchise because he could not see enough ways of making the business profitable. Can the Minister confirm that his plans for increased access to Government services, banking services and credit unions will help reverse the disastrous trend under the last Government of spiralling decline and closure, and instead enable sub-postmasters to make their businesses profitable again?

[Mr Davey]

That is exactly right, and I pay tribute to my hon. Friend both for his work as secretary to the all-party group on post offices and for his work in finding a new sub-postmaster for Quedgeley. Our policies include not only our £1.34 billion of investment in the post office network, but our efforts to ensure that, through the pilots that we have announced, Government services provided through the post office network will increase, rather than decline.