State Pension Age

Alex Cunningham Excerpts

Tuesday 21st November 2017 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

Mr Hollobone, it is a pleasure to serve under your chairmanship, which has seen more than a dozen people take part in this short debate. I congratulate my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) on securing his first of many Westminster Hall debates. I very much believe that he is loud and proud. I love that voice, which reminds me so much of home, although I left the area when he was just three years old. He made an excellent speech; it was a trip right through the social security system and how it is failing so many of our people.

We could talk about many things today, from the plight of the ’50s-born women whom the Government are continuing to ignore, to the ill-advised increase in the state pension age that was brought in by the Tory Government and which hits the poorest and most vulnerable people hardest. Several Members have addressed the WASPI issue and the Minister will probably be pleased to hear that I will not dwell on the ’50s-born women. However, as I said in the House last week, this issue will not go away and the Government need to act, starting with an extension to pension credit, giving women the option to claim their state pension two years earlier at a slightly reduced rate. That is not a complete solution, but it would provide something for that very wronged group.

Then we have the issue of increasing the state pension age. Age UK said that it is reasonable to look at the state pension age as longevity increases, but it needs to be accompanied by support to enable people to work longer and protection for those who cannot. I share Age UK’s view, but I must stress that longevity is not enough. We need to consider quality of life and health. That said, University College London’s Sir Michael Marmot says that increases in life expectancy have slowed down or halted, but even if we might be living a little longer but not living healthily for any longer, increasing the state pension age is bad news, particularly for the poorest in our country and those with ill health.

The inequalities are not illustrated better anywhere than in my constituency, where a man in the poorest ward can expect to live 16.4 years less on average than a man in the most affluent ward. The man in the poor ward may have started work at 16 and paid national insurance contributions throughout his adult life, and is more likely to have been in a physically demanding job and to have experienced ill health at a younger age. He may even be lucky to get the state pension for a handful of years before dying. Contrast that with a more affluent, professional person, who may not have started work until his 20s, who retired at 60 because he could afford to, and who then picked up his state pension when he was still fit and healthy enough to enjoy it. The manual worker will have worked more years and may have paid contributions for 50 years—perhaps 10 more than the professional. How is that just? How is that fair? We have heard that people die younger, and the illustration from Glasgow of somebody dying aged 63 and never reaching state pension age is very relevant.

The Cridland review, which will effectively cost 7 million people £10,000 each, failed to come up with an answer to this question, but even John Cridland spoke of the need for greater support for people in hard physical jobs that offer them limited chance, if any, of a few years of healthy retirement.

[James Cartlidge (South Suffolk) (Con)]

We have not yet heard anything from the hon. Gentleman about costs. Does he accept that unless we raise the retirement age, the system of paying for the state pension will be financially unsustainable?

[Alex Cunningham]

Cost will always be an issue, but some have made the point that we need to base decisions on fact and new data. The data are changing. People will not necessarily live longer, so the cost might not be higher in the longer run.

We believe that we should have a variable state pension age whereby a person’s work background, health and income are considered, with their retirement age being based on their life expectancy, not just the national average. The proposal to raise the state pension age even further all but wipes out the chances of many of our people enjoying a few years of retirement in good health. The state pension should be flexible and recognise the contribution that people have made to our country, and the system should be designed to work for everyone.

I really worry about the pressure facing older people in our country. The cost of living is going up and their pension is getting further away. At the same time, many are unwell and unable to work, or they may be caring for even more elderly parents or young children, making a very different but relevant contribution.

I wonder whether the Minister is even aware that 1.9 million pensioners now live below the poverty line. That means more struggling older people on social security and extra strain on the NHS when vulnerable people are living in poverty, all within a system that has seen that value of income shrink since 2010. I referred to older people with caring responsibilities. Many will fall short of the 35 years of contributions that are needed to secure a full pension. We need to do things for all those people, for all the different groups in our community, because that would be the fair and right thing to do.

[Mr Philip Hollobone (in the Chair)]

If the Minister can finish his remarks no later than 5.27 pm, Mr Gaffney will have time to sum up.

--- Later in debate ---

[Guy Opperman]

I will make two points about that. The first is that anybody who proposes a situation involving framing new legislation that lacks equality between men and women will have to deal with the Equality Act 2010, because any new transitional provision runs the risk of creating a new inequality between men and women and being subject to challenge.

Further to the proposal made by the hon. Member for Coatbridge, Chryston and Bellshill, the Labour party’s position in its manifesto, as agreed with by the hon. Member for Paisley and Renfrewshire South (Mhairi Black) and presumably the Scottish National party, is to reject any increase in the state pension age above 66. That would involve scrapping the Pensions Act 2007, the work of the Labour Government in the Blair-Brown years. Costs have been mentioned; let me be clear that the costs of capping the rise in state pension age at 66 in 2020 would be £250 billion higher than proceeding according to the timetable set out by John Cridland.

[Alex Cunningham]

The Minister referred to Labour policy, but he edited it to a few words. We actually said that we wanted to freeze the pension age at 66 and set up our own commission to consider longevity and pensions issues and how we could help the more vulnerable in our society.

[Guy Opperman]

I will quote the hon. Gentleman’s party manifesto to him, just so we are utterly clear.

Support for Care Leavers

Alex Cunningham Excerpts

Thursday 16th November 2017 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship this afternoon, Mrs Gillan.

First, I congratulate the hon. Member for Brentwood and Ongar (Alex Burghart) on securing this debate. I am pleased that we are united in recognising that we can all do more to give care leavers the best possible start to their adult lives. If the hon. Gentleman never says anything important again in this House, he said something important today: “Young people in care are our children”. That is a very important statement. I find it quite difficult to find much to disagree with in his speech, although the Government’s success is perhaps not quite as rosy as he thinks. In fact, his speech offered real challenges to the Government and I will go on to offer some of my own.

My hon. Friend the Member for Birmingham, Hall Green—

[Steve McCabe]

Selly Oak.

[Alex Cunningham]

It says “Hall Green” here. I looked it up specially. I am sure that my hon. Friend is correct and I am wrong. He has spent a lot of his time championing looked-after children in this place, and I congratulate him on and thank him for that. He mentioned that these young people are full of potential. All young people are full of potential; we just need to give them the extra support they need to achieve that.

The hon. Member for North Ayrshire and Arran (Patricia Gibson) talked about services being developed with the knowledge of the young people involved. I agree with that, and it is something we tried to do when I was a councillor in Stockton. She went on to give shocking statistics on the number of former care leavers in the criminal justice system. That is all the more reason for us to do much better.

I thank the hon. Member for Colchester (Will Quince) for his work with the all-party parliamentary group for ending homelessness. The study it did focused on care leavers. I have spent a lot of my life trying to get people to focus more on care leavers, and it is great that we see that happening across the piece. He talked about the importance of them having the security of their own home, and I agree with that.

This subject is close to my heart. Although it is not my particular brief, I am pleased to be here today. I was the lead member for children’s services in Stockton. I very much enjoyed the time I spent with care leavers, even if I was left wondering how as a corporate parent I could do more for the likes of them, bearing in mind that they would be cast out into the wider world much younger than my own two sons, John and Andrew, who opted to leave home in their mid-20s. John and Andrew returned home, and I am always pleased to see them, but that is not an option for care leavers.

The situation that stuck out the most for me in recent years was not a young person from Stockton—it was when I met a young woman during a visit by the then Education Select Committee to deepest Kent. She was a care leaver and told of being all but abandoned in her room at a hostel and having to regularly put up with men braying at her door asking her to party with them. She was frightened. She felt at a loss as to what to do next, and she lacked the necessary support to get on with her life. As MPs, we are not formally corporate parents, but that does not mean we cannot recognise that, even though care leavers at 18 may be legally adults, there are many ways in which they need much more support than an average 18-year-old, who most likely has the support of a family. We can play our part in giving them that. We can start with the opportunity to move into high-quality training and employment opportunities—something we want for our own children and grandchildren. The rates of young people not in education, employment or training are too high, with care leavers almost three times less likely to be in education, employment or training at the age of 19. That figure can no doubt be associated with an often unstable journey through the care system. Other Members have described that.

Progress has been made over the past 20 years, and that is worth reflecting on. The Labour Government took the Children (Leaving Care) Act 2000 through Parliament, which created the role of the personal adviser. While it is fair to say that the provision is not perfect—local authorities still struggle to maintain this level of service with shrinking budgets—in its day it was a real innovation. In 2009, the Labour Government introduced a requirement for all care leavers at university to receive a £2,000 bursary from their local authority.

It is not just Labour that has improved provision. In 2014, the coalition Government created the role of the virtual school head, whose job it is to promote the educational achievement of looked-after children in each area. I welcomed that. It was something we had been doing in Stockton. I welcomed the decision by the last Government to extend the provision of local authority support from 21 to 25 through the Children and Social Work Act 2017.

My own borough council, Stockton, has an excellent reputation for delivering for vulnerable people. It has removed the requirement for care leavers to pay council tax for a period of time while they are adjusting to their new independent life. Others have followed suit, and I wonder whether the Minister could encourage more to do likewise.

We all owe a debt of gratitude to the Children’s Society. Members have spoken about it and other organisations, such as Barnardo’s, and thanked them for their work with care leavers and the briefings and statistics they provide us all with. Statistics have been in evidence in the debate. We know that 40% of care leavers aged 19 to 21 are not in education, employment or training, compared with 14% of all other 19 to 21-year-olds. Outcomes under the Work programme for care leavers were significantly worse than for others. They were around half as likely to spend the minimum amount of time doing work experience within a 12-month period than peers aged 18 to 24 claiming jobseeker’s allowance.

The Department for Work and Pensions could do a lot more to improve the way the social security system works for care leavers. That cohort is five times more likely to face benefit sanctions than their peer group. The system of personal advisers introduced by Labour was a positive step, but the Children’s Society has highlighted that there is often a lack of co-ordination between personal advisers and work coaches. It has called for early warnings to be used when considering a sanction for a care leaver and for no sanction to be imposed without the personal adviser being notified. Will the Government look at that, and innovative schemes such as the one in Trafford, where there is a protocol between the DWP and the local council that allows for two-way communication between a care leaver’s personal adviser and work coach on their claim?

The Children’s Society also argues that sanctions should be at a lower rate, as for 16 and 17-year-olds, and be for no more than four weeks. What is the Minister’s view on that? Another idea is that the DWP could send reminders of jobcentre appointments to young people by text or WhatsApp. The NHS does that already because of the cost of missed appointments. Care leavers do not have parents to prompt them to attend, so that might be something they could benefit from in particular.

For many who have recently left care, and those about to do so, their first experience of applying for benefits will be with universal credit. If the Government do not do something to help, they could face the same severe negative impact that universal credit is having on people and their wellbeing. In August 2017, the Children’s Society report on care leavers and the benefits system highlighted that the DWP introduced a marker to identify care leavers on the labour market system used by DWP staff to ensure that they received more tailored support. My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) spoke about that. There does not appear to be any such marker for universal credit, so will the Minister tell us what plans there are to change that?

Universal credit has also had implications for 18 to 21-year-old care leavers who are subject to the youth obligation, which effectively means increased conditionality compared with legacy benefits. They receive intensive work-focused support from the start of their claim. That may be positive, as it is not a good thing for young people to start their adult life with a prolonged period of unemployment. However, care leavers may face more challenges at that stage in their lives than the vast majority of their peers, so will the Government look at how they can pause that intensive search for work if the young person needs more time to attend to the other issues in their lives?

Under universal credit, the leaving care team cannot begin to set up the claim until the young person has turned 18, so payment will not be received for at least five to six weeks. This afternoon in the main Chamber we have been talking about universal credit, and Conservative Members themselves were saying that the period needed to be much shorter. The Minister could help to support local authority leaving care teams carrying out the administrative work to set up a claim four to six weeks before the young person leaves care, so that they will receive payment without delay. Will the DWP also provide more training for jobcentre staff to support care leavers, and work with local authorities to provide training for personal advisers so that they can understand universal credit better and make care leavers in their charge aware that alternative arrangements are possible?

In its briefing, the Children’s Society also highlighted that care leavers might lose up to £45 from housing benefit when they turn 22 as a result of the existing rules on the shared accommodation rate of local housing allowance. Other Members covered that in detail. Finding affordable housing is already a severe problem for young people, so it is important that the impediments are addressed. A Centrepoint survey found that 26% of care leavers have sofa-surfed and 14% have slept rough. Stability in housing has to be one of the most fundamental needs in ensuring stability in people’s lives.

The cross-departmental leaving care strategy stated that the Government would look into extending the age at which young people switch from the single bedroom rate of local housing allowance to the shared accommodation rate when living in private rented accommodation, which is a reality for many, given the shortage of social rented properties. Local housing allowance rates have been frozen until 2020, so a delay to the age at which care leavers begin to receive the shared accommodation rate—which can be £30 less per week—is particularly urgent. That move to a lower rate of support does not occur in a vacuum. It happens at a time when young people are only entitled to a lower rate national living wage, and at an age when their entitlement under universal credit is noticeably lower. That cut in monthly housing support eats into already stretched budgets, putting tenancies at risk and causing stress and anxiety.

Can the Minister share with us her assessment of the case for delaying the cut in the move to the shared accommodation rate from 22 to 25? I also ask her how the DWP could ensure that care leavers get the meaningful financial education they need. Many of us want it to be universal for all young people, but I would suggest that care leavers could do with a bit of extra help to ensure that they do not get into debt. If they do get into debt, they need even more robust support. I would be interested in her view on the breathing space being proposed in the Financial Guidance and Claims Bill for care leavers. That would halt creditors imposing interest charges and extra fees, which only worsen the debt.

I hope, and am sure, that the Government will listen to all the points made today, and act to show that we are all on the side of care leavers and want them to realise their full potential. I just hope that the Minister, like every individual who has spoken this afternoon, will become that real champion for care leavers.

[The Parliamentary Under-Secretary of State for Work and Pensions (Caroline Dinenage)]

It is a pleasure, as ever, to serve under your chairmanship, Mrs Gillan. I, too, thank my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) and congratulate him on securing this important debate on the support given by the Department for Work and Pensions to care leavers. I also thank hon. Members across the House for their valuable input to this important discussion. They have raised a number of really important issues on how the Government and, indeed, my Department support care leavers. I am very pleased to have the opportunity to address all—or at least most of—the questions that have been raised, and to set out some of the actions that we are taking.

Let me start by reassuring my hon. Friend, and indeed all Members, that the Government are committed to improving the lives of, and outcomes for, care leavers. We recognise that care leavers are among the most vulnerable groups of young people. We of course understand that sadly many were taken into care because of neglect or abuse as children. We understand that as they leave care, they often have to make the transition to adulthood and independent living at a younger age than their peers, and usually without the support of a family network, as other Members have said.

The exceptionally difficult challenges that care leavers face mean that their educational, health and employment outcomes can be significantly worse than those of their peers. That is why we introduced the first ever cross-government care-leaver strategy in 2013, and updated that strategy in 2016. The strategy sets out the steps that the Government are taking—from housing to health services; from the justice system to educational institutions; and from financial support to work—to support care leavers to live happy, healthy and independent lives. The Department for Work and Pensions was proud to play a full and active role in supporting the Department for Education in developing that strategy. In the time available today, Members will forgive me if I focus as specifically as I can on the actions that the Department for Work and Pensions has taken, but it is important to remember, of course, that they are part of a cross-Government approach, which needs to be joined up as far as possible.

My Department has put in place a comprehensive package of support and protections for care leavers who need to claim benefits to make the transition from local authority care to independent living. That support ensures that they are offered the help that they need to take that important step, including the necessary assistance to find employment. That is where universal credit is an enormous benefit. The new work coach model means that each claimant stays with the same work coach throughout their claim, giving continuity of support for claimants. It also means that work coaches are able to identify very early a claim by someone who has complex needs—someone who may require individualised, tailored support. That, of course, includes care leavers.

A couple of hon. Friends and hon. Members mentioned that very important data collection exercise. My Department is working very hard to try to collect better data on claimants with complex needs, including care leavers. Information that someone is a care leaver is held on the claimant profile as part of the universal credit system. We are at the very early stages of the process, and we are still working through what data is being collected and what the data is telling us. We will, of course, keep a very close eye on that, and see if further markers are needed. That is why we have built into the universal credit system a pause-and-learn approach, which means that we can incorporate the benefits of our learning as we go. The Department for Education continues to publish valuable care leaver outcome data for 17 to 21-year-old care leavers. A data-share agreement is in place between Her Majesty’s Revenue and Customs, Department for Work and Pensions, and the Department for Business, Energy and Industrial Strategy to explore the link between educational achievement and labour-market outcomes. They will also explore the quality of outcome information that the data-sharing provides for specific groups, such as care leavers.

In universal credit, work coaches can tailor interventions to the needs of the individual, and the support that they can offer is incredibly wide-ranging. It can address a variety of barriers to work, and might include improving job-search skills, referral to skills and other work-related training, and other types of support. The work-related training can include traineeships, apprenticeship places, and work experience. I will speak a little more about apprenticeship places later on.

Jobcentre Plus districts work closely with their local authority care leaving teams to put in place protocols and processes to support care leavers who need to claim benefits. There are some great examples across the country of effective working protocols between job centres and local leaving care teams. Barnet care leaver hub, for example, involves a Jobcentre Plus work coach, co-located in the local authority leaving care premises with the Drive Forward foundation, the care leaver charity that delivers intensive one-to-one work support. Jobcentre Plus partnership managers are working with their local authority leaving care teams to facilitate contracts and joint working protocols. We are working with the Department for Education to encourage local authority leaving care teams to contact Jobcentre Plus.

A key element of that is the facility to prepare a claim in advance of the claimant’s 18th birthday. With the support of their local authority leaving care adviser or a Jobcentre Plus work coach, a care leaver can begin preparing to make that benefit claim four weeks before their 18th birthday. That ensures that all the identification and evidence checks are completed before they leave care and prevents any unnecessary delays in benefit payments. It also provides the opportunity to arrange advances and to direct rent payments to landlords where appropriate.

[Alex Cunningham]

The Minister is describing lots of good practice, but I wonder how we can get to the stage where a young person can be asked at their first point of contact with the DWP whether they are a care leaver, so that identification can follow them through the system?

[Caroline Dinenage]

That is something that we have discussed at length, and we are looking in detail to see whether that proposal could be incorporated. I would like to reassure my hon. Friend the Member for Brentwood and Ongar and other hon. Members across the House that we have worked hard, and are continuing to work hard, to ensure that universal credit works and is beneficial, not only for the majority of straightforward cases but for care leavers and those with complex needs too. That is why we have introduced a series of measures aimed at safeguarding and supporting care leavers.

I would like to go through a few examples, which people may or may not be aware of. We have exempted care leavers from waiting days in universal credit. Those who are under the age of 22 do not serve the seven waiting days and are entitled to universal credit from the very first day that they make their claim.

We have introduced the second chance learning initiative to enable care leavers up to the age of 22 to catch up on the education they may have missed out on when they were younger. That means income support or universal credit are available to care leavers who take up full-time study in non-advanced education. We have exempted care leavers from the removal of automatic housing support for 18 to 21-year-olds in universal credit.

The hon. Member for Stockton North (Alex Cunningham) talked about exempting care leavers from council tax. The Government have given councils the flexibility to support vulnerable groups, including care leavers, to manage their council tax bills. The Department for Communities and Local Government wrote to all councils in 2016 to remind them of the powers they have under the Local Government Finance Act 1992 to support vulnerable groups. A number of councils have already taken the decision to support care leavers through an exemption or discount in their council tax bills, as I think he said his local council was doing.

--- Later in debate ---

[Caroline Dinenage]

The hon. Gentleman represents Birmingham beautifully—Selly Oak and also other parts of Birmingham, as we have learned today. He makes a good point.

[Alex Cunningham]

He has broad shoulders.

[Caroline Dinenage]

He is clearly very talented. We would be very happy to do that, and I pay tribute to him for his work as chair of the all-party parliamentary group for looked after children and care leavers. I would like very much to accept his offer to come and join that APPG for at least one of its meetings.

--- Later in debate ---

[Caroline Dinenage]

I am grateful to the right hon. Gentleman for drawing attention to my former colleague, Edward Timpson, who was a most fantastic Minister in the Department for Education and a great advocate for care leavers. We are supporting the Staying Put arrangements that the right hon. Gentleman alluded to, which mean that care leavers who remain with their ex-foster carer can claim means-tested benefit from their 18th birthday up to the age of 21, but I will look at everything he has said.

In addition, we have exempted care leavers from the shared accommodation rate until they are 22. The shared accommodation rate is normally paid to single people aged under 35. That means that care leavers can claim the higher local housing allowance one-bedroom rate of housing benefit until their 22nd birthday.

I have listened to the arguments made by hon. Members about the issue today. I particularly welcome the comments of my hon. Friend the Member for Colchester (Will Quince); he gave an eloquent description. I also thank him for the significant contribution he has made as chair of the all-party parliamentary group on homelessness, where he does a sterling and very valuable job.

We have always said that this is something we would like to achieve, but at the moment we do not have plans to extend the exemption for care leavers from the shared accommodation rate to age 25. I assure my hon. Friend and other Members who have raised the issue today that we will continue to keep it under review and will consider evidence from stakeholders on the impact that the shared accommodation rate has on care leavers.

We have given care leavers priority access to personal budgeting support in universal credit. That includes benefit advances, rent paid direct to landlords, payments more frequent than monthly and budgeting advice, including debt advice, which was raised by the hon. Member for Stockton North.

We have a fantastic “See Potential” campaign—I say fantastic as it falls under my ministerial portfolio. It encourages employers to recognise the benefits of recruiting people from all kinds of backgrounds, including care leavers. I was so pleased to celebrate the inspiring workplace and training achievements of young people, including care leavers and others, at the Land Securities Community Employment Awards recently—we saw the incredible growth, development and achievement of some very inspiring young people.

I am pleased that the Government are leading by example by setting up a cross-Government scheme to provide employment to care leavers. My Department’s own care leaver team includes a quite brilliant care leaver intern, who I have had the pleasure of meeting, and who is providing us with very valuable insights into issues that care leavers face and helping us improve our services for care leavers. She is very cool as well—she is in the room, which is why I am saying that!

In developing our support for care leavers, we have worked closely with stakeholders. I am particularly grateful for the input from the Children’s Society, representatives of which I met shortly after being appointed to the Department. When I met with them, I was made aware of the fact that in some cases care leavers have difficulty taking up apprenticeships and a number of hon. Members have raised that today. We know that without the support of a family, they struggle economically. Having had that meeting, I hotfooted it straight over to the Department for Education and met the Minister for Apprenticeships and Skills to discuss the idea of an apprenticeship bursary, which would ensure that apprenticeships were an affordable option for care leavers, who do not have the family support that most apprentices can rely on.

The Department for Education are reviewing how the new apprenticeship funding approach is supporting all those who are disadvantaged, including care leavers, with the intention of improving how the system supports those individuals from 18 to 19, so that apprenticeships offer a more attractive opportunity to them and a greater chance of success. It has agreed to explore the proposal for an apprenticeship bursary.

The debate has raised some really important issues, and I am grateful to all right hon. and hon. Members for the points they have made, which will continue to inform our work to support care leavers, alongside our discussions with our valuable stakeholders.

[Alex Cunningham]

Just before the Minister sits down, there were two further points raised during the debate—first, the imposition of sanctions at a lower rate and, secondly, the opportunity to develop a way in which local authorities can work with care leavers applying for universal credit ahead of reaching their 18th birthday.

[Caroline Dinenage]

The hon. Gentleman is right to remind me about the sanctions—I pulled that little bit of paper out, but had forgotten to pick it up—but I think that I covered applications in advance of the 18th birthday earlier in my speech.

With regard to sanctions, I would like to stress that the Department for Work and Pensions recognises the unique set of circumstances faced by care leavers. Therefore, we allow care leavers to apply for hardship payments of 60% of their normal benefit payment from day one of the sanctions. Sanctions are used in a very small minority of cases, when people fail to meet each of the requirements that they agreed in their claimant commitment without good reason. That said, conditionality and sanctions are part of a fair and effective system that supports and encourages claimants to move into work, towards work or to improve their earnings. Work coaches are very well trained to deal with vulnerable claimants, and have the flexibility to tailor the requirements according to each individual’s circumstances, and that includes the needs of care leavers.

We do not impose sanctions lightly. Claimants are given every opportunity to explain why they failed to meet their agreed conditionality requirements before a decision is made. A well-established system of hardship payments is available as a safeguard if a claimant demonstrates that they cannot meet their immediate and most essential needs, including accommodation, heating, food and hygiene, as a result of their sanction. UC claimants are able to apply for a hardship payment from the first accounting period in which the sanction reduction is applied.

I have spoken to care leavers, and we do not do them any favours by insulating them from the challenges of the day-to-day reality and responsibilities that their peers face. The care leavers I have spoken to tell me that they do not want to be wrapped in cotton wool. They want a little extra support and help, but they do not want to be entirely insulated from the challenges and responsibilities that their peers face.

I am pleased to have been able to put on the record our commitment to supporting care leavers and the action we are taking, but I hope I have made it clear that we are not complacent. I am passionate about improving the lives of care leavers. We are determined to ensure that the welfare system in general and universal credit in particular help care leavers make a successful transition to independent living and working life, and that we support them as best as we can.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 13th November 2017 Commons Chamber

[Guy Opperman]

I am grateful to my hon. Friend for his question. The proposal whereby women would receive early pensions would create a new inequality between men and women, the legality of which is highly questionable.

[Alex Cunningham (Stockton North) (Lab)]

The Government seem to be under the misapprehension that the campaign by the wronged ’50s-born women will eventually go away if they just keep ignoring it. They even told the Table Office that they would not answer a question on the subject from my hon. Friend the Member for Stockton South (Dr Williams). It will not go away, however, so why does the Minister not engage with the campaigners to find a solution, and in the meantime support our proposals to extend pension credit to the most financially vulnerable and give them all the opportunity to retire up to two years earlier?

[Guy Opperman]

The hon. Gentleman will be aware that the Government have already introduced transitional arrangements costing £1.1 billion in 2011, which mean that no woman will see her pension age change by more than 18 months relative to the 1995 Act timetable.

--- Later in debate ---

[The Minister for Disabled People, Health and Work (Sarah Newton)]

I thank my hon. Friend for that very important question. The length of an award is based on an individual’s circumstances: it can vary from an award of nine months to an ongoing award involving a light-touch review at the 10-year point. It is very unlikely that somebody he describes would have another face-to face assessment with a healthcare professional.

[Alex Cunningham (Stockton North) (Lab)]

We all know that the Government are bogged down in all manner of ways and that they have been slow to develop secondary legislation for several new Acts, but will Ministers tell the House when they will bring forward regulations to enact defined contribution and give pension savers the opportunity of the vastly increased benefits of those schemes that was predicted this week by the Pensions Policy Institute and Schroders?

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Those matters are being considered and will be addressed in the new year.

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 9th October 2017 Commons Chamber

[Guy Opperman]

Those who seek to make the case for such a law would need to satisfy themselves that men would not bring a case against the proposers, because it would unquestionably create a new inequality between men and women.

[Alex Cunningham (Stockton North) (Lab)]

The ombudsman’s first rulings on whether the Government are guilty of maladministration for failing to give 50s-born women sufficient notice of their earlier retirement age are due soon. Maladministration or not—it will take years to resolve that matter—can I ask the new Minister to take this back, think again, tell us what he is prepared to do, and what research he is prepared to do, to alleviate their misery, and perhaps even consider our proposals on pension credit and allowing them to retire up to two years earlier?

[Guy Opperman]

The Government strongly believe that there has been no maladministration by the Department for Work and Pensions, including during the 13 years when Labour was in charge of the Department.

State Pension Age for Women

Alex Cunningham Excerpts

Wednesday 5th July 2017 Westminster Hall

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I thank my hon. Friend and north-east England colleague the Member for Easington (Grahame Morris) for securing the debate, and I thank everybody who has contributed this afternoon. Speaking of north-east colleagues, I also congratulate the hon. Member for Hexham (Guy Opperman) on his promotion to Pensions Minister—it appears his jockeying for position in the political world has finally paid off. I was pleased to have a good—even friendly—working relationship with his predecessor, the hon. Member for Watford (Richard Harrington), and hope for the same with him.

We can start that right here with a friendly offer from the Opposition to work together across the House to deliver much fairer transitional arrangements for the much-wronged 1950s-born women, who saw their pension age accelerated by several years with little or no notice. The Minister is in a strong position to deliver change. All of us on the Opposition side, including the Government’s allies in the DUP, back the ’50s-born women’s cause. My hon. Friend the Member for Easington spoke of the 20 Conservative and DUP Members who have signed the WASPI pledge, but it gets even better. There are 37 MPs on the Government Benches who have supported the WASPI campaign either through membership of the all-party parliamentary group or through election pledges; others have done so today. That is enough to provide a majority in the House of those who want to see action taken to alleviate the difficulty faced by the most vulnerable women, now in their 60s. I am sure that each and every one of those Members will want to report back to their constituents that they have fulfilled their promises. It is quite a list, and I would love to share it with the Minister if he wants it.

I have spoken for the official Opposition on ’50s-born women more than half a dozen times since I accepted my role nine months ago, with other parties throwing their weight behind some form of support for the women who have been affected by these changes. Still—perhaps just until today—the Government have stuck their collective head in the sand. Yes, we now have a new Secretary of State and a new Pensions Minister—and, as has already been said, even a new Parliamentary Private Secretary, the hon. Member for North Devon (Peter Heaton-Jones), who is a declared WASPI supporter, having signed one of WASPI’s pledges to

“do all he can to work for a solution if elected”.

He could not be better placed to influence change for the better. Perhaps now the Government will take positive action and introduce new measures to reduce the strain on the most vulnerable women and men who have been affected by these increases in the state pension age.

I have heard from numerous women affected by the changes, and heard stories of their desperation and fear about how they will cope now that they have to wait even longer for their state pension. Does the new Minister understand how difficult it is for a woman in her 60s to retrain and gain employment? The job market and skills needed in today’s workplace are a different world from that of 40 years ago. What we have is a system that does not help older people retrain and get back into meaningful employment, a welfare system being torn to pieces, disabled people being humiliated through repetitive assessments, and now a state pension that is becoming increasingly difficult to access. Once again it is Labour, and others, who are standing up for the vulnerable. It is Labour calling out the injustice that ordinary people face, and Labour is the loudest voice demanding action. I know what the Conservatives are doing: they are trying to ignore the issue in the hope that the years will pass, the number of women affected by this measure will drop, and they will get away with leaving older people to struggle for many years to come.

We heard during the election that there is not a magic money tree—others have referred to that—but whenever the Government need funds to support their aims, they find it. There is no magic money tree, but they found that £1 billion to which others have referred to secure that deal with the DUP, to keep Theresa May in No. 10. That is just the up-front cost. The DUP will be back for more and Northern Ireland will get the priority investment that areas in the rest of the country also desperately need. I would never recommend selling out to the Tories, as the Lib Dems did in 2010, but I can understand our 10 DUP colleagues, striving to do the best for their communities with their £1 billion deal. I am sure many other MPs have wondered what they could do to help their constituency if they had their own £100 million magic money tree. It should not be about one versus the other. We must make investment where it is needed and protect the most vulnerable. Just as communities in Northern Ireland and elsewhere need a lifeline, so do ’50s-born women, many of whom are destitute.

The Labour party laid out its approach to reducing the strain on vulnerable and struggling women, which is to extend pension credit to those who were due to retire before the pension increase. That would alleviate the toughest circumstances and restore the faith and dignity that many feel they have lost. Extending pension credit would provide support worth up to £155 a week to half a million of the most vulnerable women who have been affected by the increase in the state pension age. We are continuing to look at other ways to ensure that those who need support receive it, but we need the Government to get on board and work with us. If the Minister would like a conversation about how we can deliver a cross-party approach to secure fair transitional arrangements to the most vulnerable ’50s-born women, I will be pleased to meet him. The general election result delivered a verdict that the Conservatives no longer have the full confidence of the country to govern. That strengthens the case for a joint approach in this case.

I have a number of questions for the Minister. Has he had any discussions with the new Secretary of State about the plight of ’50s-born women? Do they accept that many women had little if any notice of the change in their pension age, and that those women ought to be recompensed in some way? Will he and the Secretary of State agree at least to a review and then change their policy, offering at least the most vulnerable women something to get by on? That is what it is about—getting by.

Previous DWP Ministers wanted to help these women, but they had the Treasury doors slammed shut in their faces. In these very different days of unstable Government, I hope the Minister will now be able to assure the House—including those 37 Members of his party—that he takes this matter seriously and that he will work with us and others to deliver a fair and meaningful solution to this problem and, above all, win some friends and make himself the Government champion for these very wronged women.

Housing and Social Security

Alex Cunningham Excerpts

Thursday 22nd June 2017 Commons Chamber

[The Secretary of State for Work and Pensions (Mr David Gauke)]

It is a great pleasure to conclude this day’s debate on the Gracious Speech. I thank all hon. Members from all parties who have contributed. Members from all parts of the United Kingdom have covered a wide range of subjects and it has been a very good and insightful debate.

I will not respond to every Member who has spoken, but I will respond particularly to those who made their maiden speeches, beginning with the hon. Member for Kensington (Emma Dent Coad). It is difficult to imagine that there has ever been a Member of Parliament who has faced such a daunting challenge in their constituency in their first few days in office, and she has conducted herself with great sensitivity and energy. She made a very moving speech earlier today in which she spoke of her constituency generally, but she particularly and rightly focused on Grenfell Tower, the families she has met and the tales of the desperate situations that her constituents have faced. I congratulate her on the way she spoke and the way she has conducted herself as a Member of Parliament.

I congratulate my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on an excellent maiden speech. He spoke powerfully about his constituency and his particular constituency focuses, and showed his depth of knowledge of the borderlands. I also noted that he managed to deliver a perfectly timed speech, which is an attribute that I am sure will attract the attention of the Whips. I suspect he will be much in demand in future months.

I also congratulate my hon. Friend the Member for Aldershot (Leo Docherty), who spoke of his town and told us much about its history. As a former soldier, he has an appropriate background for an Aldershot Member of Parliament. He paid tribute to his predecessor, Gerald Howarth, who was a good friend to many of us here. On that note, I also congratulate the hon. Member for Enfield, Southgate (Bambos Charalambous), who spoke about the tolerance and diversity in London and within his constituency, and about his own family’s story. He also paid generous tribute to David Burrowes, with whom I shared an office for five years and who is a good friend. I welcome the opportunity to wish him well, as the hon. Gentleman did.

I also congratulate my hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke) on an excellent speech. He spoke warmly of all of his many predecessors and demonstrated a great love of Teesside and a desire to represent it as the first Conservative MP for his constituency for some time.

They did not give maiden speeches, but I welcome back to the House the hon. Member for Eastbourne (Stephen Lloyd), with whom I suspect I will debate on many occasions, and my hon. Friend the Member for Richmond Park (Zac Goldsmith). I also thank the shadow Work and Pensions Secretary for her welcome to me in my new position. I congratulate her on her reappointment. Today may mark one of our friendlier debates, but I hope that we can have a constructive working relationship in the period ahead.

I referred to the maiden speech of the hon. Member for Kensington. Clearly, Grenfell Tower has cast a large shadow over our debate. There have been several excellent contributions, particularly that of the hon. Member for Westminster North (Ms Buck), who previously represented that part of London. It is a terrible tragedy and all our thoughts are with those affected and the families who are grieving.

Our priority is to ensure that the people affected by the fire get the financial help they need. We have staff on the ground who are handling people’s benefits claims sensitively and flexibly. For example, they are ensuring that payments continue if appointments are missed and that jobseeking requirements are suspended for as long as needed. The Department for Work and Pensions has also made sure that people’s benefits will not be affected by payments from the discretionary fund. The local authority has assigned key workers to affected households to ensure that they have continuity of support—wraparound support—and we are working closely with them to provide benefit advice and support.

Money is available from the £5 billion discretionary fund to meet funeral costs. The Department for Work and Pensions administers funeral expenses payments and the local authority also has funds to support people who cannot afford funeral costs. It is important that all parts of government work together to provide the necessary support for the people of Grenfell Tower and the surrounding areas.

The debate on Grenfell Tower has also shone a light on the wider issue of housing. My right hon. Friend the Secretary of State for Communities and Local Government set out the Government’s position. It is worth reminding the House that we have a proud record since 2010. We have overseen the building of nearly 1 million new homes and helped around 400,000 households to get on the property ladder through Help to Buy. However, with housing becoming increasingly unaffordable, there is much more to do. My hon. Friend the Member for Hertsmere (Oliver Dowden) made that point. We have set out our strategy in the housing White Paper and we are introducing a Bill to ban unfair tenant fees.

We will drive that forward by investing £7.1 billion through the affordable homes programme, implementing the Homelessness Reduction Act 2017 and continuing to support the regeneration of housing estates. We have not built enough homes in this country for generations. We need to build more of the right homes in the right places and ensure that the housing market works for all parts of our community.

Let me deal with some of the welfare issues that have been raised in the debate. Our welfare reforms are restoring fairness and supporting people into work. Having a welfare system that offers work for those who can, help for those who could and care for those who cannot is part of our plan to build a fair society for all. The Government have improved the chances of finding employment and we will continue to build on that achievement.

The employment rate stands at a joint record high of 74.8% while the employment rate for women is at a joint record high of 70.2%.

[Alex Cunningham (Stockton North) (Lab)]

It is all zero-hours contracts.

[Mr Gauke]

There is a sedentary comment that it is all zero-hours contracts. The employment numbers that came out last week are striking because the increase was overwhelmingly a consequence of full-time employment. We must bear in mind that those on zero-hours contracts constitute, what, 3%? [Interruption.] Less than 3%: 2.8% of the overall workforce. The majority of those people, when surveyed, say that that is what suits them. Moreover, the average number of hours worked by people on zero-hours contracts is 25. Let us not mischaracterise the nature of our labour market.

Let me now deal with universal credit, a landmark reform of the welfare system that will maximise people’s chances of getting work, staying in work, and progressing into better-paid work. Universal credit is working. People move into work faster, and there are encouraging signs in that connection. The roll-out of universal credit continues to deliver to plan. It is being rolled out in a gradual, safe and secure way to ensure a successful delivery and the best service for claimants. The programme has recently passed an important milestone, with well over a million claims made and the number of claimants higher than the number of people claiming jobseeker’s allowance.

State Pensions: UK Expatriates

Alex Cunningham Excerpts

Thursday 20th April 2017 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

I thank the Backbench Business Committee for granting the debate and congratulate the hon. Members for North Thanet (Sir Roger Gale) and for Ross, Skye and Lochaber (Ian Blackford) on securing it, and I thank all Members who have contributed.

I have spoken many times in this Chamber and in Committee about the injustice within our pensions system. On numerous occasions, I have highlighted how the Government have let down the WASPI women and vulnerable pensioners more widely in society. Today it is overseas pensioners. The upcoming general election gives us an opportunity further to highlight such issues and the need for greater transparency in the pensions industry. I hope that those issues, and the issue of pensions uprating for overseas pensioners, get plenty of attention over the next seven weeks.

Today, all pensioners, at home and abroad, want to know whether the Government will ditch the triple lock on 3 May, in line with the Secretary of State’s answer to me on 9 January, when I confirmed that Labour’s commitment was for the longer term. Will the Minister confirm that the Tory triple lock is at an end, or is the commitment to 2020, as declared by the Secretary of State in November on “Peston on Sunday”, and as was suggested to be the case by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier)?

The pensions of those living overseas are a hot topic for hundreds of thousands of people, many of whom have seen their British state pension frozen—in some cases, for decades. Like the hon. Member for Leeds North West (Greg Mulholland), I will not be writing a manifesto, but while he cannot guarantee that partial uplifting will be in the Lib Dem manifesto, it will certainly be in the Labour party’s.

As the law stands, there are 551,000 UK pensioners living abroad, in countries such as Australia and Canada, who have had their pensions frozen at well below the level paid to pensioners still living in the UK, according to the International Consortium of British Pensioners. While UK pensioners receive up to £155.65 a week, a person who retired in 2000 and moved to either Canada, India, Australia or one of hundreds of other countries receives just £67.50.That does not grow with inflation; in fact, it does not grow at all, leading to a continuous reduction in real-terms income, a loss of independence and, eventually, poverty for hundreds of thousands of pensioners across the globe. As we have heard from their champion, the hon. Member for North Thanet, all these people contributed tax and national insurance to the UK throughout their working life, and they are now penalised because they choose to live in a different country, perhaps to spend their retirement closer to their families.

Without uprating, recipients reliant on their state pension income could find themselves increasingly impoverished, leaving them unable to afford a basic standard of living and increasingly dependent on relatives, and they may be forced to return to the UK—we have heard many examples of that during the debate. Surely it is time that this country established a fair system to support our pensioners regardless of where they choose to live. Those who have spent their life working to contribute to the national economy should be supported in the manner they deserve.

Over recent decades, it has become increasingly clear that we live in a globalised world—a world that sometimes requires people of all ages to move across borders to Europe, the US or Canada, or sometimes further afield. As we look to our new future out of the European Community, but working in a more comprehensive partnership with the wider world, I ask the Pensions Minister to do what other Ministers, Labour and Tory alike, have failed to do, and start increasing overseas pensions now.

Why, in this globalised world, should the country in which a person retires—by choice or for other reasons—affect the pension they have worked hard to earn for 45 years or more? Why should the country a person collects their pension in affect their standard of living? Why should it affect their ability to enjoy their retirement and buy the essentials in life? That does not sound like a fair system; it sounds like a system that leaves hundreds of thousands of pensioners uncertain about their future, their financial position and, ultimately, their wellbeing.

There are those who argue that overseas pensioners spend their cash in economies other than ours, that they no longer pay tax here—if they have the income to do it—and that they make no contribution to our society. However, some may remind us that our overseas pensioners do not access our national health service, and nor do they require support from social care and other services. As has been said, for the relatively small cost of £30 million this year, the UK could begin a system of partial uprating for pensioners living overseas. For 2018, that would cost £30.75 million, and the figure would continue to increase at roughly the level of inflation.

This is about not a costly backdating of pensions uprating, but a way to begin to rectify the injustice of the overseas pensions system. We should prove that we care about the wellbeing of UK pensioners abroad and care about the vulnerable in society. Our message to the Government should be that that should translate into a fair pensions system.

As others have said, the issue of overseas pensions is of even more pressing concern due to the recent invoking of article 50, with a lack of clear Government policy around much of the Brexit process. Many expats who have retired within the EU face an uncertain future, and I have heard nothing about the protection of British people’s pensions in EU countries once we have left.

In addition to people being left uncertain about their immigration status, health benefits and many other issues, the Government’s inability to commit to policy in Brexit negotiations has left 472,000 retired UK nationals living in the EU uncertain of what the future holds for them. We do not know whether a deal will be made to ensure that UK pensioners living in the EU receive the full pension they are entitled to. The Government will not tell us whether that is even on the cards. Perhaps the Minister can update the House today. Will British pensioners living in EU countries have their pensions protected after we leave? The right decision—to uprate overseas pensions now—would send the right signal to pensioners in the EU that the Government have a plan and that they will be protected.

The ambitions of the nearly 700 overseas pensioners who have emailed me directly go well beyond the proposal to start uprating pensions now. I recognise that restoring pensions to the levels of today would be a huge stretch for any Government, never mind one that has such a recent record of slashing everything from bereavement income to in-work benefits and of denying mentally ill people, among others, the personal independence payments they need, but we need to start somewhere.

We have always prided ourselves on being a caring country. We are one of the largest net providers of foreign aid in the world, and rightly so. We must, however, ask why we do not feel the need adequately support our pensioners who have retired abroad. An increasing number of modern countries uprate pensions to those living overseas in line with inflation, regardless of where those pensioners reside. Today, we must consider why the UK is not doing the same.

As a modern, compassionate nation, we must look to provide all our pensioners with enough financial support to allow them to enjoy their retirement, as they deserve. Labour has laid out its pledges to pensioners in the last few weeks—maintain the triple lock, compensate the WASPI women and preserve the universal winter fuel allowance and free bus passes. Will the Minster join us in our other pledge—to protect the pensions of people living overseas? It is just the right thing to do.

--- Later in debate ---

[Alex Cunningham]

Spend the money!

[Richard Harrington]

The hon. Gentleman rarely makes me speechless, but his plea from a sedentary position to spend the money has done so. Perhaps he thinks that I am already Chancellor of the Exchequer; it is nice of him to imply that.

--- Later in debate ---

[Sir Roger Gale]

I am grateful to all hon. Members on both sides of the House who have contributed to this debate, which will have been watched by many people around the world. We are proud to live in a country that has a reputation for fairness and non-discrimination. There is an injustice, and my hon. Friend the Minister knows that. To say that the situation has been widely publicised and that it has been the same for many years does not make it right. It has been wrong for many years, under successive Administrations. It will go on being wrong, and people like me and my colleagues will carry on until we get a resolution.

I understand that the Minister is not in a position to make a concession this afternoon, and I did not expect him to do so. I will ask him just one thing. When this debate was called, none of us had any idea that there was going to be a general election. To some extent, inevitably that has coloured some of the remarks made this afternoon. I have deliberately not pulled my punches, because that is not what I do. I just say this, in friendship, to the Minister. Will he please have a serious discussion with the Secretary of State for Work and Pensions—one of my Kent colleagues—about how we can put the matter into the Conservative party manifesto as an election pledge, so that we can resolve this issue on the very modest terms that we have proposed, into which great thought has been put? That would enable us, when we come back in June—I hope that we, at least, will be coming back—to put this issue to bed and allow half a million people living in retirement around the world to sleep more soundly.

Question put and agreed to.

Resolved,

That this House notes the detrimental effect that the Social Security Benefits Up-rating Regulations 2017 will have on the lives of many expatriate UK citizens living overseas with frozen pensions; and insists that the Government take the necessary steps to withdraw those Regulations.

[Alex Cunningham (Stockton North) (Lab)]

On a point of order, Madam Deputy Speaker. It would be helpful if the Pensions Minister remained in the Chamber. I am grateful to him for his kind words about our working relationship, and I agree that it has been constructive, even when we have disagreed. I hope that you or he can assist with the news given to my office today that the Department for Work and Pensions MP hotline is closing down at midnight tomorrow; staff claim that that is because of purdah coming into effect. That would have a hugely detrimental effect on MPs’ ability to do their job effectively. I am sure that the wheels have moved since I raised the matter with a Government Whip earlier this afternoon, but can you or the Minister confirm the date for purdah and whether hotlines for MPs should close tomorrow evening?

Oral Answers to Questions

Alex Cunningham Excerpts

Monday 27th March 2017 Commons Chamber

[Richard Harrington]

My hon. Friend and I have discussed the matter, and I am pleased that he has highlighted it. There has been consultation on the subject, and the Government will make an announcement ourselves and through the regulator very soon.

[Alex Cunningham (Stockton North) (Lab)]

The Government missed an opportunity this year to tackle a wide range of issues in the pensions industry, but they chose to ignore most of them, instead bringing forward the narrow Pension Schemes Bill. The Secretary of State then failed to further his own agenda by instructing his Ministers to resist any attempt to introduce transparency, member engagement and greater clarity on costs. Why does he choose to protect the industry instead of savers? What will the Government do to correct this failure and help us all to build trust in our pensions industry?

[Richard Harrington]

I thank the shadow Minister for voting for the Bill on Second Reading, and for his generally constructive approach to it. As the hon. Gentleman well knows, the transparency agenda is part of a much broader agenda, and the Government will make a proposal very soon.

--- Later in debate ---

[Richard Harrington]

There is a lot happening in pensions at the moment. The point the hon. Gentleman mentions in relation to the Chancellor of the Exchequer is something completely different, but there will be no change to the transitional arrangements at £1.1 billion.

[Alex Cunningham (Stockton North) (Lab)]

Labour will oppose the earlier increase in the state pension age and the end of the triple lock, recommended in last week’s Cridland report, but we welcome the statement from John Cridland that at least 10 years’ notice should be given of any age increase, so there is yet another chance for the Minister. Do the Government agree with Cridland? If they do, will the Minister now admit that they got it badly wrong with the WASPI women and at least back Labour’s proposals to extend pension tax credit?

[Richard Harrington]

As I said before, the Government will respond to the Cridland review by the end of May.

--- Later in debate ---

[Damian Green]

I have two points for the hon. Lady. First, the National Federation of ALMOs—social housing providers—calculates that some 75% of tenants are in arrears under the legacy benefits, so she is not right in her suggestion.

[Alex Cunningham (Stockton North) (Lab)]

Just 75%!

[Damian Green]

Yes, quite; this has been happening for a long time. The idea that universal credit causes housing arrears is just nonsense.

Secondly, the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) will know that my Department is working on a pathfinder arrangement with Newcastle City Council precisely to address the problems that may be there now and have been there for many, many years.

Pension Schemes Bill [Lords]

Alex Cunningham Excerpts

Wednesday 22nd March 2017 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 2—Member trustees—

“(1) By a date to be set by the Secretary of State in regulations, approved Master Trust Schemes must ensure that at least a third of the trustees of the scheme are Member Trustees.

(2) Member Trustees must be individuals who are—

(a) members of the Master Trust scheme; and

(b) not members of senior management of a company that is enrolled in the Master Trust scheme.

(3) Member Trustees must be appointed by a process in which—

(a) any member of the scheme who meets the condition in subsection (2) is to apply to be a Member Trustee,

(b) all the active members of the scheme, or an organisation which adequately represents the active members, are eligible to participate in the selection of the Member Trustees, and

(c) all the deferred members of the scheme, or an organisation which adequately represents the deferred members, are eligible to participate in the selection of the Member Trustees.

(4) Member Trustees should be given sufficient time off by their employer to fulfil their duties.

(5) For the purpose of this clause “senior management”, in relation to an organisation, means the persons who play significant roles in—

(a) the making of decisions about how the whole or a substantial part of its activities are to be managed or organised, or

(b) the actual managing or organising of the whole or a substantial part of those activities.”

This new clause requires Master Trusts to make provision for some form of member representation within Master Trusts.

New clause 3—Member representation and engagement—

“One year on from the registration of Master Trusts by the Pensions Regulator, the Government will fully review member trustee representation, member engagement and annual member meetings.”

This new clause requires the Government to set up a review into member representation and engagement within Master Trusts.

New clause 4—Requirement to hold an Annual Member Meeting—

“(1) The trustees of an authorised Master Trust scheme must hold an annual meeting open to all members of the scheme.

(2) The Master Trust must take all reasonable steps to make the meeting accessible to all members, this includes making arrangements for—

(a) scheme members to observe the meeting remotely, and

(b) scheme members to submit questions to trust members remotely.”

This new clause requires Master Trusts to hold an Annual Member Meeting, and sets out ways to ensure members are properly given the opportunity to be involved.

New clause 5—Excluded groups—

“(1) The Secretary of State must, before the end of the period of 12 months from the day on which this Act receives Royal Assent, establish a review of participation in Master Trust schemes.

(2) The review must consider what steps can be taken to increase the participation in Master Trust schemes by the following groups—

(a) carers,

(b) self-employed,

(c) workers with multiple employees, and

(d) workers with annual earnings below £10,000.

(3) One of the options considered by the review to improve participation must be changes to the terms of auto-enrolment.”

This new clause enshrines the requirement on the Government to do something specific for currently excluded groups.

New clause 6—Exit fees—

“(1) The Secretary of State may by regulations restrict or set limits to exit fees paid by members of a Master Trust scheme.

(2) For the purposes of section (1) “members” includes past and current, active and deferred members.”

This new clause makes provision for the Secretary of State to restrict exit fees paid by Master Trust schemes’ members.

New clause 7—Asset protection for unincorporated businesses—

“The Secretary of State must, by regulations, make provision to amend section 75 of the Pensions Act 1995 in order to protect unincorporated businesses who are at risk of losing their personal assets including their homes.”

New clause 8—Review of actuarial mechanisms for valuing pension scheme liabilities—

“Within six calendar months from the day on which this Act comes into force, the Secretary of State must conduct a review of the actuarial mechanisms used to value pension scheme liabilities under section 75 of the Pensions Act 1995.”

New clause 9—Non-associated multi-employer schemes: orphan debt—

“The Secretary of State must, by regulations, exclude from the calculation in section 75 of the Pensions Act 1995 the orphan debt in any non-associated multi-employer scheme.”

Amendment 5, in clause 8, page 5, line 41, after “scheme” insert “or scheme funder”.

The financial sustainability of the scheme funder must be taken into account when assessing a Master Trust scheme’s financial sustainability.

Amendment 6, in clause 11, page 8, line 1, leave out subsection (b) and insert—

“(b) either the only activities carried out by the body corporate or partnership are activities that relate directly to the Master Trust scheme, or if the body corporate or partnership carries out activities other than those defined as “restricted activities.””

This amendment allows for exceptions to the requirement that a scheme funder must only carry out activities directly relating to the Master Trust scheme for which it is a scheme funder.

Amendment 1, page 8, line 13, at end insert—

“( ) A minimum requirement of annual reporting of administration, fund management costs and transaction costs for each asset class, drawdown product and for active and passive asset management strategies.”

This amendment would introduce annual reporting and inclusion of transaction costs requirements for Master Trusts.

Amendment 7, in clause 10, page 7, line 23, at end insert—

“(6A) The Secretary of State may by regulations define “restricted activities” and these regulations must set out activities that a scheme funder cannot engage in to minimise risk of losses or liabilities which might deplete or divert its financial resources.”

This amendment makes provision for the Secretary of State to define “restricted activities” by regulation, including a list of specific activities restricted in order to minimise risk of loss by Master Trust scheme funders.

Amendment 2, in clause 22, page 16, line 28, after “employers” insert “and scheme members”.

This amendment ensures that scheme members are told of triggering events as well as employers.

Amendment 4, in clause 31, page 23, line 16, leave out paragraph (d).

This amendment removes the part that allows Master Trusts to halt making payments to pensioners in the event of a pause order.

Amendment 3, page 23, line 27, at end insert—

“(f) directive that employers will retain both their own and employee contributions pending resolution of the pause order.”

This amendment requires employers to hold onto employee and employer contributions during a pause order.

Amendment 8, page 23, line 27, at end insert—

“(f) a direction that further contributions or payments to be paid towards the scheme by or on behalf of any employers or members (or any specified employers or members) are collected and held in a separate fund until the conclusion of the pause order;”

This amendment provides the Pensions Regulator with an alternative to stopping payments to the schemes under subsection 5(b) of a pause order.

Amendment 9, page 23, line 39, at end insert—

“(7A) The Secretary of State may by regulations set conditions on the terms of a separate fund used for purposes under section 5(f).”

This amendment is consequential to amendment 8.

[Alex Cunningham]

Generally speaking, this is a good Bill, and it goes a long way to properly regulating master trusts and looking after the interests of the pension scheme members. Sadly, it does not address the WASPI issue, which we raised on Second Reading and in Committee, as it has been ruled out of scope of the Bill. However, I am pleased to report that Stockton Borough Council backed the WASPI women. Tory councillors abstained on the vote, so clearly they are not very happy with the Government either.

There are a number of aspects of the Bill that could still be improved and that could better protect and inform scheme members. Sadly, after the Commons Committee stage, it was clear that we had failed to convince the Government of that, but having reviewed the Minister’s arguments we still believe that a number of issues need to be covered on Report this afternoon.

New clause 1 returns to the issue of a funder of last resort for master trusts. Contrary to the written statement from the Under-Secretary of State for Pensions, which we received on Monday, the removal of this clause is significant, and I was surprised that he felt that it was not. This new clause looks to ensure that, in the event of a master trust failing, there is a funder of last resort— somebody in place who guarantees that scheme members are not left out of pocket through no fault of their own. This would, in effect, act as a final underpinning of the promises that have been made to scheme members, giving them recourse to a legally established funding organisation committed to making good on scheme member dues. When this was debated in Committee, the Minister refused to back this most sensible of additions to the regulations of the Bill, arguing that it would place an unnecessary additional burden, that the new regulatory regime was sufficient to make the risk of collapse absolutely minimal, that existing master trusts would pick up any scheme members affected by their master trust failing, and that the Government were consulting the industry on the creation of a panel of white knights, who would commit to stepping in to ensure that all scheme members are protected.

I am glad that we have the Minister on record saying that there is no chance of a master trust going bust under the regulatory regime that this Bill creates. It is clearly a gamble that he is willing to take. Opposition Members are not prepared to gamble with people’s pension savings. In order to best protect scheme members, we need the strongest possible regulatory environment in place. Unlike the Minister, we are not content to leave things to chance.

We have support from the industry itself for these proposals. For example, the chair of the Standard Life master trust has called on the Government to be the funder of last resort, because

“their policy foul-ups have allowed the proliferation of unsustainable Master Trusts.”

It is interesting that the Minister plans for a panel of white knights. Does that suggest that he does accept that there is a chance that a master trust might slip through his regulatory regime and leave scheme members unprotected? If he does, why not go the whole way and put the proper guarantees in the Bill? There is simply no guarantee that another trust will choose to pick up one that is failing. Why would it? What obligation does it have and why would it be in its interests to do so? Yes, there have been a few pragmatic actions in this area, but nothing is guaranteed.

We all know that the pensions industry and the financial services industry have seen plenty of failures. Perhaps the Minister can tell us what happens if a large master trust fails and the data are in a mess and take months to cleanse before getting members transferred to a new scheme. We cannot simply hope that another trust will just pick that up. Instead, we must intervene now to ensure a proper back-up plan. The Government must prepare for the worst-case scenario, and nothing I have seen so far convinces me that Ministers are doing so.

We need a funder of last resort because we must be able to predict what could happen, even if there is only the slightest chance of it happening, and ensure that we have a plan of protection in place. I ask again: why will the Minister not provide people all over this country with a 100% assurance that the Bill without this provision is enough to protect members. If he is to ignore our sensible new clause, he must guarantee that no master trust will be in a situation in which it has failed and has insufficient resources to meet costs. In the absence of greater clarity, it is essential that this new clause is in the Bill.

I now turn to new clause 2 and the issue of member-nominated trustees for master trusts. I remind the House that all the investment risk lies with the member and not the sponsor or the provider of the scheme, and they should therefore have representation at decision-making levels of the scheme. The Pensions Act 1995 introduced the requirement for company pension schemes to have member-nominated trustees. If the scheme’s sole trustee is a company, including the employer rather than individuals, scheme members will have the right to nominate directors of that company—member-nominated directors. The Pensions Act 2004 enshrined the right to have at least one third scheme member trustees of a trust-based scheme. The Pensions Regulator is clear that master trusts are covered by this legislation, which is why some already have member-nominated trustees. What the regulator offers in explanation is that there are exemptions that can be taken by master trust, giving the reasoning that having a pool of members greater than a single employer-based scheme poses problems of choice. We find that an inadequate reason for exemption. The greater the number of members, surely the bigger the pool of choice.

We do not agree that independent trustees can adequately represent the fiduciary interests of members if they have no stake in the investment process. What is more, they are paid and chosen by the master trust. This exemption seems like a convenient way of denying the right to representation by those who do have a material interest in the performance of the master trust. We have returned today with an amendment that seeks to give scheme members the law to which they should be automatically entitled. In these circumstances, my references to MNTs apply equally to MNDs.

The Association of Member Nominated Trustees is adamant that master trusts must be obliged to have member representation on their boards. However, it is no surprise that a master trust is lobbying against that. Such companies are mostly profit-making entities. However, it is in their own best interests that they have scheme member representation to win the confidence of the scheme members. The role of the MNT and the trustee boards is sometimes underplayed or undervalued. The Association of Member Nominated Trustees said:

“Members are particularly comforted by having an MNT presence for their scheme. It helps them to feel reassured their retirement interests are truly being met and understood most importantly, but also that they aren’t being ripped off in excessive costs and charges.”

They are the only ones who have no personal interest or gain; their only interests are those of the member. ShareAction also agrees that savers should be able to subject decisions made on their behalf to a healthy degree of scrutiny and challenge.

Ensuring effective governance for pension schemes remains a challenge. Although trust-based schemes benefit from a clear governing body in the form of the trustees, there is a clear absence of member-nominated trustees in the majority of master trusts. However, although some companies choose to operate a trust-based defined contribution scheme, most new auto-enrolled members will not find themselves saving into one. Instead, the vast majority of people will find themselves saving into a master trust or a group personal pension arrangement. In those schemes, member representation on governance boards is far more rare. At this point, I wish to refer back to the concerns that the Pensions Regulator made about master trust governance. In January 2013, said:

“We have identified a number of characteristics that, if present, may prevent these schemes from delivering good outcomes. These are: conflicts of interest as a result of the relationship between the provider and trustees; decision-making powers vested with the provider rather than trustees; a lack of independent oversight in some master trusts – unlike traditional occupational DC schemes, member and employer representatives are unlikely to be involved in important decision-making processes”.

Yes, the Bill may go some way to addressing these concerns, but it does not go far enough. We can build greater trust in the system; increase diversity and bring a range of different perspectives and experiences; and highlight areas that are of interest to members. Once again, we find no real impediment to this amendment. The law requiring master trusts to have scheme member trustees applies and exemption does exist, but that need not be required and should, in our view, be overridden.

Continuing with the theme of engaging with members, I will now address new clause 3. It requires that, one year on from the incorporation and registration of master trusts by the Pensions Regulator, the Government will fully review member-trustee representation, member engagement and annual general meetings for members.

The purpose of the new clause is to ensure that there is a review of the new master trust governance and member engagement processes. Pensions Regulator guidance stressed the importance of understanding and engaging with members to define objectives for the scheme and setting an appropriate strategy—for example, the TPR code of practice 13 on governance and administration of occupational trust-based schemes providing money purchase benefits.

TPR has stacks of advice on these issues for master trusts to follow, but we want a commitment from the Government that they will ensure that master trusts are operating in the interests of members and that the potential of a conflict of interest—in other words, the profit motive—does not get in the way. We need to make sure that there is an opportunity for experienced eyes to take a good look at the system a year after its creation. If there are risks, they must be accounted for. One way to do that is to form a Government inspection of the system.

I turn to new clause 4, which requires master trusts to hold an annual member meeting and sets out ways to ensure that members are properly given the opportunity to be involved. It is now common practice for pension funds to hold a meeting with members on an annual basis. Good member communications, provided at the right time and in an accessible format, are vital if members are to engage and make decisions that lead to good outcomes in retirement. In the Committee debate, the Minister suggested:

“Documents relating to the governance of a scheme, such as the trustees’ annual report, the chair’s statement and the statement of investment principles, have to be provided on request.”––[Official Report,Pension Schemes Public Bill Committee; 9 February 2017 c. 118.]

Having to request information about what one is paying for is the wrong way round. Let us not forget that many master trusts are profit making, so members should be given information as a matter of routine and not by request.

An annual meeting for members ensures that trustees and administrators can be made human and accountable rather than being at some distant, bureaucratic and faceless place. Trustee boards should regularly review member communications and, when deciding on the format of communications, take account of innovations and technology that may be available to them and appropriate to their members. That would allow the more engaged members to hear a presentation from trustees and senior executives about how the scheme has managed their retirement assets over the previous year and what plans the scheme has to deliver strategy and manage risk into the future on behalf of members.

Pensions Regulator guidance accompanying its new DC code highlights AMMs as one way in which multi-employer schemes can stay close to members. Through the new clause, master trusts would be brought into line with normal practice in the corporate sector and among the growing number of pension schemes.

I want to return at new clause 5 to the issue of groups currently excluded from master trust saving—specifically carers, the self-employed, those working multiple jobs and people on low incomes. As it stands, the Bill does not expand the successful auto-enrolment policy: that could have made a real difference to a number of groups who, the evidence suggests, are not saving adequately for their retirement. The Minister and I debated this issue in Committee, so I shall return to the issue only briefly.

As I recognised then, the Government have announced a review relating to the operation of auto-enrolment into master trust savings. Currently, however, the scope of that review is too broad, with few specifics set out to keep the Government to their word. The evidence speaks for itself: too many people are not putting enough away to guarantee the secure and dignified retirement that the Labour party has always worked to provide and continues to strive towards today.

Some 37% of female workers, 33% of workers with a disability and 28% of black and minority ethnic workers are not eligible for master trust savings through auto-enrolment, according to the latest DWP statistics. In Committee, the Minister suggested that gender equality was not an issue under auto-enrolment savings; I suspect that he may have been referring to the participation rate among eligible employees, which is fairly equal between genders. The statistics that I have cited, however, relate to those not eligible, and I believe women are over-represented. Perhaps the Minister can look again at the issue and write if he has evidence to the contrary.

On the specific groups, I would like to press the Minister on the issue of carers, who, as we know, make such a vital contribution to our society, public services and economy. In Committee, the Minister suggested that he would like carers to be included under the Government’s review of auto-enrolment, but accepted that they are not currently specified. May I push him to commit explicitly to including carers under the terms of the review now? I am sure that it would be of great comfort to our carers if they knew that their situation was being looked at specifically by the Government.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

I thank the hon. Member for Stockton North (Alex Cunningham), from Her Majesty’s loyal Opposition, and the SNP spokesman, the hon. Member for Ross, Skye and Lochaber (Ian Blackford), for their amendments. I hope that everyone who has followed the debate in this House and in Committee will agree that the Government’s attitude has not simply been to oppose all amendments for the sake of it. I give hon. Members my word that everything has been considered. It is the Government’s job to consider the lobbying from the sorts of organisations that the hon. Member for Stockton North mentioned. I have met representatives of most of them, as I am sure the hon. Member for Ross, Skye and Lochaber has done. It is the Government’s job to weigh up everything and make a decision.

I am really quite disappointed by the fact that today, we are almost exclusively revisiting the amendments we debated in Committee. My arguments remain unchanged, although that does not mean that I am going to sit down and ignore the contributions of the previous speakers.

[Alex Cunningham]

Feel free to do so.

[Richard Harrington]

I do not think that that would be the correct thing to do. I intend to go through the amendments in detail and answer some of the questions that have been asked in good faith; I will try to answer them in the same spirit.

New clause 1, tabled by the hon. Member for Stockton North, is about the scheme funder of last resort. It has been discussed in the other place and extensively in Committee, and my officials and I have given it a lot of consideration. It would principally require the Secretary of State to establish a funder of last resort to meet the costs associated with the transfer of members out of a master trust should a triggering event occur. On the surface, the argument seems compelling. I met Baroness Drake and others in the other House before the Bill came to this House. I considered the proposal with a very open mind, and I thought that it was the most significant of all the points that were made. I want to place on record the fact that the contributions from noble Lords, across parties, have been very useful. I pay tribute to Baroness Drake, with whom I have discussed this several times. There are honourable disagreements, however, in which neither position is ridiculous. In the end, Government have to decide. That is why I cannot give the Opposition the comfort for which they ask.

The whole purpose of the regime introduced by the Bill is to mitigate the very risk about which the hon. Member for Stockton North is concerned. He is right to be concerned about it. Various clichés have been used at various points in proceedings on the Bill, usually involving nuts, sledgehammers and other such things. I would prefer to say that it is a question of being proportionate, or not being disproportionate. I think that that sums it up.

Before a master trust is authorised, the Pensions Regulator has to be convinced it has sufficient funds to meet the cost of a triggering event. Remember, Mr Deputy Speaker—I am sure you do, as you remember everything—that this does not involve pensioners’ money, but the scheme or organisation running the fund. The Pensions Regulator must ensure that the organisers of the trust have sufficient funds to meet the cost of a triggering event. Should it fail, it will have the money to transfer out to another scheme. The regulator will monitor the situation on an ongoing basis to ensure the funds remain available.

Currently, the market is responding well to deal with existing master trusts that wish to exit before authorisation. The threat of the regulation in the Bill is making smaller master trusts consider whether they wish to part of this new regulated world. Several master trusts have already left the market in an orderly fashion. The regulator is confident that currently there are none that could not afford to transfer out members. That is very important and I hope the hon. Member for Stockton North will take that into consideration when deciding whether to press the new clause to a Division.

We are working with the regulator on non-legislative measures to address concerns about potential liabilities of trustees and receiving schemes that might arise if the record of a master trust in wind-up is poor. Hon. Members should be aware that we have a system of regulation precisely to ensure this does not happen. I view in a different way a survey I believe the hon. Gentleman mentioned in Committee from Pension Professional, which found that 50% of those surveyed did not want a scheme of last resort, as opposed to 31% who said they did. He mentioned Standard Life’s view. I accept that it is the view of industry players that they would much rather the Government step in and deal with it—that is natural; if I were in their position I would too—but we have spoken to institutions and people involved in auto-enrolment, master trusts and so on, and my clear impression is that plenty of players would bite their hand off for any schemes they could get hold of. From their point of view, taking on members involves very little cost because they are already set up and running the schemes. They seem desperate to take on these schemes.

[Alex Cunningham]

The Minister is taking great comfort from existing measures, but there is still no 100% guarantee that there will be somebody to pick up the costs in the event of a trust failure. We could see a new trust go through the authorisation process but still fail through bad management, mismanagement, fraud or whatever. Who will pick up the pieces in that situation?

[Richard Harrington]

We have to deal with the reality of the situation; that is not happening. Yes, anything could happen. We all know in life that things happen. Parliament deals with things that happen that no one expects. As the Minister with responsibility for pensions, I am convinced that in the view of the industry, the regulator and the types of institutions that would willingly take on failing master trusts, there is no need for the Secretary of State to have in his desk-drawer armoury the money or the weapons to deal with it. This is a problem that really does not exist.

The hon. Gentleman says it is all left to chance. Well, it is not left to chance. We have a finite number of master trusts that exist now thanks to the support of the Government and the Opposition for the Bill, which I hope will be enacted as quickly as possible— I think everybody wants that—so it is a finite problem. I am not an accountant, but it is not a contingent liability that could happen in years to come. Hopefully, within two years a clear regulatory system will be in place and the regulator has made very clear what trusts exist. We have taken quite a lot of care to ensure that this will not happen. I feel that the measures suggested in the new clause are totally disproportionate to the problem. For those reasons, I urge the hon. Gentleman to withdraw it, although I do not believe he will. [Interruption.] I am pleased to see that at least I have served to amuse Opposition Front Benchers.

New clauses 2, 3 and 4 stand in the name of the hon. Member for Stockton North and relate to member engagement. In Committee, in earlier debates and in conversations both on and off the record and in general to everyone who is concerned, I have made it clear, as hon. Members would expect me to do, that member engagement is important and that members should be encouraged to develop a strong sense of ownership in their pension savings. However, I remain of the view that the new clauses are unnecessary. I know that the hon. Gentleman is expecting me to say that, because we have discussed these points before.

My main rebuttal would be to remind the hon. Gentleman that the majority of master trusts are subject to the rules on trustees and the regulations of governance. Those regulations require that the schemes must have at least three trustees, and the majority have to be independent to provide services to the scheme. I agree that there must be an open and transparent appointment process for recruiting independent trustees, but current arrangements ensure that members have access to appropriate information to make decisions about their pension scheme. Those include a mandatory annual benefit statement; for most members, a statutory money purchase illustration, which gives them a projection of their pension in retirement. The hon. Gentleman says it should not be done on request, but it is available—that includes the trustees’ annual report, the chair’s statement and the statement of investment principles. The Pensions Regulator publishes guidance for trustees on communicating effectively and transparently with members.

I remind Members that all trustees have fiduciary duties and other legal requirements. Some master trusts are developing innovative ways of engaging with their members without the need for over-prescriptive statutory requirements, many of which—I say this respectfully—are of a different era, including holding general meetings that mean that people are expected to travel all over the country and everything like that.

I wish to discuss quickly the points made about the auto-enrolment review. In summary, the purpose of the review is precisely to discuss the points raised by the hon. Member for Stockton North. We are looking extensively at including self-employed people and people on lower incomes. He mentioned carers, so I should point out that all carers who are employed are now treated exactly the same as other people who are employed. If they fit the criteria, they will not be. I would not exclude looking at everything else, but the review is far broader than is required under the law.

The hon. Member for Ross, Skye and Lochaber tabled new clause 6, and wants to introduce a power to regulate so that exit charges can be capped. As I have said, the power already exists, because we intend to use schedule 18 to the Pensions Act 2014, as amended by clause 41 of the Bill, alongside existing powers, to make regulations to cap or ban early exit charges in occupational schemes, including master trusts. Existing members of occupational schemes who are eligible for pension freedoms will have charges capped at a maximum of 1%. It is not fair to exclude all charges, because there are costs involved in exit.

New clauses 7, 8 and 9, which were introduced as eloquently as ever by the hon. Member for Ross, Skye and Lochaber, are designed to make changes to the provisions in the Pension Act 2014 that address the issue of employer debt in defined-benefit schemes. As he said, I have met representatives of the plumbers UK scheme, stakeholders generally, employers and employees. Let me make it clear that the issues are raised in the Green Paper on security and sustainability in our defined benefit pension schemes, and there is a roundtable of representatives from the relevant schemes precisely to look at what changes to legislation might be needed.

It is a complex and technical problem, but there is no perfect solution, because each involves one of three parties taking responsibility for the debt: working members, retired ones and the PPS. Each has its own problems, but I give the hon. Member for Ross, Skye and Lochaber my word on this, and I congratulate him and his party colleagues on the work they have done on this issue. There is no need for fears; we will make progress. I trust that the hon. Gentleman will therefore not press the new clauses.

We dealt in Committee with the minimum requirement for annual reporting on administration and so forth, but we shall have to agree to disagree on this. We are committed to making regulations requiring information on charges and transactions costs to be provided to Members and to be published in the course of this Parliament. We will consult this year on the publication and disclosure of such information to members. We are consulting only on how rather than if we will require disclosure. I read the Financial Conduct Authority’s asset management markets study, and I sometimes think that the hon. Member for Stockton North and I are probably the only people who have read it in full detail. I fully commend it, as I have told the FCA, and we fully intend to take action on this matter. In short, the Government already possess the necessary primary powers and are well on the way to achieving the hon. Gentleman’s stated purpose, so I urge him to withdraw the amendment.

Amendments tabled by the hon. Member for Ross, Skye and Lochaber deal with scheme funder requirements. I listened carefully to what he said. He adds to the requirement in clause 8 for the master trust scheme to have sufficient financial resources for the scheme funder, but that is not required because the regulator’s assessment already has to take into account matters to be specified in regulations, which will include insolvency risk, the enforceability of any funding commitment and whether the scheme funder is subject to any prudential capital requirements. I do not believe that we need to expand the range of activities beyond that. Amendments 6 and 7 would expand the range of activities that a scheme funder can undertake by allowing it to carry out any activities apart from those that are restricted. The Government amendments tabled in Committee mean that the scheme funder is no longer restricted solely to activities relating to the master trust. I remind the hon. Gentleman—he has mentioned the Association of British Insurers—that the ABI

“welcome the cross-party consensus of the need to address the issue and the common-sense approach the Government has taken to reflect its concerns”.

In short, these amendments are not needed, so I very much urge the hon. Gentleman not to press them.

Amendment 2 would require the trustees to notify scheme members that a triggering event has occurred and of other information to be set out in regulations. I am sure you are aware, Mr Deputy Speaker, that a triggering event is a change in circumstances that poses a risk to the scheme. I accept the importance of informing members well ahead of anything that directly impacts on them. Trustees can inform members at the point of the triggering event, if they judge that this is appropriate. The Bill already requires that if the scheme does proceed to wind up, it must inform members. I feel that the amendment is well-meaning but inappropriate. It could be costly and it could frighten members for no reason, because the system of requiring them to be informed later in the process is already in place. Once again, I ask the hon. Member for Stockton North not to the amendment.

I do the same with respect to pause orders, which were mentioned by both the hon. Member press, for Stockton North and for Ross, Skye and Lochaber—it seems that I have mastered the name of that constituency by Report, which goes beyond the call of duty. The amendments would require the contributions that cannot be paid into a master trust in the interim period to be held by the employer in some sort of special account. Here I am talking about the amendments tabled by the hon. Member for Ross, Skye and Lochaber—and I said that in one sentence.

Amendment 4 tabled by the hon. Member for Stockton North removes the provision to halt payments to members from a scheme during a pause order. Let me make it clear that the Government’s position is that employees should retain the contributions made during a period, and receive a refund from their employer if those contributions have already been deducted but cannot be paid over to the scheme. We have been clear and everyone agrees that this is a rare and time-limited situation, which has a low risk of occurring, yet quite a big burden would go with it.

[Alex Cunningham]

On payments made during a pause order, I was referring to payments from the pension. I was talking about the payment of pensions, not the refund of contributions to the employee.

[Richard Harrington]

I thank you for that clarification. No, I do not thank you, Mr Deputy Speaker; I thank the hon. Member for Stockton North. The trustees can decide—they have to decide—when they wish to notify members of the pause order; it is not like it does not exist. I remind the hon. Gentleman that the Pensions Regulator can direct the trustees to notify the members at any time if they deem it necessary. That is a really important point. The power is already there; it is not as if it is going away.

With all that said, I hope that I have considered the amendments carefully. I hope that I have made effective arguments and that the hon. Member for Stockton North will not press his amendments.

I am satisfied that the Bill has been improved by amendments made in Committee—largely, I would like to say, in response to Opposition arguments. Once the Bill becomes an Act, I believe it will provide effective protection for the millions now saving in master trusts, largely as a result of the success of automatic enrolment. I hope that this House will be content to leave it unamended today.

Question put, That the clause be read a Second time.

The House proceeded to a Division.

Draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2017

Alex Cunningham Excerpts

Wednesday 8th March 2017 General Committees

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hanson—for the second time in nine days, I believe. I begin by wishing everybody and all the women in the room a happy International Women’s Day. Let us hope that when the Chancellor rises to his feet this afternoon, he delivers a Budget that delivers a little more equality in our society for the women.

I am proud that it was a previous Labour Government who introduced auto-enrolment for pensions. Although we feel that the current Government are building on that work, we certainly feel that much more needs to be done now to bring other groups into the world of auto-enrolment. That said, we very much welcome the Government’s freeze on the £10,000 earnings trigger, which will bring some new people into the system.

[Rob Marris]

On my hon. Friend’s opening theme, he will no doubt be pleased to see in paragraph 25 of the impact assessment that an estimated 75% of the newly included group are women.

[Alex Cunningham]

I am grateful for that intervention, even though it takes away the question I was about to ask the Minister, who has already confirmed that 70,000 extra people will be auto-enrolled. I was going to pose the question: what is the breakdown between men and women? My hon. Friend is ahead of me and the Minister.

I would also like to know the Minister’s intentions for future years. Can we look forward to a long-term freeze, thus tipping even more people into the system, or is this simply a one-off proposal? The freeze, of course, does not recognise our argument that more low earners should be enfranchised into pension savings through the auto-enrolment scheme.

The original policy, developed by the last Labour Government, was to align the trigger to the lower earnings limit of national insurance. We maintain that the Government should lower the trigger to that level to widen the number of low earners who are saving. However, this statutory instrument is a small step in the right direction and we will not stand in the way of its implementation.

During the Committee stage of the Pension Schemes Bill, the Government rejected our amendment requiring them to consider how excluded groups could be brought into auto-enrolment, including the self-employed, lower earners and those working in multiple jobs. We know that the review of auto-enrolment is ongoing, but the Government need to be clear about their intentions on how to broaden access. One group that could have been covered by this SI are people working in multiple jobs, earning a combined income above the threshold, but who do not benefit from having a workplace pension. How is the Minister planning to address that issue? Assuming that he is, can he also confirm that he has the necessary powers to create regulations without having to resort to primary legislation? Lowering the trigger even further would also help to enfranchise some of those working in multiple jobs, as well as those with single roles.

We have also raised concerns about those who are self-employed. We supposedly encourage and support entrepreneurs in the UK, but their lack of access to building up a workplace pension is detrimental to innovation and to their future retirement. Will the Minister say how he plans to ensure that all workers have access to workplace pensions, even if they are self-employed? There are a number of other areas where we think auto-enrolment could go further. I know that the Minister will be looking forward to the debate around those issues, which we will continue to raise over the coming months.

It has been argued that lower earners are already earning such a small amount that auto-enrolling them would be to their detriment. I disagree with that analysis. No matter how little someone earns, they need to be secure and settled in retirement. A workplace pension goes some way to securing that, even for the lowest earners. If there is a problem with lower earners not having enough money to put into workplace pensions, perhaps the Government should look at how to ensure that people have adequate wages to be able to live, provide for their dependants and save for their retirement.

It is particularly important that we ensure that women are better protected in future retirement through auto-enrolment and their workplace pension, as I fear that this Government have severely let women down, given that they are the hardest hit by their austerity measures and cuts—but as we all know, the Chancellor is going to put that right today. The Minister would be surprised if I did not include among those let down the thousands of ‘50s-born women affected by the acceleration of the state pension age. I know that many of them will be outside today protesting about that on various parts of the estate.

The Minister is fond of saying that there is probably more that unites us than divides us on pensions, but I believe that the recent Bill might contradict that somewhat. The Government are taking the smallest of baby steps to increase participation in auto-enrolment, but they are nevertheless welcome. We look forward to them taking big, adult steps in future, so that we can all ensure that when it comes to pension provision, nobody—

[Charlie Elphicke (Dover) (Con)]

I take issue with the tenor of the hon. Gentleman’s speech. Auto-enrolment and the need for reforms of pensions would not have been necessary if a previous Labour Government had not entirely and systematically destroyed the brilliant pension system that we used to have.

[Alex Cunningham]

I do not accept the second part of the hon. Gentleman’s intervention, and as for taking issue with the general tone of my speech, I thought I was being quite conciliatory and kind to the Government on this occasion, and the Minister seems to agree, even if the hon. Gentleman does not.

[The Chair]

Order. I have been very conciliatory, given that the hon. Gentleman has gone very wide of the order. I would be grateful if he and all hon. Members focused on the order.

[Alex Cunningham]

I will certainly do that in the last sentence of my speech, Mr Hanson. As I said, we look forward to the Minister taking big, adult steps in future, when we can ensure that, when it comes to pension provision, nobody is left behind, no matter whether they are a low earner, self-employed or a carer, or have multiple jobs.