Pension Schemes Bill (Eighth sitting)

Luke Murphy Excerpts

Committee stage
Thursday 11th September 2025 Public Bill Committees

[Torsten Bell]

Despite the hon. Member’s kind invitation, and as he well knows, I am not about to start commenting on the Budget—something I have heard him say himself many times over the years in his previous roles.

More seriously, the last 50 years tell us that the question of pension uprating is a big deal and very important. By “uprating”, I mean how pensions keep pace with earnings or prices. Obviously, on the state pension we tend to talk in terms of earnings. It is a big issue. The lesson of the 1980s and 1990s was about rising pensioner poverty at a time when the state pension was not earnings indexed but earnings were growing significantly. That is why we ended up with 30% or 40% pensioner poverty during those years. History tells us that those things are important. History aside, they are also obviously important for individuals, as we heard at the evidence session.

[Luke Murphy (Basingstoke) (Lab)]

I want to add my voice and the calls of my constituents for that issue to be addressed and tackled. I have been contacted by several constituents, one of whom has lost up to 70% of the value of their occupational pension. I add my voice to those calling for the Government to do what they can to address this issue, which I know the Minister recognises is having a huge impact on many people’s lives.

Roger Sainsbury, among others, raised the issue in the evidence session. He said that he had confidence that the Government would come up to the mark and find a way through the perceived difficulties. I seek reassurance from the Minister on behalf of my constituents that the Government will do all they can to ensure that that is the case.

[Torsten Bell]

I thank my hon. Friend for his questions. Let me come to the two halves; two different issues are actually being raised in these amendments and I want to make sure that we deal with them separately.

New clause 5 deals with discretionary increases for schemes that have not fallen into the PPF—those with solvent employers. Here, as I said in the surplus discussion, the changes on surplus provide a new route for trustees who do not have the power to make those discretionary increases off their own bat to discuss with employers discretionary increases on pre-1997 pension accruals. It is also clear that we need to understand this issue well. The Pensions Regulator has been engaging in surveys on this issue for exactly that reason and will continue to do so. Overall, my argument is that, for those schemes still operating, we are not going to be in the business of legislating to overwrite scheme rules when it comes to whether schemes had indexation in them pre-1997.

Questions of the PPF and FAS represent an important debate, as we heard last Tuesday—I answered questions about that then, and I will not pain everyone by repeating my answers.

New clauses 18 and 19 would not work. The new clauses as drafted would apply to subsets of the PPF population. Some pensioners would receive indexation, and some would not. The same flaws in the new clauses apply to FAS. We will definitely be opposing the new clauses, but that is without regard to the wider questions, which, as I said, I commented on last Tuesday.

Pension Schemes Bill (First sitting)

Luke Murphy Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[Kirsty Blackman]

Q Do the majority of trustees already take into account what they think scheme members would think about certain investments anyway, or about ESG, for example?

Charlotte Clark: Almost certainly.

[Luke Murphy (Basingstoke) (Lab)]

Q I want to ask about Unison’s point about LGPS funds requiring equal member and employer representation on boards—I should declare an interest as a member of said trade union. According to Unison, the Bill will mean a lack of member voice on LGPS board governance. I wonder how you respond to that criticism?

Patrick Coyne: TPR’s responsibility is not for the asset pools, which are FCA-regulated entities, but we do have responsibility for governance across public sector schemes, including LGPS funds. It is really important to recognise the member voice within good decision-making, as Ms Blackman’s question indicated, but there are a number of ways to do that within standardised corporate governance boards and reporting functions, and that is something that we would look to explore over the coming months. With the LGPS boards, like the rest of the Bill, there is the ability, through greater scale, to start hiring better colleagues, introduce better systems and processes, and put in place better governance practices, and we would expect to see that come to pass.

[The Chair]

A last, short question.

Pension Schemes Bill (Second sitting)

Luke Murphy Excerpts

Committee stage
Tuesday 2nd September 2025 Public Bill Committees

[Mark Garnier]

That is very helpful; thank you.

[Luke Murphy (Basingstoke) (Lab)]

Q I want to return to your comments, Councillor Phillips, to be sure that I caught your meaning. You mentioned the popularity or otherwise of network grid schemes running across the countryside. I was not quite sure whether you were saying that those were a relevant consideration for investment.

Councillor Phillips: Like the local government sector, the local government pension scheme operates in a goldfish bowl: constantly, on a weekly basis, an article is written about you or you receive a freedom of information request. So you are very conscious of the scrutiny, and that helps direct you to manage the investment risks as part of your fiduciary duties. What people do not realise is that there will be particular packages that Government and strategic mayors may think a fine investment that they should be in, but there might be some local problems. To go back to the previous question, it might be better for Northumberland to invest in it rather than Cornwall. That sensitivity has to be there.

[Luke Murphy]

Q But would that outweigh the fiduciary duty and the question of monetary benefits to lenders?

Councillor Phillips: The fiduciary duty would still be your main concern but in managing your risks you would have to take that into consideration as well.

[Luke Murphy]

Q How do you measure the unpopularity or otherwise? Do you look at polling? Is it just a broad sense of sentiment? As a measure, it feels a bit vague. If you are weighing that up against fiduciary duty, are you doing any actual research? I am just trying to understand how you weigh it up against the fiduciary duty.

Councillor Phillips: That is problematic, but at the same time you know when there are things it is perhaps best to steer clear of—perhaps a bypass, or something hugely controversial. It goes back to the mandatory business. If you are forced to invest in something that does not go well locally, that is not going to sit right or do the reputation of the scheme any good. Ultimately, as my colleague has said, we are talking about a well-run scheme with good integrity. Our businesses supply pensions to some of the lowest paid people in the public sector.

[Luke Murphy]

Q It does not appear to be easily definable. What the financial benefits to members of an investment will be is easier to define through the fiduciary duty, but what is popular locally feels like a bit of a value judgment.

Councillor Phillips: Like a lot of judgments.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

Q Since we have gone to mandation and surplus, I encourage you to clarify that the reserve power and the surplus measures in the Bill do not affect the LGPS in any way. Those are not within the remit of the Bill.

Councillor Phillips: My understanding is that it is a back foot.

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[Mark Garnier]

Q So you could run into the same problems that we saw recently where the Financial Ombudsman Service was publishing who has been under investigation, which caused problems. That has now been changed, but we could be entering into that same problem.

Tim Fassam: If you see very strong market or regulatory consequences for hitting an intermediate rating, the focus will be on not being intermediate rather than on being the best that you can be. We would like to see a focus on delivering the best value for money that you can.

[Luke Murphy]

Q In your written evidence, the Phoenix Group encourages Parliament to reassess some of the timelines for the initiatives to ensure that there is sufficient time for market participants to respond in the interests of members and consumers. However, you also advocate for bringing forward the 2030 timeline for small pots and extending its scope to all pension schemes. How do you reconcile those two comments? Could you elaborate on why you think the deadline should be brought forward for small pots and extended? What are some of the barriers or challenges that might make the Government reluctant to take up your suggestion?

Tim Fassam: That is a very good question. One of the things that makes the Bill powerful but more complex is the number of elements that interact. Eventually, we hope, it makes the whole greater than the sum of its parts, but it does mean it is critical that you get the ordering right. For example, we need the value for money framework and transfer without consent as soon as possible, so that we are able to get in good shape for the 2030 scale test—so those deadlines brought forward. Small pots are part of that scale: we are seeing thousands of new small pots generated every year, so the quicker we can get on with managing small pots, the fewer of them there will be for us to manage going forward.

It is critical to think very carefully about the staging and phasing of the various elements of the Bill. That is the point we are trying to make. On the elements that help the market get to where we hope to get to by 2030, we need to get in as swiftly as possible, with enough time after the detail is in place for the industry to implement. I appreciate it looks like we are asking for things to be slowed down and sped up, but it is just making sure the ordering is correct and we have enough time to get into good shape for that 2030 deadline.

We think the scope should be extended partly because of how supportive we are of the measures. Being a historical consolidator of private pensions, we have millions of customers who are not workplace customers but who could benefit from being transferred into a more modern, larger scale scheme and from going into a consolidator of small pots, for example. We see that value in our own book. We look at the opportunity and think, “We wish we could do that for this group of customers. They would really benefit.”

The pensions market is quite complex, as others have pointed out. It is contract-based and trust-based. You also have workplace and private pensions. The more consistent we can be across all the different types of customer, who often do not think of themselves as being any different from each other, the more coherent a scheme we are likely to get at the end result.

[Luke Murphy]

Q What would be the challenges of that extension and scope?

Tim Fassam: We see it predominantly as opportunity. We are not saying that the rules necessarily need to change. We are just saying these new opportunities should be extended to a wider group of available schemes, but the infrastructure we are putting in place regarding workplace auto-enrolment savers can be utilised across the piece.

[Steve Darling]

Q The bar for small pots is currently set at £1,000. Is that ambitious enough? Should it be £2,000? £5,000? Or is it a matter of eating an elephant and having to be sensible about what is achievable?

Tim Fassam: I think eating an elephant is a very good way of putting it. I think £1,000 is certainly a good place to start. This will be an incredibly valuable part of the pensions ecosystem, but it will be complex and getting it right will require a lot of thought and a lot of close working between Government regulators and industry. Having that narrow and focused scope allows us to get it in place and get it working; then it would be perfectly reasonable to look at the level at a later date. For the time being, I think that is a very clear cohort of individuals who are likely to benefit from consolidation, because at the moment they are in uneconomic pools.

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[The Chair]

Last question—Luke Murphy.

[Luke Murphy]

Q You said on Second Reading that you would encourage trustees, if they are considering a surplus release, to prioritise indexation of those that have not received it on their pre-’97 accrual. But some evidence submissions have suggested that it should go beyond encouragement, and maybe to mandation. Will you consider that?

Torsten Bell: I understand why people say that but, as I say, it is for trustees. We are not going to legislate to change the offer made in scheme rules to savers, because that would be to fundamentally change the system. But trustees will want to consider that, and they will be in a very strong position to take a strong view about that when discussing with employers what happens with the surplus release situation.

Welfare Spending

Luke Murphy Excerpts

Tuesday 15th July 2025 Commons Chamber

[Luke Murphy (Basingstoke) (Lab)]

I am grateful to the Opposition for initiating a debate that enables us to discuss one of the most critical issues facing our nation: child poverty. Every child growing up in poverty represents a future diminished, opportunity denied and potential unfulfilled. Every child deserves the best start in life, so that they can learn, achieve and go on to live the best life that they deserve. That is why tackling child poverty is now firmly back at the top of the Government’s agenda.

For 14 years, the previous Government presided over a shameful legacy that led directly to this crisis. As others have said, they left us with 4.5 million children in relative poverty, including 3,000 in my constituency. Since 2010, child poverty increased by a staggering 900,000 children, but instead of trying to tackle the problem, the Conservatives decided in 2015 to abolish the target of eradicating child poverty. Their motion and, indeed, their rhetoric allude to the idea that Governments should “make work pay,” but when they were in government they oversaw the first Parliament on record with living standards lower at its end than at its start.

Some within the Conservative ranks have today shown a shocking disregard for this issue. They have talked of personal responsibility, but their version of personal responsibility appears to be lecturing others on it rather than taking any themselves. If they were taking personal responsibility on child poverty, they would come to the House and explain why it rose by 90,000 children. Was it a matter of policy design, was it a matter of policy failure, or was it, indeed, the fault of the children themselves?

[Tom Hayes]

Does my hon. Friend agree that people in disadvantaged and poorer areas typically live in overcrowded, poor-quality rented accommodation, and that this Labour Government’s efforts to improve the quality of rented accommodation should be commended as a way of tackling child poverty?

[Luke Murphy]

Absolutely. As one who has fought outside the House for significant investment in affordable housing, particularly social housing, I greatly welcome the Government’s massive investment in the affordable housing programme.

It falls to this Government to fix the mess that the Conservatives left behind. We are committed to driving down poverty and driving up opportunity in every part of our country, delivering the change that the country so desperately needs. We have already made a considerable downpayment on the comprehensive strategy on child poverty that is due later this year, providing free school meals for all children in households receiving universal credit, for which so many of my Labour colleagues campaigned for many months and years; delivering free breakfast clubs in schools; reforming universal credit deductions with a new fair repayment rate, which the Minister mentioned earlier and which puts hundreds of pounds back into the pockets of 700,000 of the poorest families; and increasing the standard allowance of universal credit.

Looking ahead, our plan to get Britain working involves the biggest investment in employment support in a generation, including an additional £1 billion a year by the end of the Parliament for work, health and skills support through a “Pathways to Work” offer.

[Adrian Ramsay]

The hon. Gentleman has rightly highlighted the terrible record of the previous Government and the number of children who went into poverty during that period, which includes an extra 250,000 who went into poverty as a result of the introduction of the two-child benefit cap. He has listed some actions that this Government are planning to take. Will he add to that list his support for scrapping the cap, and will he join figures in his own party, such as Lord Kinnock and Mark Drakeford, in supporting the introduction of a wealth tax for the super-rich, so that we can fund the tackling of inequality and support the most vulnerable?

[Luke Murphy]

I will not get ahead of our Chancellor when it comes to the announcements about taxation that will be made later in the year, but I am confident that those on the Front Bench know that they have our full support in delivering the final recommendations of the child poverty taskforce, also later in the year.

This Government will never allow young people to be written off, as the Tories did for years. As I said at the beginning of my speech, I am pleased that the Conservatives initiated the debate, which has given us all a chance to discuss child poverty and their record on welfare, both of which are shocking. I lament the fact that they have failed to recognise the scale of their failure today, but I am pleased that this Government are getting on with the job of returning people to work, ensuring that social security is there for those who need it, and tackling the moral stain on our country that is child poverty.

--- Later in debate ---

[Danny Kruger]

It just doesn’t flow as well, but yes, apologies Madam Deputy Speaker.

[Luke Murphy]

In 2023, the shadow Minister said:

“The narrative that the public has now firmly adopted—that over 13 years things have got worse—is one we just have to acknowledge and admit.”

Does he still acknowledge and admit that things got worse under his Government?

[Danny Kruger]

I am grateful to the hon. Member’s archaeology in finding my previous quotes. Many things did get worse over the last decade and a half—of course I recognise that. But much of it was as a consequence of the global financial meltdown that his party presided over. We spent many painful years fixing the deficit that Labour left us.

I want to quickly cite the previous Government’s record on young people. Labour Members have boasted of the new Labour years, but in 1997 youth unemployment stood at 650,000, and by the time Blair and Brown had finished in 2010 it was up a third to 940,000. When we left office 14 years later, we had almost halved it down to 560,000—lower even than in 1997. That is the Conservative record.

I will conclude shortly, but I first say to those across the House who want to lift the child benefit cap to consider what they are asking. They are asking working people who pay more in tax than they receive in public services—and who themselves have had to take agonising decisions about whether or not they can afford to have another child given the taxes they pay—to fund the benefits for other people who receive more from the system than they pay in.

Winter Fuel Payment

Luke Murphy Excerpts

Wednesday 19th March 2025 Commons Chamber

[Matthew Patrick]

I will take interventions—I am happy to do so—but I will make some progress first. Hon. Members may have heard earlier that the right hon. Member for Herne Bay and Sandwich (Sir Roger Gale)—I do not believe that he is currently in his seat—said it was nonsense for him to be receiving the winter fuel allowance. I think he revealed—it was news to me—that the Conservative Government had had plans to means-test it. I will be interested if those who wish to intervene would confirm whether he was right.

[Luke Murphy (Basingstoke) (Lab)]

Members on the Conservative Benches have said that they do not think Richard Branson should have been receiving the winter fuel payment. They talk about those above £13,000. If the Conservative party had been so concerned about the very poorest pensioners, pension credit would not have been the most underclaimed benefit in the welfare system, with 700,000 people not claiming it. If they really cared about the most vulnerable pensioners, would they not have done more about that?

[Matthew Patrick]

My hon. Friend makes a good point. There is incredible uptake under this Government because we want to see the poorest pensioners access the support they are entitled to.

--- Later in debate ---

[Joe Robertson]

I am grateful to the hon. Member for giving me the opportunity to talk about means-testing— I did not expect to have that Government argument made by a Liberal Democrat Member, but so be it. There is some sympathy, from across the House, for the argument for means-testing the winter fuel payment, but I assure the hon. Gentleman that nobody on the Conservative Benches thinks that the means-testing cut-off point, if they believe in one, should be £13,500. That means that 10 million pensioners have lost out on the winter fuel payment. Unless the Government can make a fiscal argument for removing winter fuel payments from the very wealthy that actually delivers more funds to the Treasury, this decision should not have been taken at all, and should certainly not have been taken when it harms those on a fixed income of very little.

[Luke Murphy]

The motion talks about ensuring that

“those eligible for Pension Credit receive it”.

To return to the point I made earlier, if Conservative Members were so concerned about vulnerable pensioners, why was there absolutely no movement in the take-up of pension credit under the previous Government? Some 700,000 pensioners are eligible for pension credit, but I do not remember a big campaign on that by the previous Government that made a difference—

[Madam Deputy Speaker (Caroline Nokes)]

Order. The hon. Gentleman’s intervention is far too long.

[Joe Robertson]

I thank the hon. Gentleman for drawing attention to his own Government’s promise to increase the take-up of pension credit. After the past winter, there are still 750,000 pensioners who have not taken it up, so he should not speak with any pride or seek to deflect to previous Governments when his own Government have withdrawn the winter fuel payment and there are still 750,000 eligible pensioners who are not receiving pension credit.

[Luke Murphy]

On that point, will the hon. Gentleman give way?

[Joe Robertson]

I am sorry, but in the time remaining I cannot take another intervention from the hon. Gentleman.

Without the winter fuel payment, over the winter we have seen a 5% increase in the number of people aged over 65 attending A&E, and of those who have attended A&E, there has been a 9% increase in hospital admission. The motion seeks a proper impact assessment and analysis by the Government of the effects of winter fuel payments being withdrawn. This was not a one-off winter, and it was a warmer winter than average. The same will happen next winter, the following winter and the winter after that, unless the Government bring back the fuel payment.

Income Tax (Charge)

Luke Murphy Excerpts

Monday 4th November 2024 Commons Chamber

[Mel Stride]

I stand by our record when I was Secretary of State for Work and Pensions, particularly on the support that the Department gave to the disabled, not least the results that we achieved in encouraging and helping them into work, which is the best possible outcome.

When there has been such a perpetration of deceit, there must be the alibi—the smokescreen—which is, of course, the fictitious, confected black hole of £22 billion. Labour Members rubbed their hands in glee when the OBR said it would be looking into the matter. It reported back, on the day of the Budget, and what did it find? It found that it was not able to legitimise that black hole of £22 billion, and came up with a figure for in-year fiscal pressure that was below half that. It observed that if it had been focused on that figure at the time of the spring Budget, conversations would have been held, and it is conceivable that the number would have been smaller still.

From our experience in government, we know that it is quite normal practice to manage in-year fiscal pressures, and to net off the underspends against the overspends. In reality, this black hole is “a dead parrot”. It has ceased to be. If it was not nailed to its perch, it would be “pushing up the daisies”. Far from being just “shagged out” after a prolonged squark, Madam Deputy Speaker, it is dead: the black hole is “an ex-parrot”.

[Luke Murphy (Basingstoke) (Lab)]

I am grateful to the shadow Chancellor for giving way. Based on his performance, everyone on the Government Benches heartily welcomes his promotion. Does he accept that the OBR says in the letter he mentions that its forecast would have been “materially different”?

[Mel Stride]

I have just explained exactly what the OBR said. It said that it does not legitimise the black hole—the £22 billion, which has been repeated yet again from the Government Front Bench.

Opportunities were missed in this Budget, not least around driving up productivity. We know that Labour Governments spend money. We know that Labour Governments tax people a lot—that is what they do. What they do not do is spend the money with any strings attached. There has been a 14% pay rise for train drivers and 22% for junior doctors, but not one suggestion that there might be improvements in productivity to accompany that spending. That is unlike the Conservative party when we were in office: under my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt), we had a very clear, fully funded plan for the national health service and a long-term workforce plan to drive up productivity.

Let me come to the issue of welfare. It is gratifying to hear the Secretary of State confirm that the Labour party is going ahead with some of the more important reforms that we brought forward, such as that to the work capability assessment.

--- Later in debate ---

[Luke Murphy (Basingstoke) (Lab)]

I congratulate my hon. Friends the Members for Huddersfield (Harpreet Uppal), for North Somerset (Sadik Al-Hassan) and for Wrexham (Andrew Ranger) on their excellent maiden speeches. As the first ever Labour MP for Basingstoke, I am proud to champion the first Labour Budget in 14 years, delivered by the first ever female Chancellor. I also congratulate the right hon. Member for North West Essex (Mrs Badenoch) on her election as leader of His Majesty’s official Opposition. As the first black woman to lead a major political party, she has achieved a significant milestone.

I will focus on three key points. The first is to recognise that the Budget represents a crucial shift away from the failed policies of the last 14 years. As my hon. Friend the Member for Swansea West (Torsten Bell) has said, the risks in continuing down the same path were immense economically, socially and politically. The previous Parliament saw living standards decline, the lowest growth and highest inflation in the G7, and sky-rocketing hospital and housing waiting lists. The new Leader of the Opposition has claimed that the public now expect too much from government, but my constituents in Basingstoke have lost faith that the state can deliver even the most basic of public services after 14 years of neglect.

That brings me to my second point: the Budget is about fixing our public finances and repairing our public services. Our first fiscal rule ensures that day-to-day spending is sustainably funded, which is essential given the chaos of the Conservatives’ mini-Budget. Crucially, however, our rules allow for increased public investment: an approach welcomed by the International Monetary Fund. Unlike the Conservatives, who, as others have mentioned, planned to cut public investment by a third, we believe in investing in housing, schools and infrastructure. Their opposition to new investments reveals their desire to return us to a path of decline that voters rejected just a few months ago. The Budget will lead to more NHS appointments and better healthcare, more teachers and improved education, and more secure, affordable housing for all.

Finally, the Budget protects and delivers for working people in Basingstoke, just as we promised in our manifesto. The increase in the national living wage will mean £1,400 more for a full-time worker on the living wage. We are addressing the legacy of poverty left by the previous Government, with one in five children in Basingstoke living in relative poverty. Changes to the repayment rate of universal credit will make over a million of the UK’s poorest households £420 better off from next April.

The Budget signifies a decisive move towards a fairer, more prosperous future for Basingstoke and for Britain. Those on the Opposition Benches will regret their opposition to the Budget. I am proud to support it.