House of Commons
Wednesday 22 March 2017
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
Business Before Questions
Middle Level Bill
Second Reading opposed and deferred until Wednesday 29 March at Four o’clock (Standing Order No. 20).
Oral Answers to Questions
Cabinet Office and the Chancellor of the Duchy of Lancaster
The Minister for the Cabinet Office was asked—
Cyber-attacks are growing more frequent, sophisticated and damaging. The government transformation strategy will ensure that government protects all its services and products from cybercrime, and will ensure that all systems are designed with cyber-security and appropriate privacy safeguards in place.
I am grateful to the Minister for that answer. Can he reassure us that as the transformation strategy, for very good reasons, puts more and more of our personal data—on our taxes, on our health and so on—online, none of those data will be at risk of ending up in the wrong hands?
I am very grateful to the right hon. Gentleman for making that point. Central to what we are doing is protecting not only the information that government requires to be kept confidential, but, as importantly, the information that citizens require to be kept confidential. That is partly why gov.uk Verify has been designed so that it protects citizens’ data in the inquires that they make of government.
Last night, I had a very pleasant evening, in Blacks Club, with Dr Helen Stokes-Lampard, the chairman of the Royal College of General Practitioners, who is my own personal GP from Lichfield. She was telling me that NHS data on patients will now be held on the cloud—and this system will work, of course, because individual programmes will access it. But how secure will the cloud be?
My hon. Friend has doctors in high places. All I would say to him is that specific inquiries about NHS digital services should be directed to the Health Secretary, but I shall ensure that my hon. Friend receives a proper reply from him. As for the Government’s general strategy, our purpose is to make sure that we have the most secure government information systems anywhere in the world. That is what lies behind the government transformation strategy and the Government’s cyber-strategy, too.
Is the Government’s strategy on big data not the wrong way round? It is concentrating on big organisations having a central repository of data over people, whereas this should be about an empowering state where individuals have control over their own data—they should not have them held by big organisations.
The Government are seeking to achieve precisely the latter of those things, which is why gov.uk Verify has been built as it has. It is very important that citizens have complete faith in the data held by government and feel able to interrogate data in the way that is open to them. We are not quite where I would like to be on this yet, but as we design digital services in the future I want to arrive at precisely the point the hon. Gentleman indicates.
Will the Minister update the House on the action he is taking to ensure that businesses are aware of their responsibilities on cyber-security, particularly those businesses that trade with government, so that businesses are safe and government is made safe?
I am grateful to my hon. Friend for raising this important matter. I direct businesses to look at the cyber essentials pack on the National Cyber Security Centre website, which details the essentials of what businesses can do to protect themselves. The NCSC’s purpose is to ensure that businesses that work with government adhere to the same high standards of cyber-security that the Government expect of themselves.
Domestic Abuse Victims: Voting
I published a policy statement on 3 March proposing reforms to anonymous registration and seeking feedback from interested parties by 26 May. I want to reflect the experiences of domestic abuse survivors so that they can more easily exercise their right to vote. This will help to ensure that we have a democracy that works for everyone.
I thank my hon. Friend for that answer and welcome any moves towards making it easier for both men and women who have suffered domestic abuse to register to vote. Will he outline further what changes he is making, and confirm that the names and addresses of those men and women who are registering anonymously will not be on the electoral register?
I can confirm to my hon. Friend that names and addresses do not appear on the electoral register as a result of the application to register anonymously. The Government are proposing to make it easier for an applicant to demonstrate that their safety is at risk by expanding the type of documentary evidence required and the people who can attest to this, and as part of the consultation process we are looking at every point of contact that the survivors of domestic abuse come across to make sure that they exercise their right to vote.
I warmly welcome the Minister’s efforts to make it easier for victims of domestic abuse to register to vote, and to have the all-important right to have their say and be heard, which has been raised in my surgeries by Wealden constituents who have survived domestic abuse. One part of the Government’s plan is to increase the number of attestors by lowering the seniority required of them in the police and social services, and possibly by expanding the number of professions they come from. Will training or guidelines be provided to help the new attestors when they are called on to adjudicate in a specific case?
The Cabinet Office will be working with the Electoral Commission and representative bodies to provide the relevant guidance that will be required.
I commend the Government on the work they have done with Women’s Aid and other organisations. Will my hon. Friend assure me that this work will continue to ensure that the victims of all types of domestic abuse are heard at the ballot box?
I have worked closely on this issue with domestic abuse charities over the past six months, including Women’s Aid, to explore what can be done to improve the anonymous registration process. I look forward to continuing this work with Women’s Aid and other domestic abuse charities.
For 26 years before I was a Member of Parliament, I worked in the field of domestic abuse. Will the Minister make sure that he considers the extent to which domestic abuse perpetrators will make efforts to track down their victims, often for many months and years after the relationship has ended?
I thank the hon. Lady for her contribution to the field of domestic violence work. She is absolutely right that someone is a survivor of domestic abuse not just for two or five years, but for the rest of their life. When we give people the right to vote, we must ensure that they and their names and addresses are protected. We will carry forward that work as part of the consultation process, and given her expertise, I welcome any contribution that she would like to make.
It is great that the Government are showing bureaucratic flexibility to help domestic abuse victims to vote, but such flexibility should be put into all the Government’s voter registration efforts. Will they build “register to vote” links into all their online service application pages?
During the past couple of years, we have introduced the ability to register to vote online. It has been highly successful, with 24 million people taking the opportunity to register to vote online. As part of our democratic engagement strategy, which I will publish in the summer, I am keen to look at digital democracy and where it can work, and to see what we can do with other Departments to ensure that we have such points of contact and that we base democratic registration around individual users. I will be taking forward exactly what the hon. Gentleman mentioned.
Will the Minister ensure that the utmost application of secrecy will be adhered to for victims of domestic abuse who are severely traumatised and have found it difficult to apply for either postal or proxy votes.
The hon. Gentleman is absolutely right. We need to ensure that we learn from the experience of domestic abuse survivors. We must look at that particular journey and ensure that the registration process, when we have it, works for women who need extra protection. We must also look at refuge managers to ensure that we provide the support that they will need.
It is obviously welcome that the Government are seeking to protect the voting rights of domestic violence survivors by making anonymity easier—by the way, the announcement of a one-off cash injection for specialist refuges is also welcome, although much more is needed. However, people cannot easily vote if they have no fixed abode. The truth is that Women’s Aid estimates that one in six of all specialist refuges have closed since 2010, and, tragically, over 150 women plus 100 children per day are unable to find a specialist refuge. Will the Minister ensure that the inter-ministerial group now addresses the twin central questions: providing sustainable funding for refuges and ensuring comprehensive refuge provision in every part of the country?
The hon. Gentleman is right to say that we have increased funding for women’s refuges. The Prime Minister has set out very clearly that she wishes to make domestic violence one of her personal priorities, and a review is ongoing. When it comes to registration, let me be clear: this issue was raised with me, through Women’s Aid, by a lady called Mehala Osborne. She is a survivor of domestic abuse, and she has fought bravely by putting her name out in the public domain to campaign for other women. There are potentially 12,000 women who, by virtue of their circumstances, cannot take the step of registering to vote, and we are determined to give them their voice so that they are heard.
Although this matter falls within the responsibility of Her Majesty’s Revenue and Customs, I am pleased to confirm that the Cabinet Office and HMRC officials are working together to identify how best to promote electoral registration further in relation to national insurance numbers, including notification letters.
Clearly, any steps to improve voter registration have to be welcomed, but does the Minister agree that a far more efficient and cost-effective way to do so would be simply to introduce a system of automatic voter registration?
The Government have been clear in their determination to ensure that we have individual electoral registration. Voting is not just a right; it is a responsibility. I am delighted that the Electoral Commission said in a report published last year that the number of 16-year-olds registering to vote increased by 17.7%.
Mrs Sharon Hodgson. Not here.
The national insurance registration process is one way to increase electoral registration and therefore democratic participation, but there are others, including education, auto-enrolment—as my hon. Friend the Member for Midlothian (Owen Thompson) suggested—and, of course, online voting. When previously I pressed the Cabinet Office on this matter, it said there would be a plan in the spring to widen democratic participation. Spring is here. Where is the plan?
Indeed, spring has sprung, and my commitment to ensuring that we have a democratic engagement plan is still maintained and in place. We will publish that plan shortly, in due course. We are committed to ensuring that we have a democracy that works for everyone, and that includes young people as well.
We welcome the Government’s commitment to look at promoting voter registration on national insurance letters. We know how important it is to make sure that young people and students are registered to vote—they are often the people missing from the electoral roll. Will the Government commit to supporting the amendment from the other place to the Higher Education and Research Bill? It would allow universities to auto-enrol students on campuses.
I met Baroness Royall yesterday to discuss her amendment. I have been working over several months with universities, the Cabinet Office funded the University of Sheffield pilot that looked at this enrolment process with £10,000, and we are looking at other universities that are beginning to introduce it. It is right that we have a democracy that works for everyone and that we make it easier for electoral registration staff and universities to work together. We are determined to look closely at this process.
Government Efficiency Savings
The Government are conducting an efficiency review to deliver savings and embed an efficiency culture into government. The Chief Secretary and I are leading the review together. Cabinet Office functions provide support, expertise and assurance, helping Departments to work together to cut waste and inefficiency.
What progress is being made with the single departmental delivery plans across every Government Department? How will they align cost savings and Government policy initiatives more closely to deliver our manifesto?
The House, especially those interested in plans, will be pleased to know that this is the first time in the history of Government plans that we have done a second iteration of a plan—that is an exciting point. We are aligning the plans with the efficiency review, which means that, amazingly, we are going to plan government with money at the same time.
The electrification of the railway from Paddington to Swansea has an overspend of £1.2 billion. The Minister knows that it is not an isolated case, with a number of infrastructure projects overspending. What is the Department doing to ensure, before the Government sign contracts, that the targets are not over-optimistic?
The hon. Gentleman makes a serious point. The Infrastructure and Projects Authority was set up to assess infrastructure projects rigorously, which is why we have been able to reduce the number of overspends he correctly identifies. The complex transactions unit in my Department also assesses transactions before they happen to make sure that we are protecting the Government. I hope the big projects that are coming down the line are going to be framed even better than others have been in the past few years.
The UK is recognised as a world leader in transparency, and the Government are committed to being the most transparent in the world. We have published an unprecedented amount of data—more than 35,000 datasets, including data about the workings of government.
Will my right hon. Friend outline how the Government are being informed by international best practice to meet their manifesto commitment to be the most transparent Government in the world?
We must learn from each other, which is why we are members of the Open Government Partnership, which this country helped to set up. I have been to the OGP conference to learn from others, and we will continue to learn in that way, including from the OECD, the G20 and the International Aid Transparency Initiative.
Does the Minister believe that transparency should begin at home? If he does, can he please explain where the response is to my letter of 19 December, which is addressed to his Department and to the director-general of his Department’s propriety and ethics team, because I have yet to receive it?
I profoundly apologise to the hon. Lady if we have not responded in time. It is very important to me that we respond courteously and quickly to Members, and I shall chase up the matter immediately and make sure that she gets a proper response.
It is worth remembering that it was Margaret Thatcher who made it possible for local councils to conduct their hearings in public, which is something that we now take for granted. That is why we need to continue this if we are to reinforce the relationship between citizens and the public bodies that serve them.
I asked the Secretary of State for Scotland how many meetings he has had with the Chancellor of the Exchequer to discuss the Ayrshire growth deal. His answer was that he has had lots of meetings in general, but that the details of ministerial discussions are not routinely disclosed. Does the Minister agree that the lack of transparency in his answer is a disgrace?
It sounds entirely transparent to me. The Secretary of State is on the Bench. He has heard the question and no doubt he will want to be caught afterwards to discuss it further. I know that he has almost daily discussions with the Chancellor about the interests of Scotland, which is why he was able to secure an additional £350 million for Scotland in the Budget. That shows the advantages of being in this Union of the United Kingdom.
Electoral Registration: Funding
The Cabinet Office committed to the funding of additional costs of individual electoral registration for the remainder of the Parliament. Local authorities maintain their previous statutory responsibilities to maximise the completeness of the registers and are responsible for the funding of the costs of the household canvas.
Research carried out after the EU referendum by Newcastle University’s Dr Alistair Clark on behalf of the Electoral Commission said:
“Alarmingly, concerns about levels of funding were raised with nearly half of local authorities claiming that they have insufficient funds to maintain the electoral register.”
Does the Minister not find that statement deeply worrying for our democracy, and, if so, what are the Government doing about it?
The Government have committed to fund local authorities to cover the additional costs of IER. In 2016-17, those costs came to £21 million, and a further £49.5 million is committed to the end of this Parliament. In particular, Newcastle City Council received £145,000 for 2016-17 to fund its delivery of IER and the register.
Voter Registration: Proof of Identity
Where an applicant’s identity cannot be verified in the first instance, an exceptions process allows for a number of alternative forms of identification to be used to support that application. Finally, an attestation can support an applicant if they are able to provide any of the documentation required.
Last year, it was reported that only 25% of people knew their national insurance number, which is one of the key identifiers. What assessment has the Minister made of the impact that that will have on voter registration?
When it comes to the voter registration process, I am delighted that the Electoral Commission reported last week that we now have a record 47.3 million people on the register. Our democracy is more engaged than ever before. We have had 24 million applications online using the national insurance number, but, as I have said, there are alternatives for those who do not have national insurance numbers, including the attestation process, which works very effectively.
The Cabinet Office is the centre of government. The Department is responsible for the constitution, for supporting the design and delivery of Government policy and for helping government to deliver the finest public services through more efficient working and attracting and developing the finest public servants.
The House of Lords has amended the Higher Education and Research Bill to ensure that HE institutions give their students the option to go on the electoral register. What will the Minister do to assist that process as statistics suggest that only 13% of students are registered at present? It would save both them and councils money.
As I stated in an earlier answer, I met Baroness Royall to discuss her amendment. I am committed to ensuring that more students are able to register easily, which will save money for electoral registration officers. I am working on looking at this process. The Cabinet Office funded the pilot in Sheffield in the first place, and we are determined to ensure that we carry on this work.
The Cabinet Office has set up a centre of expertise that is working with public bodies to understand the overall problem, agree and monitor aspirations for a reduction of fraud, and put in place standards for organisations. As a result of that work, we had the benefit of savings of £733 million for 2015-16.
The ministerial code clearly states that former Ministers require advice from the Advisory Committee on Business Appointments prior to announcing any new business appointments. ACOBA is unable to report on its advice retrospectively after a new post has been made public. Can the Minister explain why he gave different advice to the House during his response to the urgent question on Monday? Was it just a mistake, or have the rules conveniently been changed in the space of a week?
The hon. Gentleman has made his point very clear. ACOBA is coming to its determination and it will consider all the evidence in the round. It is important that it does so without my prejudicing its decision by passing comment.
Order. There is excessive noise, which is rather discordant and very unseemly. Let us have a bit of order for Mrs Sheryll Murray.
I am very concerned that the Liberal Democrats in Cornwall are not seeking to use the One Public Estate programme, which is set up precisely so they can save public money and direct it to the frontline. That is where they should be directing their efforts.
Fortunately for the right hon. Gentleman, he is not responsible for the Liberal Democrats—either in Cornwall or anywhere else.
I am as concerned as the hon. Gentleman will be. That is why we need to make sure that the independence of our statistics machine, to which other countries look for advice, is shown to the public to be the best in the world. That is what it is.
We have made considerable progress. According to our original timetable, we will be able to release the results of the first part later this year. That will be a moment of reckoning for this country, as we face up to the serious challenges still ahead of us in making sure that everyone has an equal opportunity, no matter what their colour or background.
It is clear that on that issue the Electoral Commission has taken action against parties across the political divide. It is right, going forward, that we look at incremental ways in which we can reform party funding, but our elections are the most transparent in our democracy. They ensure the publication of spending and it is right that that should take place.
Order. There is far too much noise. The voice of Corby must be heard. I call Tom Pursglove.
My hon. Friend is right to point out that it was this Government who introduced new guidance to make sure that we could support the UK steel industry wherever possible. That has been well received by the industry, and I hope to be able to write to my hon. Friend quite shortly with the results of where we have got so far.
Order. So must the voice of Middlesbrough South and East Cleveland.
Will the Minister for Digital and Culture recuse himself from decisions on Government media policy, given his close relationship to the new editor of the London Evening Standard?
My right hon. Friend the Minister is a decent and honourable man, and he will make his own decision about his ministerial responsibilities. It is wrong to impugn his motives in the House, if I may say so.
Does the Minister intend to expand the One Public Estate initiative? It not only rationalises our public buildings for financial reasons, but gives us the opportunity to create better and more streamlined services for our residents.
My hon. Friend has it in one: not only does this initiative allow us to save costs so that we can direct money to the frontline, but it means that public services are far simpler for our citizens to deal with, because they are located in one place.
The Prime Minister was asked—
I would like to express my condolences to the family and colleagues of the former Deputy First Minister of Northern Ireland, Martin McGuinness. Of course, we do not condone or justify the path he took in the earlier part of his life, and we should never forget that, or the victims of terrorism. However, as my noble Friend Lord Trimble set out yesterday, he played an indispensable role in bringing the republican movement away from violence to peaceful and democratic means and to building a better Northern Ireland.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
The Prime Minister says that there is more money for the national health service, more nurses and more doctors, yet Bassetlaw breastcare unit has been cut back and Bassetlaw children’s ward has been closed overnight. Something, clearly, does not add up. Therefore, the mothers of the most seriously ill children, who use the children’s ward the most frequently, and I offer to work with the Prime Minister to solve this problem. Is her door at No. 10 open to us?
If we look at what has happened in the hon. Gentleman’s area, we see that his NHS Bassetlaw clinical commissioning group is receiving a cash increase, and that the Doncaster and Bassetlaw Hospitals NHS Foundation Trust has 80 more doctors and nearly 30 more nurses. He talks of listening to the voice of local people in relation to health services in the local area, but that is exactly what the sustainability and transformation plans are about—hearing from local people and local clinicians, and putting together the health provisions that ensure they meet local needs.
As I have said before, the referendum result was not just about membership of the EU; it was a vote to change the way that this country works, and who it works for, forever, to make Britain a country that works for everyone, not just the privileged few. That is why the plan for Britain is a plan to get the right deal for Britain abroad, but also to build a stronger, fairer Britain for ordinary working families here at home, like those in Telford. I am pleased that we have already provided £17 million of funding to The Marches local enterprise partnership to improve local infrastructure in Telford. This Government are putting those resources in, and our plan for Britain will deliver that stronger, fairer economy and a more united and more outward-looking country than ever before.
I start by echoing the words of the Prime Minister concerning Martin McGuinness, the former Deputy First Minister of Northern Ireland. He died this week, and our thoughts go to his family, his wife Bernie and the wider community. Martin played an immeasurable role in bringing about peace in Northern Ireland, and it is that peace that we all want to see endure for all time for all people in Northern Ireland.
This Government are cutting the schools budget by 6.5% by 2020, and today we learn that the proposed national funding formula will leave 1,000 schools across England facing additional cuts of a further 7% beyond 2020. Can the Prime Minister explain to parents why cutting capital gains tax, cutting inheritance tax, cutting corporation tax and cutting the bank levy are all more important than our children’s future?
This Government are committed to ensuring that all our children get the education that is right for them and that all our children have a good school place. That is what the Government’s plans for education will provide. That is building on a fine record of the past six and a half—nearly seven—years of Conservatives in government, when we have seen 1.8 million more children in good or outstanding schools. We have protected the schools budget. The national funding formula is under consultation, and obviously there will be a number of views. The consultation closes today and the Department for Education will respond to it in due course.
The manifesto on which the Prime Minister fought the last election promised:
“Under a future Conservative Government, the amount of money following your child into school will be protected.”
No wonder even the editor of the London Evening Standard is up in arms about this. The cut to school funding equates to the loss of two teachers across all primary schools and six teachers across all secondary schools. So is the Prime Minister advocating larger class sizes, a shorter school day, or unqualified teachers? Which is it?
We have, as I said, protected the schools budget. We now see more teachers in our schools and more teachers with first-class degrees in our schools. As I say, we see 1.8 million more children in good or outstanding schools. That is a result of this Government’s policies of diversity in education: free schools, academies, comprehensives, faith schools, university schools, grammar schools. We believe in diversity in education and choice for parents; the right hon. Gentleman believes in a one-size-fits-all, take-it-or-leave-it model.
The Prime Minister was clearly elected on a pledge not to cut school funding, yet that is exactly what is happening. Maybe she could listen to headteachers in West Sussex who say they believe that savings will come from
“staffing reductions, further increased class sizes, withdrawal of counselling and pastoral services, modified school hours, reduction in books, IT and equipment.”
I have a heartfelt letter from a primary school teacher by the name of Eileen. Eileen is one of our many hard-working teachers who cares for her kids, and she wrote to me to say:
“Teachers are purchasing items such as pens, pencils, glue sticks and paper out of their own pockets. Fundraising events have quadrupled, as funds are so low that parents are having to make donations to purchase books! This is disgraceful.”
Does the Prime Minister agree with Eileen?
We are seeing record levels of funding going into our schools. We have protected the schools budget; we have protected the pupil premium. But what matters for parents is the quality of education—
What about Eileen?
Order. People should not keep yelling out, “What about Eileen?” The Prime Minister is giving her response to the Leader of the Opposition, including the references to Eileen.
What matters for all of us who are concerned about education in this country is that we ensure that the quality of education that is provided for our children enables them to get on in life and have a better future. That is what this Government are about. It is about ensuring that in this country you get on on the basis of merit, not privilege; it is about ensuring that every child—[Interruption]—every child across this country has the opportunity of a good school place. That is what we have been delivering for the past seven years, and it is what we will deliver into the future—and every single policy that has delivered better education for children has been opposed by the right hon. Gentleman.
Maybe the Prime Minister could have a word with her friend the hon. Member for The Cotswolds (Geoffrey Clifton-Brown), who said this week:
“Under this new formula, all my large primaries and all of my secondaries will actually see a cash cut in their budgets.”
In the Budget, the Government found no more money for the schools budget, but they did find £320 million for the Prime Minister’s special grammar schools vanity project. There is no money for Eileen’s school, but £320 million for divisive grammar schools. What kind of priority is that?
First of all, what we have done in relation to the funding formula is to address an issue that Labour ignored for all its time in government. Across this House there has generally been, for many years, an accepted view that the current formula for school funding is not fair. I was saying this—I was calling for a better funding formula—more than 15 years ago when I was the shadow Education Secretary. We have put forward a proposal, and we are consulting on it. The consultation closes today, and we will respond to that consultation.
The right hon. Gentleman talks about the sort of system we want in schools. Yes, we want diversity, and we want different sorts of schools. We have put money into new school places. But I say to him that his shadow Home Secretary sent her child to a private school; his shadow Attorney General sent her child to a private school; he sent his child to a grammar school; and he went to a grammar school himself. Typical Labour—take the advantage and pull up the ladder behind you.
I want a decent, fair opportunity for every child in every school. I want a staircase for all, not a ladder for the few. The Prime Minister has not been very good at convincing the former Secretary of State for Education, the right hon. Member for Loughborough (Nicky Morgan), who wrote last week:
“All the evidence is clear that grammar schools damage social mobility.”
What evidence has the Prime Minister got that the former Secretary of State is wrong in that?
The evidence is that for the poorest children, the attainment gap in a selective school is virtually zero. That tells us the quality of the education that they are getting. What I want is a diverse education system where there are genuine opportunities for all to have the education that is right for them. That is why in the Budget, as well as dealing with the issue of new school places, we have put extra money into technical education for young people for whom technical education is right. The right hon. Gentleman says that he wants opportunities for all children, and he says that he wants good school places for all children. He should jolly well support the policies that we are putting forward.
It is not just the former Education Secretary; the Chair of the Education Committee also says that grammar schools
“do little to help social mobility”
and are an “unnecessary distraction”. The Prime Minister and her Government are betraying a generation of young people by cutting the funding for every child. Children will have fewer teachers, larger classes and fewer subjects to choose from, and all the Prime Minister can do is to focus on her grammar school vanity project, which can only ever benefit a few children. Is the Prime Minister content for the generation in our schools today to see their schools decline, their subject choices diminish and their life chances held back by decisions of her Government?
Protected school funding, more teachers in our schools, more teachers with first-class degrees in our schools, more children in good or outstanding schools—it is not a vanity project to want every child in this country to have a good school place. That is how they will get on in life, and that is what this party will deliver. But this shows that there is a difference between the right hon. Gentleman and me. Earlier this week, he recorded a video calling for unity. He called for Labour to
“think of our people first. Think of our movement first. Think of the party first.”
That is the difference between him and me: Labour puts the party first; we put the country first.
I am extremely grateful to the hon. Gentleman, but I did do that a couple of days ago.
I did not have that opportunity a couple of days ago, so I am happy to join my hon. Friend in wishing Dame Vera Lynn a very happy 100th birthday this week. It is right that we recognise the service that she gave to this country, as many others did.
My hon. Friend raises the important issue of transport links in Kent, which I have discussed with him and other Kent MPs on a number of occasions. In addition to the M20 lorry park, I assure him that the Department for Transport is fully committed to delivering a long-term solution as quickly as possible. It is currently considering the findings of the lower Thames crossing consultation, and Highways England will be doing more detailed work on the A2. The Home Office will be looking very closely at what measures need to be in place for Brexit for those coming across the border into Dover.
May I begin by extending condolences, as the Prime Minister and the leader of the Labour party have done, to the family, friends and colleagues of the former Deputy First Minister of Northern Ireland, Martin McGuinness? We pay tribute to his contribution towards peace, while never forgetting the terrible human price during the troubles.
Last year, the Prime Minister promised that she would secure a UK-wide agreement between the Governments of Scotland, Wales and Northern Ireland, and her Government, before triggering article 50 on Brexit. Since then she has delayed, she has blocked, she has been intransigent and she has lectured—surprise, surprise; she has no agreement. There is no agreement. Will those be her negotiating tactics with the European Union?
Over the past few months, every effort has been put in, at various ministerial and official levels, to work with all the devolved Administrations to identify their particular concerns and interests, and to ensure that we are able to take those into account throughout the negotiating process. Discussions will continue in the future. What we want to ensure is that we get the best possible deal when we leave the European Union for all the people of the United Kingdom, including the people of Scotland, because at heart we are one people.
Viewers will note that the Prime Minister totally glossed over the fact that she has reached no agreement with the devolved Governments of the United Kingdom. The Prime Minister says that she wants article 50 negotiations to lead to a deal and people to know the outcome of that deal before it is approved. Will she confirm that in the period for an agreement, the House of Commons will have a choice, the House of Lords will have a choice, the European Parliament will have a choice and 27 member states of the European Union will have a choice? If it is right for all of them to have a choice about Scotland’s future, why should the people of Scotland not have a choice about their own future?
This is not a question about whether the people of Scotland should have a choice about the future—[Hon. Members: “Yes, it is.”] The people of Scotland exercised their right to self-determination and voted in 2014 to remain a part of the United Kingdom. The people of the United Kingdom voted last year to leave the European Union. We are respecting both those votes; the right hon. Gentleman is respecting neither of them.
I recognise the passion with which my hon. Friend always raises issues about the armed forces. He raises an important point, but I can assure him that we are fully committed to our goal of an 82,000-strong Army by 2020. On his specific point about service accommodation, we want to ensure that people have a greater choice in where they live by using private accommodation and meeting their aspirations for home ownership. That is why we set up the £200 million forces Help to Buy scheme and continue to support subsidised housing for service personnel—the pot of money will not be cut. The Ministry of Defence is working with the Treasury on the issues my hon. Friend raises, and I am sure that they will keep him updated.
If the hon. Gentleman is looking at issues around economic growth—he cited figures on growth—he should pay attention to the most important market for Scotland: the market of the United Kingdom. That is why Scotland should remain part of it.
My hon. Friend raises an important point, and I commend him and my hon. Friend the Member for Chippenham (Michelle Donelan) for the attention that the House is now giving to the issue. He is right that we need to raise awareness, but we also need to ensure that early diagnosis and treatment is available, because that is the best way of limiting the complications from this particular disease. The Department of Health is already taking steps. Clinical guidelines are being updated and enhanced by the National Institute for Health and Care Excellence, and NHS England has undertaken robust reviews on diagnosis, testing and treatment. However, there is more that we can do, so Public Health England is holding regular medical training days and conducting outreach across the medical community to raise awareness and ensure that that early diagnosis is in place.
I can assure the hon. Gentleman that we are working on the tobacco control plan and that one will be issued in due course.
My ministerial colleagues and I were delighted to be able to take the opportunity to visit the beautiful county of Cumbria, and we are even happier now that Cumbria has another strong voice in the form of my hon. Friend the Member for Copeland (Trudy Harrison), a Conservative MP.
My hon. Friend the Member for Carlisle (John Stevenson) is right: Cumbria and the north-west have huge industrial potential. That is why we are getting on with delivering our investment plans throughout the country, including the north-west. Let me give the House some figures: £556 million has been allocated from the local growth fund to boost local productivity; and the north is getting £147 million to tackle congestion and improve local transport. However, it is our plan for Britain that will deliver that stronger, fairer economy and those higher-paid, higher-skilled jobs for people throughout the country.
I responded to that point earlier, but let me just reiterate what I said. Across the House, for many years, there has been a general acceptance that the current funding formula for schools is unfair, and that is why this Government are seeking a fairer formula. A consultation exercise is taking place, and the Department for Education will respond to it in due course. We are grasping this issue, whereas Labour did nothing for 13 years.
The Palace of Westminster is world-renowned. It is a very important part of our national heritage, and it belongs to the United Kingdom. Of course, we also have a responsibility to our constituents to preserve this place as the home of our democracy. It will be for Parliament to make the final decision, but I assure my hon. Friend that, as this will be a House matter, there will be a free vote.
The hon. Gentleman speaks up well for his constituents. We all recognise the problems relating to air quality. The Government will present further proposals, but some changes have already taken place. We have invested in green transport initiatives, and plans to introduce clean zones around the country will help to tackle the problem. In fact, we have been at the forefront of action in Europe in dealing with some aspects of it. However, I accept that there is more to be done, and, as I have said, we will present further proposals in due course.
My hon. Friend raises an important point, which I know is a source of much frustration to many rail passengers. I thank him and others for the way in which they have spoken up on behalf of passengers, especially those using lines such as Thameslink and Southern. The best way to ensure that the operators do not profit from unclaimed compensation is for passengers to claim the compensation that they are entitled to. The Department for Transport is looking at how we can ensure that we publicise compensation schemes and make claims easier. We are rolling out improved Delay Repay compensation to allow passengers to claim after a delay of just 15 minutes. The Department is continuing to look at this issue, and I am sure it will pick up the points that my hon. Friend has raised.
The hon. Gentleman asks me to respond to something that is a party matter, but I can assure him that the Conservative party did campaign in 2015 across the country for the return of a Conservative Government, and we should be clear that such campaigning would be part of the party’s national return, not candidates’ local return, as the Electoral Commission itself has said. The party accepted in April 2016 that it had made an administrative error on its national spending. It brought that to the attention of the Electoral Commission in order to amend its national return. As I have said, national electoral spending is a question for the national party, not individual Members. The Electoral Commission has looked into these issues, as it has with issues for the Liberal Democrats and the Labour party. It has issued fines to all three parties, and those fines will be paid.
The International Trade Committee has been taking evidence about exports from chambers of commerce this morning. Given the Prime Minister’s commitment to a global Britain, does she agree that we can maintain good relations with our European friends as we leave the European Union and also build on our long-standing relationships with our Commonwealth friends across the world to trade our way to greater prosperity?
One of the four pillars of our plan for Britain is a global Britain—that more outward-looking Britain. My hon. Friend is right that this is not just a question of ensuring that we get the right relationship with Europe when we leave the EU. We do want to continue to have a partnership—to be able to trade freely across Europe, and for companies in EU member states to trade with us—but we also want to enhance and improve our arrangements for trade with other parts of the world, including members of the Commonwealth.
The issue of housing in the London Borough of Merton is one that the hon. Lady and I worked on many years ago when we were on the borough’s housing committee together. I recognise that she has raised a concern about a particular constituent. Obviously I will not comment on that individual case, but I will say is that it is important that, overall, the Government are dealing with the issue of homelessness. We are ensuring that we are building more homes and giving more support to people to get into their own homes, but this will take time as we make sure that those properties are available and that we maintain our record of providing housing support across all types of housing in this country.
As the Prime Minister has already said, it must be right that the same pupils with the same characteristics should attract the same amount of money. The unfairness in the system was not challenged for 13 years under Labour. Yes, there might need to be changes to the current draft formula, but I hope that she will commit to fulfilling our manifesto promise to make school funding fairer. I think she would agree that if the Labour Government had carried on in office, their spending plans would have led to what has happened in Greece and Spain, where not just hundreds but tens of thousands of teachers have had to be fired.
My right hon. Friend is right. As I said earlier, the issue of the funding formula for schools was ducked for too long—it was certainly ducked by the last Labour Government. We have started to address it: we have been looking at the formula, and we have brought forward a proposal. We will look at the consultation responses and respond in due course. She is also absolutely right about the Labour party. Its education policies would mean fewer opportunities in schools, and its economic policy would mean less funding for schools.
Last week, the Prime Minister’s Government confirmed that there had been no assessment of the economic impact of a failure to strike a trade deal with the EU before Brexit. Is it not the case that, in triggering article 50 next week, she is the modern-day equivalent of Lord Cardigan, the military commander responsible for the charge of the Light Brigade? We all know how that ended.
In triggering article 50 next week, what I am doing is responding to the wishes of the British people.
Does the Prime Minister agree that we urgently need to find a solution to the impact of the national living wage on sleeping shifts in the care sector? This, together with the policy of Her Majesty’s Revenue and Customs of insisting on the payment of six years’ back pay, plus penalties, could have a devastating impact on this vitally important sector.
My hon. Friend raises an important point. Through the national living wage, we are giving Britain a pay rise and making sure that pay is fair in all sectors, including social care. On his specific point, we are looking at that issue carefully, including in the context of funding pressures on social care. We are working to ensure that enforcement protects low-paid workers in a fair and proportionate manner. As my right hon. Friend the Chancellor announced in the Budget, £2 billion of extra money is going into the social care sector, but the specific issue that my hon. Friend raises is being carefully looked at by the Treasury.
Despite austerity, shocking pay increases were awarded to the board of the Liverpool clinical commissioning group, with a lay deputy chair now being paid more than £100,000 following a 43% increase. Will the Prime Minister agree to investigate the failures of governance within the CCG and the lack of scrutiny within the wider Liverpool health economy, and ensure that no mergers take place while those matters are being investigated?
I understand that my right hon. Friend the Health Secretary has asked NHS England to investigate the remuneration of non-executive directors at Liverpool CCG, and I am sure that he will keep the hon. Lady updated. We want to make the NHS even more efficient so that every possible penny can be spent on frontline patient care, and I am pleased to say that we are seeing results. The financial position has improved by £1.3 billion compared with this time last year, with 44 fewer trusts in deficit. As I say, NHS England is investigating the issue that the hon. Lady has raised.
The Prime Minister will be aware that the Jo Cox Commission on Loneliness is calling us all to action to highlight and tackle loneliness. In Northumberland, Forward Assist, a small charity of which I am a patron, is taking up this challenge, working with female military veterans who are suffering from severe isolation issues. Will the Prime Minister meet me and some of those extraordinary women to learn about how our Government can help to avoid this outcome in the future?
I commend the work that is being done by Forward Assist in my hon. Friend’s constituency. It sounds like a valuable project that is doing important work. The Secretary of State for Defence will be happy to meet her.
The Schools Minister has been good enough to agree to meet Erdington headteachers tomorrow. The constituency is rich in talent, but it is one of the poorest in the country. Some 96% of Birmingham’s schools will lose a total of £20 million under the Government’s fair funding formula, yet Surrey gains £17 million, Suffolk gains £10 million, and Windsor and Maidenhead gains £300,000. How can that possibly be fair?
I note that the Schools Minister will be meeting the hon. Gentleman and headteachers to discuss the issue. The fair funding formula is about trying to ensure that the unfair funding that has existed up until now is actually dealt with. There are some very, very stark differences. There are schools in London, for example, that get almost twice the funding of those in other parts of the country. We need to ensure that we address the unfairness in the funding formula but, as I said earlier, there is a consultation exercise and the Department for Education will respond in due course.
(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on recent changes to aviation security.
The safety and security of the travelling public will always be our paramount concern, and this Government will not hesitate in putting in place any measures that we believe are necessary, effective and proportionate. That why we took the decision yesterday to step up some of our aviation security measures in response to potential threats, as set out in a written statement yesterday afternoon.
The new measures will be applied to all inbound direct flights to the United Kingdom from Turkey, Lebanon, Jordan, Egypt, Tunisia and Saudi Arabia. We have explained the decision at all levels with our partners in the region. We have also spoken to European partners with significant interests in aviation, such as Germany and France, and partners elsewhere whose travellers and carriers may be affected. The House will be aware that the United States Government made a similar announcement shortly before ours regarding flights to the United States, and we have been in close contact with them to fully understand their position. While the UK has some of the most robust aviation security measures in the world, we can never be complacent. That is why we continue to work in conjunction with our international partners and the wider aviation industry to keep security under constant review and to ensure that new measures are introduced in a way that keeps the level of disruption that they may cause to passengers to a minimum.
Passengers boarding flights to the UK from the countries I have listed will not be allowed to take any phones, laptops or tablets larger than a normal-sized mobile phone. We have specified the maximum dimensions to assist both airlines and passengers: a length of 16 cm, a width of 9.3 cm, and a depth of 1.5 cm. Passengers are advised to take some simple steps at check-in to prepare by placing personal electronic devices into their hold luggage before going through central security. Normal cabin baggage restrictions will continue to apply. Passengers should check online with their airline or airport for further information. My Department is working round the clock with the industry to ensure that passengers get the information they need when and where they need it. While we will do everything we can to minimise the disruption to people’s journeys and we understand the frustration that may be caused, our top priority will always be to ensure that public safety is maintained.
These new measures are concerned with flights into the United Kingdom. The UK is not advising against flying to and from the affected countries, and those with imminent travel plans should contact their airline for further information—the Foreign and Commonwealth Office also publishes travel advice on its website. UK airports have been informed, and my officials have asked them to consider standing up their own contingency arrangements, should they be needed.
The whole House will recognise that we face a constantly evolving threat from terrorism and must respond accordingly to ensure the protection of the public against those who would do us harm. The changes we are making to our security measures are an important part of that process, and I assure the House that we will continue to work closely with airlines, airports and the wider travel industry over the coming weeks to ensure that passengers know what is expected of them. I ask for passengers’ patience as the new measures bed in.
I will continue to keep the House updated on developments.
This is a major change to our aviation security regulations and carries serious potential for delay and confusion for UK passengers.
First, will the Secretary of State explain why the UK and US bans were announced within hours of one another yet provide for different countries, different airlines and, in effect, different devices? The United Arab Emirates, Qatar, Kuwait and Morocco, for example, are all affected by the US ban but are not included in the UK ban. No US operator is affected, but six British airlines are. Size restrictions on electronic items differ between the two.
The Washington Post reports that US officials have been discussing new restrictions for more than a fortnight. When exactly did Ministers first learn of those potential changes? Does the Secretary of State agree that, to avoid passenger confusion and delay, efforts should be made to harmonise the bans? And for what specific reasons did he exclude fewer countries than the US?
Secondly, passengers presently booked to fly from one of the affected airports are unclear about what the ban will mean for them in practice. For the increasing number of passengers who fly on “hand baggage only” fares, what procedures have been put in place proactively to communicate changes before they turn up at security queues at a busy airport? Will UK passengers have to buy luggage in order to carry their electronic devices? What discussions has the Secretary of State had with insurers, who do not routinely cover electronics carried in the hold, and what assessment has he made of the security of affected airports against theft and damage to devices?
Thirdly, efficacy. Have the restrictions been introduced in response to a specific threat that differs in nature from the al-Shabaab attack on an aircraft out of Mogadishu, which took place more than a year ago and did not result in the loss of the aircraft? Have checks on such items been stepped up, in addition to changes to their placement on aircraft? And what evidence does the Secretary of State have that placing potentially problematic items in the hold is safer than placing them in the cabin, especially as potentially explosive devices, such as lithium-ion batteries, have been banned from hold luggage?
Aviation security is rightly under constant review. Can the Secretary of State assure us that all has been done to ensure that these regulations are effective, consistent and put the passenger first?
First, on aviation security, let me make it clear that we respond to the evolving threat we face from terrorists. There are some things that we make public, and there are others that we do not. I will not give the hon. Gentleman full details of the background to the decision, which we took in response to an evolving threat—he would not expect me to do that. Suffice it to say to the House that we have taken these steps for good reason.
On the difference between the approaches of the United Kingdom and the United States; the approach of the United States is a matter for them. As would be expected, we have considered all the evolving information before us to reach a decision about what we believe is in the interest of the United Kingdom and the protection of our citizens.
The hon. Gentleman asked why the measure does not affect US operators, and the answer is that they do not currently fly to the affected destinations; other airlines do. We have applied our change to the requirements to all airlines, both UK and non-UK, that fly the affected routes. On the question of timing, we keep the matter under constant review and have done so for some time. We have taken this decision because we believe it is the right one to take against the background of the evolving threat.
The hon. Gentleman asked about people travelling with hand baggage only. That is very much a matter for the airlines to resolve. We have been in detailed discussions with them in recent days, and they are now preparing to implement this new change. It will be for individual airlines to establish exactly how to handle passengers who are booked on hand baggage-only tickets. I will write today to the Association of British Insurers to ask it to be mindful of this issue. The hon. Gentleman made an important point about the risk of theft, and we will ask the insurance industry to be careful to be mindful of and realistic about this. We have taken this decision in a way that we believe is necessary to protect the safety of UK passengers, but the hon. Gentleman will forgive me and understand if I say that the background to every decision of this kind that we take is inevitably based on matters that we cannot automatically put into the public arena.
I have just returned from a Conservative Middle East Council trip to Egypt, where we were able to see the devastating effect to the local economy in Sharm el-Sheikh of the continuing ban on flights to that region. We also met the President and heard first-hand from the Egyptians their concerns that they are being singled out in some way; that may be the reaction of other allies who are being named today. Will my right hon. Friend commit to discussing with other Ministers a diplomatic offensive to go to these countries to explain to them why these actions are being taken and that they are not being singled out? Will he also liaise with the Secretary of State for International Development to provide some extra assistance to the airports in these countries? The change will cause further disruption to travellers, and some airports simply do not have the capacity to introduce a new security measure.
I can give my right hon. Friend a categorical assurance that we are already in dialogue with the countries and that we will take great care to ensure that we do everything we can to help at the other end, in their airports. We already co-operate closely. To be absolutely clear, this is not a question of singling out countries; we would never embark on such a process. The decisions are taken purely and simply on the basis of what we believe the risks are and where we believe we need to take steps to protect United Kingdom citizens. It is no more and no less than that.
Safety must, of course, be the top priority, but there really are still too many loose ends. Do the Government have evidence that the security risk to flights from the countries listed by the Secretary of State is greater than the risk from flights from other countries? If not, why are flights from these countries alone being targeted for action? Why have the UK and the USA apparently reached different conclusions—I assume, from the same intelligence—about the countries from which in-cabin electronics present the greatest risk, or are the differences between the two lists about something other than intelligence?
If the presence of electronics on aircraft flying from the countries listed is the security threat Ministers believe it to be, why are there no restrictions on electronics in the hold baggage from those countries? What thought has been given to people carrying electronics on board who change planes in countries not affected by the measures? What liaison has there been with the countries listed, with countries not listed and with airlines, all of whose confidence and co-operation will be crucial to the effectiveness or otherwise of the measures? What action is the Secretary of State taking to ensure that passengers get the clearest information possible about what they are and are not allowed to take on board to ensure that delays to journeys are minimised?
As I said at the outset, safety has to be our top priority, but there really are too many loose ends. If there really are clear security grounds for the restrictions, the Secretary of State has to be clearer about what those grounds are, otherwise the UK and US Governments will remain open to the suspicion that they are unreasonably singling out particular countries in the middle east and north Africa, rather than properly thinking through which precautions can actually keep flights safe from terrorism, wherever the aircraft fly from.
I take a little bit of issue with that last point. The Labour party was in power for 13 years, and the hon. Gentleman’s Front-Bench predecessors well understood that there are things that we cannot set out in public that lie behind the decisions we take in the interests of passengers. That has not changed throughout all the years in which each of our parties has been in office. I understand his desire for information, but the reality is that there is an evolving security threat to aircraft, and we take decisions as and when we believe it is necessary to do so to protect our citizens. I am very clear that this is nothing to do with singling out countries or destinations. The decisions we take are based purely and simply on an evolving security threat, and on what we believe is the right way to protect United Kingdom citizens. The United States Administration will take decisions about how they believe they should best protect their citizens. We do not always have to take exactly the same decisions on behalf of both our countries. We have done what we think is right for the United Kingdom.
The hon. Gentleman raised a couple of other points, including transfer passengers. The rules will apply to transfer passengers. As is normally the case now, transfer passengers will go through a further central security check and will be subject to the same at-gate checks. If they have a laptop, tablet, or large or oversized phone with them, it will be placed in the aircraft’s hold. The individual airlines are working, with our support, on providing the best possible information to passengers, as will the Foreign Office and various Government agencies that can play a role, but our first and foremost priority in response to an evolving security threat is to ensure that we provide the best possible protection for our citizens.
Why are they safer in the hold?
I hate to be disingenuous to my right hon. Friend by repeating answers but, as I said, I cannot discuss the detail of that evolving security threat. We have taken what we believe is the right decision in the interests of protecting our citizens.
We cannot second-guess the security intelligence that the Government have received. The safety and security of our citizens are the primary concerns of the Scottish National party and the Scottish Government, who will work closely with the UK Government to ensure that appropriate and proportionate measures are in place. First, I ask the Secretary of State what discussions have taken place with Scottish Government Ministers, and did those discussions include a commitment to keep them and Transport Scotland up to date with developing events? Secondly, will some kind of mitigation or compensation be put in place for those who may face extra charges as a result of having booked flights with just hand baggage previously? Finally, what additional resources, if required, will be made available to UK airports to take forward the measures?
On the latter point, the impact on UK airports is not immediate because the new rules do not apply to UK airports, but we have asked UK airports to think ahead practically in case matters change in the future. The aviation Minister and officials were in contact with the Scottish Government yesterday. I believe that the Scottish Minister and the aviation Minister have yet to be able to fix a time to speak, but intend to do so today. We will keep the Scottish Government informed. With regards to people who have booked hand baggage only and who may be affected, we have been in discussions with the airlines and we hope, believe and expect that they will work a system that ensures people are not worse off as a result of the changes.
I commend my right hon. Friend for ensuring the paramount importance of our national security and the safety of British citizens travelling. As Gatwick airport is in my constituency, I am also grateful to him for talking with the airport authorities and tour operators in my area. May I seek assurances that he will continue to keep them involved as this evolving situation develops?
I can give my hon. Friend that absolute guarantee. We are talking extensively to the whole industry. It is very much my hope that we will not end up having to take further steps, but we need to be constantly mindful of the evolving security threat. The security and safety of British passengers will always be absolutely at the top of our priority list.
I am reassured that security is paramount, and it must remain so, but will the Secretary of State please clarify exactly how passengers will know which arrangements they have to make for individual journeys? Is he still looking at the situation in overseas airports where it is known that there are security concerns?
We have a widespread effort to make sure we provide protection to our citizens, both in the UK and in other countries. We do extensive security liaison work with other countries, including in the region affected. I am very grateful to all the countries we work with for the co-operation and support they provide us with in this important work. It is in all our interests that we continue to maintain aviation and tourist flows and to provide the economic benefits to all parties that good aviation brings. We will do everything we can to work with those partners to make sure we have as safe an aviation sector as we can.
We all accept that circumstances change and threats will change over time. Is there a time limit to these changes? Is there a specific date when they will be reviewed?
On time limits, the change will be implemented from now by the airlines; they are being asked to have the changes in place within a very short period. Clearly, they will have a job to do, as we will, to communicate to people who are returning and will be affected by this. The airlines are very seized of the need to do that well. We all hope that these are temporary measures, but we will keep this under review and we will keep them in place for as long as they are necessary to secure the safety of our passengers.
I accept that the Secretary of State may not be able to answer these two questions, but why does this measure apply only to direct flights? Are other countries under active consideration in terms of being added to the list?
All I can say in response is that we keep these issues under constant review. We believe the decisions we have taken this week are the right ones in the face of the evolving terrorist threat.
I thank the Secretary of State for his update. Many of my constituents work at National Air Traffic Services and my constituency is host to Southampton airport. How will the communications start in respect of journeys from regional airports?
It will be very much the responsibility of the airlines to explain this, and we will provide them with whatever support we can. I extend my thanks to all those people in the UK airlines, and indeed in international airlines, with whom my Department has been working in the past few days. They have been enormously helpful and co-operative on what is a difficult change for them, and we should all be grateful to them.
May I ask the Secretary of State about flights from this country? Is he confident that if a terrorist were to try to get a laptop or an iPad on to a plane here, that would be detected, and that there is no chance of their getting it through our security?
Our airports and our security industry are among the best—if not the best—in the world. We should be proud of how well our airports are protected. The decisions we take are based, and those we take in the future will be based, on our assessment of what is necessary at any time. Our judgment is that the changes we are making today are what is necessary at this moment in time, given the evolving threat.
My right hon. Friend is absolutely right when he says that security must be the Government’s top priority, and this is something I am sure people will feel comfortable with in the long run. He mentioned minimising disruption and frustration for passengers. What discussions has he had with Home Office counterparts at Border Force to minimise disruption, given that only five of Gatwick’s many scanners working were working on Monday?
It is disappointing if there has been a temporary problem at the airport, but my recent experience of travelling through Gatwick has been that it is generally pretty good and so something must have gone wrong on that day. I know that all our airports and those in the Border Agency will endeavour to work with the airlines to try to make sure that any steps we take to address security issues are undertaken in a way that minimises to the maximum possible extent the impact on passengers.
The Secretary of State is absolutely right to take whatever measures are necessary to protect the public from the threat of terrorism. Further to the question put by the right hon. Member for East Devon (Sir Hugo Swire) on Egypt, the Secretary of State mentioned Tunisia, which has already been suffering because of the travel ban, and this measure will be an added burden on those travelling from Tunisia. If the Tunisian authorities ask the Government for assistance with the initiation of new scanner equipment, would we be willing to help them provide that kind of equipment?
I am grateful to the right hon. Gentleman for his supportive comments. First, we already provide extensive support and will continue to do so. The Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Bournemouth East (Mr Ellwood) is due to be visiting Tunisia in a couple of weeks’ time. We are already in contact with the Tunisians and with the Egyptians, and we will do what we can to help them, both with this issue and with related issues. None the less, we will always still put the safety of our citizens first.
Further to the point raised by my right hon. Friend the Member for East Devon (Sir Hugo Swire), about 100,000 people are employed in the tourist industry in Sharm el-Sheikh and they could lose their jobs if the flight ban continues. Does my right hon. Friend the Secretary of State consult other people I see sitting on the Treasury Bench to ensure that the impact that that degree of unemployment could have, including on the wider supply chain jobs and in leading to further radicalisation of people in South Sinai, is considered?
We have extensive conversations with the Egyptians and we have kept the situation in Sharm el-Sheikh under constant monitoring. My right hon. and hon. Friends in the Foreign and Commonwealth Office and in the Home Office have regular contacts and discussions about these issues, as does my Department. Fundamentally, although I would love to see us resume flights to Sharm el-Sheikh at the earliest opportunity, we can do so only at a point where we are confident about the security and safety of our own people. I have no doubt that as soon as we have that confidence we will want to try to resume those flights.
The Government are of course right to act swiftly in response to intelligence regarding terror threats, but a number of important questions remain. As the right hon. Member for Carshalton and Wallington (Tom Brake) noted, some passengers from the countries listed will change planes in third countries. What discussions has the Secretary of State had with his counterparts in other countries about the implementation of these restrictions for transfer passengers?
As of yesterday, when we took the decision, we had already had contacts at both ambassadorial and ministerial level in some places with our counterparts in other countries. They will each take their own decisions about what is necessary, but we are clear about what is right for our citizens. Those countries elsewhere in Europe and in the world will now be contemplating what the best steps are in terms of their own citizens.
As this is an evolving threat, will my right hon. Friend confirm that countries and airports could be added or removed from the list that the Government have published, should the British intelligence services so recommend?
Obviously, we will keep this and other security issues in relation to our aviation sector under review. We will take whatever steps are necessary to provide that protection. As I say, I hope that this new set of measures will prove to be temporary, but first and foremost our focus will be on the security and safety of our passengers. Therefore, that will be the deciding factor in what we do in the future.
The United States ban will be enforced by 7 am on Saturday, following 96 hours’ notice. The Secretary of State said that airlines here would implement this ban over a short period of time. Has he given airlines in the UK an indication of a firm deadline by which he expect full implementation of the UK ban?
We are expecting this to be implemented in the same timeframe.
I am sure that the Secretary of State would agree that on such a day the message should also be about reassuring people that threats are reacted to and passengers should not be panicking about these types of announcements. Will he outline what steps will be taken to reassure passengers as well as inform them of the work the Government are doing?
Let me make it clear again to the House today: we are not saying to people that they should not travel to these countries. We are not saying that they should cancel their flights. We are not saying that they should cancel their holidays. We want aviation to continue as normal and we are simply taking additional security measures to make sure that that aviation is safe for those people who travel. There is absolutely no change to Foreign Office travel advice and no change to our advice to people about where, how and when they should travel; this is purely about making sure that when they do travel they are safe.
The Secretary of State said that anyone who travels on a hand baggage-only ticket would not be charged or out of pocket, and that he would be encouraging the airlines, which would be responsible, to take the right course of action. Will he consider doing something further to make sure that nobody is charged for putting hand baggage in the hold?
We are in discussion with the airlines about this. But this measure is not about an inability to take hand baggage into the cabin. If someone arrives at the gate with one of these items in their bag, it will be put in the hold. This is not about saying that people cannot have hand baggage, although some people may choose to put all their hand baggage into the hold; it is simply about the device itself.
I am not seeking any information from the Secretary of State on the nature of the intelligence, but I am concerned about the implications of the ban on diplomatic relationships with valuable allies. I, too, have returned from Egypt, and if such security relationships are jeopardised, that will jeopardise the longer-term wider security of UK citizens.
That is precisely why these are difficult issues, and we will do everything we can to strengthen our partnerships with those nations. We are sending a very clear message that we are not saying to people, “As a result of this change, stop flying on those routes,” but saying, “You should probably have more confidence about flying on those routes, because the measures we are putting in place today should protect your safety, rather than have the opposite effect.”
I commend my hon. Friend the Member for Luton South (Mr Shuker) for asking this urgent question. We are approaching Easter, a time when many families, with many nervous flyers among them, will be taking flights. What reassurance can be given to families taking flights from other destinations—not the ones listed—that the terrorists will not just think that as they can no longer fly and use their laptops in an appalling and offensive way on these flights, they will go to another country that does not have a ban?
The reassurance I would give to those people is that we put in place such safety measures when we believe they are the right thing to do to protect their safety. We think this is the right way to address the issues that we have been considering, but I would say to people travelling from elsewhere that if we had had the same concerns, we would have acted more broadly. We have acted in the way that we think reflects the evolving terrorist threat. I hope that people generally will travel at Easter as normal, and those travelling on these routes can do so knowing that we have put in place additional safety measures to protect them.
Ministers are absolutely right to be uncompromising when it comes to passenger safety, but what consultation was carried out with the airlines before the regulations were made?
We have been in regular contact with the airlines in recent days, and we have talked to them about the implications of the change. I last had conversations with a number of the airlines yesterday afternoon, as did the aviation Minister, so we have been in regular contact with them.
I thank the Secretary of State very much for his statement. As everyone has said, security is paramount, and the measures are important and welcome. He has named six countries, but he will know that it is easy to move from country to country and that it may therefore be possible to bypass the new security systems. What consideration has been given to adding other countries to that list right away?
There are a range of ways in which we protect the security of passengers on flights to the United Kingdom. This is one part of a broader strategy that we have had in place for many years to provide such protection. We make changes when we judge them necessary in the face of the evolving threat, and we will of course continue to monitor the situation and make any further changes dictated by that evolving threat.
By default, the Government are saying that they do not trust the security arrangements that these countries have in place at their airports, and we are actually putting an extra onus on the airlines. What checks will the Government do to make sure that the new arrangements are successful and that people cannot actually still get electronic devices into the cabins of aeroplanes?
Let me absolutely clear: this new announcement is not a vote of no confidence in the security measures in any other country. The decision was specifically taken in response to an evolving security threat, and I do not want it to be seen as a thumbs down to the security arrangements available in any of the countries affected.
I will keep you on my Christmas card list for now, Mr Speaker.
I of course commend the Secretary of State for acting on the security information he has been given. However, I have been contacted by a constituent, Dr Ahmed Khan, who has previously experienced some unpleasant behaviour at airports when he has been travelling. Will the Secretary of State give an assurance to my constituent and other Muslim people around the UK, who may feel that this is another attack on their liberties at airports, that it is not such an attack and that they will be treated properly and with dignity as they travel through UK airports?
Let me also be clear about this point: in recent years, we have seen a whole range of horrendous terrorist events in which Christians, Muslims, Hindus, people of no faith and many others have died side by side. Our job is to protect every single citizen of the United Kingdom whatever their faith, and this is about protecting every single citizen of the United Kingdom whatever their faith.
Point of Order
On a point of order, Mr Speaker. I previously pointed out to the Leader of the House in business questions that both the Liberal Democrats and Labour have been fined for their conduct in the 2015 election. I drew attention to the fact that the Tories were also under investigation and that the Electoral Commission has expressed concerns that the capped fine limit means that fines are no longer a suitable deterrent. Basically, the Leader of the House was almost dismissive with a “how dare he raise that” response, and he stated that
“for Members of the Scottish National party to give lectures about good practice during election campaigning is a bit rich.”—[Official Report, 19 January 2017; Vol. 619, c. 1088.]
That implied that the SNP was possibly implicated as well. Now that the Tories have been fined a record £70,000, how can I make sure the record is correct: the SNP was the only major party not fined at the election, and our record number of MPs was returned without any financial shenanigans? How do I make the Leader of the House consider it worthwhile to make an apology?
I am grateful to the hon. Gentleman for his point of order and for his characteristic courtesy in giving me advance notice of his intention to raise it. What I would say to the hon. Gentleman is as follows: first, he has found his own salvation by putting what he regards as the facts of the matter on the record, where they will permanently reside, doubtless to the great delight of the hon. Gentleman and possibly of other people in Kilmarnock and Loudoun; and, secondly, when the hon. Gentleman asks what can be done to procure an apology from the Leader of the House, I fear that that may be a case of optimism triumphing over reality. I was in the Chamber at the time, and the Leader of the House is of course responsible for what he says, but I think the Leader of the House offered a robust response in the course of what might have been thought a knockabout exchange. I have always thought that the hon. Member for Kilmarnock and Loudoun (Alan Brown) was quite a steely fellow himself, but if I am in any sense mistaken on that front, may I commend to him the benefits of acquiring at least one of the characteristics of the rhinoceros? I am referring not of course to aesthetic beauty, but to notable resilience. We will leave it there for now.
If there are no further points of order, at any rate for now, we come to the presentation of a Bill. [Interruption.] Order. I am sure hon. Members are awaiting with anticipation and a degree of excitement the presentation of a Bill in the name of the right hon. Member for Leicester East (Keith Vaz).
Violent Crime (Sentences) Bill
Presentation and First Reading (Standing Order No. 57)
Keith Vaz presented a Bill to increase the minimum custodial sentence on conviction for possession of a knife or other offensive weapon for an offender aged 18 years or over and to increase the minimum period of detention and training order for a person aged 16 or 17; to set a minimum custodial sentence on conviction for an offender in possession of a knife or other weapon and intending to commit any offence or having such a weapon available to use in committing murder; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 12 May, and to be printed (Bill 160).
Terms of Withdrawal from the European Union (Referendum)
Motion for leave to bring in a Bill (Standing Order No. 23)
I beg to move,
That leave be given to bring in a Bill to make provision for the holding of a referendum in the United Kingdom and Gibraltar on the proposed terms for the United Kingdom to leave the European Union; and for connected purposes.
On 23 June 2016, a narrow majority voted for the UK to leave the European Union. I deeply regret that outcome, but I am a democrat, and I accept it. However, a week from today, the divorce proceedings will begin, and the country now faces a greater period of uncertainty than most of us have ever experienced. One thing is for certain: democracy did not end at 10 pm on 23 June last year.
Not long ago, the Secretary of State for Exiting the European Union himself made the case very eloquently for what is now the proposal of the Liberal Democrats and others. He referred to a first “mandate referendum” and a second “decision referendum”, and said:
“The aim of this strategy is to give the British people the final say, but it is also to massively reinforce the legitimacy and negotiating power of the British negotiating team.”
I could not agree with him more; it is a great shame that he does not agree with himself anymore.
Last week, in rejecting a second referendum on independence for Scotland, the Prime Minister said:
“I think it wouldn’t be fair to the people of Scotland because they’re being asked to make a crucial decision without all the necessary information—without knowing what the future partnership would be, or what the alternative of an independent Scotland would look like.”
She is now asking the people of the United Kingdom as a whole to proceed to forge a relationship with the rest of Europe, and, indeed, the world, on exactly that basis—on the basis of a decision taken last June
“without all the necessary information—without knowing what the future partnership would be”.
The Secretary of State’s original case stands: we started this process last June with democracy, so we must end it with democracy, too. I accept that we have had our “mandate referendum”, in which the British people voted to leave, but voting for departure is not the same as voting for a destination. The Government should now give the British people a “decision referendum”, to be held when the EU negotiation is concluded, so that the British people have all the necessary information and know what our future partnership will be, because it is the people who are sovereign in this country. The people can and must have their say over what comes next, and this Bill would enshrine in law their right to do so.
Last week, when debating even the right of Parliament to have the final say on the Brexit deal, the Government displayed ludicrous inconsistency and double standards. The Brexiteers asked us to “take back control”, yet the first thing they do is undermine the principle of democratic accountability in our Parliament by refusing even to allow a meaningful vote in this House. The detail, or even the general nature, of the deal that the Government may reach with the European Union is currently completely unknown—a mystery to us and to them—yet the British people are now told that they must simply shrug and accept any old deal, irrespective of its content or quality. When the deal is done, it will be signed off by someone. The only question is, who? Will it be the politicians, or will it be the people?
My party believes that the deal should be signed off by the people. No plans, no instructions, no prospectus and no vision were offered to voters by the leave campaign. With respect, I did not agree with the case for Scottish independence put forward by the right hon. Member for Gordon (Alex Salmond) in 2014. But, credit where credit is due: there was a 670-page prospectus of what Scotland outside the United Kingdom would look like. The leavers did not present the British people with such a prospectus; all they gave us was a lie on the side of a bus—hardly comparable. The pro-independence campaign in Scotland presented the Scottish people with not just the option of departure but the option of destination. Of course, the Scottish people voted against both the departure and the destination, but had the result gone the other way, there would have been no need to hold a people’s vote on the final deal on independence from the United Kingdom.
I still believe it is absolutely impossible for the Government to negotiate a better deal with Europe than the one we currently have as a member of the European Union. Nevertheless, the negotiations will happen and a deal will be reached. Surely the only right and logical step to take is to allow the people to decide whether it is the right deal for them, their families, their jobs and their country.
No one knows what the final deal will look like, but we do know that the Prime Minister has already given up on the United Kingdom’s membership of the single market, without even putting up a fight. In January, after months of saying that Brexit means Brexit, she finally came clean: Brexit means jumping out of the single market—the world’s biggest marketplace—with all the consequences that will have for people’s jobs and our economy. The Prime Minister is entitled to make that choice, but let us be absolutely clear: it is a choice. That is one of the reasons I was so astounded that the right hon. Member for Islington North (Jeremy Corbyn) and many in his party—although not all, of course—made the decision to vote with the Government on article 50. This House did not vote to enact the will of the people; this House voted, if we are to be generous, to interpret the will of the people.
Just like the Conservative party in its 2015 manifesto, I passionately believe that ending our membership of the world’s biggest free market will do untold damage to this country. It is vital for our economy, which is why my party and others refuse to stop making the case that the deal must include membership of the single market. The Prime Minister had the choice to pursue a form of Brexit that united our country, reflected the closeness of the vote and sought to heal the divisions between leave and remain. She could have fought to keep us in the single market, if she wanted to; she has chosen not to. She is pulling us out before the negotiations have even begun. Yes, the British people chose Brexit, narrowly, but nobody voted for the severance, irrelevance and decline that an unforced exit from the single market will bring. It is this Conservative Government who have chosen this Brexit.
The referendum vote does not give the Government a mandate for absolute severance from Europe. For 40 years now, the anti-European crowd have been saying words to the effect of, “Well, in 1975 I voted to be in the common market; I didn’t vote to be in the European Union.” Now, we turn that completely on its head, because in June people narrowly voted to leave the European Union, but no one voted to leave the Common Market—they simply were not asked. Nor did they vote to place a question mark over the status of their friends, neighbours and loved ones who happened to be born in another part of the European Union. The inaction of the Government and their unwillingness to guarantee the rights of millions of EU citizens living here is shameful; it is absolutely contrary to the British values of openness and tolerance to refuse to do so.
With this Bill, I am seeking to reinforce and strengthen the will of the people—to allow them to exercise their democratic right and duties by giving them a choice about what we and our children will have to live with for generations to come. They would be able either to accept the deal the Government achieve, or to say “Thanks, but no thanks” and opt to remain in the European Union. The gate has been opened and the direction is set, but the only way to achieve democracy and closure for both leave and remain voters is for there to be a vote at the end. If the Prime Minister is so confident that what she is planning to do is what people voted for, why not give them a vote on the final deal? What is she scared of? What started with democracy cannot end with a stitch up. The deal must not be merely rubber-stamped by politicians: it must be agreed by the people.
Question put and agreed to.
That Tim Farron, Mr Nick Clegg, Tom Brake, Mr Alistair Carmichael, Norman Lamb, Greg Mulholland, Sarah Olney, Mr Mark Williams, Heidi Alexander, Geraint Davies, Caroline Lucas and Jonathan Edwards present the Bill.
Tim Farron accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 12 May, and to be printed (Bill 161).
Pension Schemes Bill [Lords] (Programme) (No. 2)
That the Order of 30 January 2017 (Pension Schemes Bill [Lords] (Programme)) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the Motion for this Order.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.—(Christopher Pincher.)
Pension Schemes Bill [Lords]
Consideration of Bill, as amended in the Public Bill Committee.
New Clause 1
Funder of the last resort
“Notwithstanding the provisions of section 8, the Secretary of State shall make provision for a funder of last resort, to manage any cases where the Master Trust has insufficient resources to meet the cost of complying with subsection (3)(b) of that section.”—(Alex Cunningham.)
This new clause ensures that the Secretary of State will make provisions for a last resort if a Master Trust were to face difficulty.
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.
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—
(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.
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.
I turn to the self-employed, about whom the Government have recently had a lot to say—although I note that they have gone quiet about them in the past week. I wonder why. I was, however, pleased to hear the Minister confirm that self-employed people are included in his review. Similarly, it is good that those with multiple jobs are being included. I was interested in the Minister’s point in Committee that those earning more than £6,000 could access master trust savings and would be provided with the same support from their employer and tax incentives. Will the Minister perhaps write to me or address the House today clarifying the policy on this point? What are the Government doing to ensure that all eligible people are aware of this particular right under the law?
Those on low incomes will need to be addressed. I hope that the Government will go further than merely freezing the trigger threshold, as appears to be their current approach, and lower it to ensure that many more people are included in master trust saving.
I met representatives of Royal London last week and they asked why every pound earned is not taken into account for employee and employer contributions. Will the Minister also add that issue to his review? Share Action has also contacted me about auto-enrolment, saying
“that many employees are saving at the minimum level and show little interest of emotional connection to their workplace pension fund, and therefore we believe the second phase of auto-enrolment needs to be focused on governance, choice and communication, getting people personally engaged with their pension savings”.
Does the Minister agree?
Given the Minister’s responses on the expansion of eligibility for auto-enrolment, I fail to see why the Government would not accept the new clause. Should the Minister be committed to enfranchising these excluded groups into master trust savings? Why not make that intention clear in the Bill today?
I now turn to amendment 1, which applies not only to the Bill but to the whole industry: it is about transparency. Opening the Second Reading debate on the Bill, the Secretary of State said:
“Transparency is a key area. Hidden costs and charges often erode savers’ pensions. We are committed to giving members sight of all the costs that affect their pension savings.”—[Official Report, 30 January 2017; Vol. 620, c. 756.]
On that, the Secretary of State and I agree. I am pleased that he has put on the public record the fact that costs erode savers’ pensions. That is the line within the 2015 Dutch central bank report, which said:
“Investment costs are an important determinant of pension fund performance. High investment costs can significantly impact beneficiaries’ wealth and consumption, as they reduce the net rate of return on investments and subsequently raise the costs of providing pensions.”
Despite the Secretary of State’s statement and that of the Dutch central bank, the Government have resisted any attempt to do something about the situation, always promising that something will or may be done, but never doing very much.
The Government hide behind the issue of complexity, but they have already negotiated with the Investment Association the tools to deal with that. The only area of pension funds that is ready to be analysed is those used by the local government pension scheme. The cost data are due to be collected this year by the scheme advisory board and endorsed by the Minister to ensure that they are delivering best value for sponsors and members alike.
The architecture to get, analyse and present the data is the same process of discussion with a view to being built and will form a platform from which other projects, including the value for money analysis needed for all workplace pensions, and that can be delivered. I believe that the Minister is a fan of this work, too, so I would hope that he and his Government would recognise that the easiest and most efficient way of ensuring that data for master trusts are collected is to adopt the LGPS-Investment Association cost template. That, after all, has been sanctioned by the Department for Communities and Local Government and the data points agreed with the Investment Association members, who in the main will be the same suppliers of asset management to the LGPS and master trusts.
The amendment’s purpose is to lay down the reporting obligations of master trusts. At the moment, they will report only on administration and asset management fees. All that the amendment requires is the additional reporting of the implicit costs, which could be found by using the LGPS template. The only obstruction to this process is the Government. The situation is contradictory: why have this arrangement in one section of our pension system and not in another? The Government are holding back scheme members from getting the best value. Employers, master trusts and independent governance committees cannot deliver under the current arrangements. There is nothing simpler than setting out a requirement for the reporting of explicit and implicit costs; it is the will to introduce the process that is the problem.
Members must be able to discern the impact of trading on their funds. In Committee, the Minister said:
“the bit of the FCA review that the hon. Members for Stockton North and for Ross, Skye and Lochaber mentioned in fact makes the point not that active fund managers have more costs, but that over a period of time there is not much difference in returns.”—[Official Report, Pension Schemes Public Bill Committee, 7 February 2017; c. 55.]
However, the FCA actually reported that it was comparing
“the net return on a £20,000 investment over 20 years to show the impact of charges. Assuming, for illustrative purposes, that both funds earn the same return before charges (the average FTSE all share growth), an investor in a typical low cost passive fund would earn £9,455 more on a £20,000 investment”—
an improvement of 24.8%—
“than an investor in a typical active fund, and this number could rise to £14,439”—
an increase of 44.4%—
“once transaction costs have been taken into account.”
The FCA’s evidence is clear: investing in a low-cost passive fund delivers more return than investing in an active fund. That is why it is so important to change the reporting requirements of master trusts. We can look to the Netherlands experience: it is a requirement that all Dutch pension funds report on administration, fund management and transactions. The Society of Pension Professionals agrees with us that
“the key is to make sure that the information given to consumers is sufficient to empower them, and provide customers with simple and objective comparisons to enable them to choose the best products and providers”.
The amendment would help the Government, master trusts and, most importantly, scheme members to match the best model in practice reporting.
Amendment 2 would also increase transparency and ensure that members are properly informed—in this case, if a triggering event affecting their pension is in place. In Committee, the Minister replied to the amendment with the assumption that members are passive recipients of the process. He said:
“Remember, many members do not take an active decision to join; they join through their employer. They are not actively engaged in the scheme; their employer is the conduit”.—[Official Report, Pension Schemes Public Bill Committee, 7 February 2017; c. 63.]
Such a paternalistic approach does our citizens a disservice. The Government reject all attempts to reform the Bill to make it more member-focused. That approach labels members as passive recipients, not engaged participants. The Government’s policy is to place responsibility on the individual to take care of their pension provision, yet they seem to be standing in the way of members being given the information and representation that would allow them to make informed decisions. Why is the Government’s policy so contradictory?
The member’s pension pot is theirs, not the employers, so they should, by rights, have natural justice and be informed. In the amendment, we simply seek to ensure that the information on triggering events flows through the communication chain when those events happen, and if and when they are resolved. If members found out only at second hand that such an event had happened—an event that affected their hard-earned cash—that would be bound to result in lower levels of trust. How would hon. Members feel if no one told them there was an issue over their pension pot? This is a simple chain of events; if the information can go to employers, it should go to members too, and there is no good reason for that not to happen in this electronic age.
I would now like to turn to amendment 4, on pause orders, which are also very much about responsibilities to pension scheme members. A pause order is put in place by the Pensions Regulator if it is satisfied that making an order will help the trustees to carry out their implementation strategy or if there is an immediate risk to the interests of scheme members or to the scheme’s assets.
In Committee, Labour Members submitted an amendment on pause orders, because we felt there was nothing to protect pensioners in the event of a master trust being paused. I gave the example of a hypothetical but potentially very real elderly woman who relied on her pension from a master trust and who had little income without it. A pause order can last up to six months, and the master trust can opt not to pay out pensions—that is potentially six months during which elderly and vulnerable people would have to find alternative means to survive. That is not acceptable.
I also referred to the likely circumstance where our elderly woman has not even been informed of the pause order because there seems to be no requirement for anybody to inform her. I put a question to the Minister on this matter in Committee, due to the lack of clarity. I was grateful for his reply, in which he said that existing legislation ensures that the regulator will notify any person who is to be directly affected by regulatory actions exercised through the regulator’s statutory internal procedures. I hope he will clarify today exactly when a scheme member would be informed in those circumstances.
It is appalling that pensioners are being denied access to their own pension money in such circumstances. I have been assured that members’ pots are protected in this situation, even in the event of a pause order. If that is the case, why would master trusts be unable to continue making payments to pensioners, who may be vulnerable and reliant on a regular payment from their pension pot? It is bizarre that the Government are so calm about the potential repercussions on the vulnerable if payments are stopped.
The Minister has also said that the stopping of payments would happen only in the rarest of circumstances. I hope he will take this opportunity to tell the House what those circumstances could be, and that he will provide scheme members with the assurance that they would not lose out during a pause order. Labour would go further by amending the clause and insisting that pensioners were still able to receive their payments.
I have submitted a completely new amendment 3 because I am concerned that the pausing of payments into the scheme under a pause order is fundamentally against what auto-enrolment sought to achieve. As it stands, the Bill would mean that if a pause order had been put on a master trust, the trust would no longer receive contributions from the employer or employee.
I note there is a similar amendment from the SNP, and I believe we are trying to achieve the same things. [Interruption.] I do not think I am trying to achieve the same things at the moment, as SNP Members are chatting among themselves, but I can assure them that we are trying to achieve the same things on pause orders.
While I agree that the master trusts will be in no fit state to continue taking contributions, I do not agree that, as a result, members will simply get their contributions back into their pay packet and employers will be let off making their contributions. Our amendment would ensure that, despite the pause orders being in place, the contributions made by the employee and the employer would not be lost. That is particularly important for low earners, when a potential six-month pause order could see them lose out on important and vital contributions. At this point, the Minister may be thinking that a pause order is unlikely to last six months, but it can.
Our amendment proposes that, in the event of a pause order, the employer will retain the contributions they would have made, and the contributions the employee would have made, until the pause order is lifted. It may be argued that the contributions the employee would retain could be saved by the individuals themselves, but the pot would still be without the pension contributions from the employer. Why, through no fault of their own, should the employee lose those contributions to their pension? Does the Minister agree that workers should not lose out on employer contributions during a pause order? I am concerned that if we do not put measures in place to actively protect people, even with the smallest chance that something might go wrong, we will have failed them.
In conclusion, I am concerned that a lack of transparency in the scheme is a problem, and that that problem lies with insurance companies and master trusts. I am concerned about the low paid; the person with multiple jobs; women; people under 22; carers; and the self-employed, who have not been looked after by this Bill. I am concerned that the Government have removed the funder of last resort clause, which the Labour Lords succeeded in putting into the Bill. These are all issues that, I assure the Minister, we will continue to debate. However, for now, I look forward to his response to the new clauses and amendments I have highlighted.
I rise to speak to new clauses 6 to 9 and amendments 5 to 9. I am disappointed that new clauses 10 and 11 were not selected for debate.
There is much in this Bill that I would commend. It rightly introduces regulation for master trusts and will help to shape confidence in pension savings, particularly for auto-enrolment. In Committee we sought to work constructively with the Government to bring forward new clauses and amendments to enhance the Bill as well as to deal with other shortcomings in the pensions landscape appropriate to the Bill. The Minister knows that my approach to the landscape of pensions and savings is to work constructively where we can to encourage consumer participation. Although there is much else in the field of pensions that I would like to see enhanced and on which greater clarity should be delivered, I congratulate the Government, and particularly the Minister, on bringing forward this Bill.
The Bill builds consumer protection for master trusts and is an important step forward in enhancing the appeal of auto-enrolment. We will be reviewing auto-enrolment later this year, but it is important that we the opportunity of this proposed legislation to make sure that we have the appropriate regulatory steps in place. I urge that when we review auto-enrolment we look positively at how we can substantially take it forward for part-time workers who have been excluded—many with multiple jobs, particularly women, as well as the self-employed—charting a way forward that builds pensions entitlement, hopefully in a way that builds consensus, and perhaps avoiding the screeching U-turn that we saw from the Minister’s colleague, the Chancellor of the Exchequer, in recent days.
This is a serious subject, and this Bill should be seen as part of a wider debate as to how we increase pension savings, building trust in the pensions savings industry. I was struck to read in the Government’s Green Paper on defined-benefits schemes published last month that the average DB scheme payment is as little as £7,000 per annum. We also have a research paper from Met Life this week highlighting income challenges threatening pension freedom, as well as a paper from the Centre for Policy Studies that raises, among other issues, challenges around drawdown.
It is clear that collectively there is more to do to encourage trust and confidence in pension savings—in particular, that all are encouraged to save at an appropriate level to secure dignity in retirement. On that basis, SNP Members will work constructively with the Government on this agenda. In the meantime, the Bill is a welcome step forward. I hope in that spirit of engaging positively the Minister will give careful consideration to the new clauses and amendments that my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) and I have tabled. They should be seen as seeking to improve the Bill; they are not in any way, shape or form wrecking amendments.
New clause 6 makes provision for the Secretary of State to restrict exit fees paid by master trust scheme members. It is not clear to us why master trust members should have to pay any exit charges. It is welcome that the Government are placing a 1% cap on exit fees for current members, with no exit fee for new members, but why the threat of exit fees for existing members? Large fees have been charged on exit on the past, and it is clear that we need to protect savers. I asked the Minister to confirm at earlier stages that there would be no exit fee for an individual leaving a master trust. He responded that when a master trust was closing it could not levy a charge, but I would appreciate it if we could make it explicit in all cases that fees should not be levied.
New clause 7 would require the Secretary of State, by regulations, to make provision to amend section 75 of the Pensions Act 1995 in order to protect unincorporated businesses that are at risk of losing their personal assets, including their homes. New clause 8 would require, within six calendar months from the day on which this Act comes into force, that 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 would compel the Secretary of State to, by regulations, exclude from the calculation in section 75 of the Pensions Act 1995 the orphan debt in any non-associated multi-employer scheme.
These new clauses would help to deal with the current issue facing plumbers in Scotland. Plumbing Pensions (UK) Ltd was established in 1975 to provide pensions for the plumbing and heating industry UK-wide. The scheme is managed by a group of trustee directors appointed from nominees of the Association of Plumbing and Heating Contractors in England and Wales, the Scottish and Northern Ireland Plumbing Employers Federation, and Unite the union. The scheme has over 36,000 members and assets in excess of £1.5 billion. Under section 75 of the Pensions Act 1995, employers can in certain circumstances become liable for what is known as a section 75 employer debt. The debt is calculated on a “buy-out” basis, which tests whether there would be sufficient assets in the scheme to secure all the members’ benefits by buying annuity contracts from an insurance company. Legislation specifies that a section 75 employer debt becomes payable when the employer either becomes insolvent, winds up, changes its legal status, or ceases to have any active members in the scheme. While we must be mindful that the purpose of these rules is to protect pension benefits, the way in which they are currently framed creates problems for some stakeholders. We are sympathetic to the concerns raised by SNIPEF.
Does my hon. Friend agree that it is because of such examples as he has touched on of unincorporated businesses at risk of losing personal assets that it is so pertinent that the Government bring forward the solution right now rather than wait for the opportunity to pass?
I am grateful to my hon. Friend, who is absolutely right. These are complex issues. That is why we make the suggestion that we are willing to work with the Government on this. We have to find a solution to this because at the end of the day ordinary people who have done the right thing could now be faced with losing their house, and that cannot be right. This issue has to be resolved.
There are a number of options for the UK Government to consider but each one has complications for the pension schemes, employers and scheme members. We urge the Government to weigh up the interests of employers with the need to protect benefits for pension scheme members. The former Pensions Minister in the other place, Baroness Altmann, indicated that she would look closely at how a solution could be reached to this complex issue. We need the same assurances from the Minister that he will work to find a solution for the industry and use this Bill to bring forward a solution.
SNIPEF’s four objectives are to achieve an amendment to section 75 debt legislation, as its main concern is for those involved in the unincorporated businesses that my hon. Friend mentioned who are at risk of losing their personal assets including their homes. It wants the Government to conduct a review of the actuarial methods used to value pension scheme liabilities, as it believes that the calculation of section 75 employer debt on a full annuity buyout basis is inappropriate and detrimental to non-associated multi-employer schemes given current economic conditions. It argues that orphan debt in any non-associated multi-employer scheme should be excluded from the calculation of section 75 employer debt. It suggests that provided the scheme is deemed to be prudently funded, the PPF acts as guarantor of last resort for orphan liabilities. It also believes that any changes in legislation should apply retrospectively to all employers from 2005. It would be helpful to get the Government’s view on this request. SNIPEF recently met the Minister, and it has advised SNP MPs that he confirmed that the objectives may have been incorporated within the Green Paper. We are now interested to hear the Government’s view as to whether they have identified a solution.
I want briefly to make passing reference to my two new clauses that have not been selected for debate, and signal my disappointment about that. New clause 10 would require the Secretary of State to identify support for women affected by the changes to the timetable for state pension age equalisation. We are disappointed that a pensions Bill has not been brought forward to deal with the pressing injustices within the pensions system.
Does my hon. Friend agree that by missing this opportunity the Government are wilfully ignoring it, much like they are ignoring the WASPI women themselves?
Order. We do not discuss new clauses that have not been selected. We have to deal with what is before us and that is the new clauses on the selection list. I know that the hon. Gentleman wants to stay in order by dealing with those, not those that have been omitted.
Thank you, Mr Deputy Speaker; I am happy to receive the guidance that you have given me. I simply wanted to put on record that we had missed the opportunity to debate the measures today. I know that we will have the opportunity to raise these two issues again, so I will skip on without making any further reference to them.
The SNP believes that we need to look holistically at the problems inherent in the system and build on opportunities such as auto-enrolment. Only by giving pensions thoughtful consideration can the Tories get this right. With alarm bells ringing about the injustices facing the WASPI women, and concerns that we could see another hike in the state pension age, even the idea that the Government are contemplating reviewing the triple lock post 2020 is deeply troubling. If I may say so, we know that only by delivering an independent Scotland can the SNP deliver dignity in retirement.
I turn to amendment 5, which would mean that the financial sustainability of the scheme funder had to be taken into account when assessing the financial sustainability of a master trust scheme. The Association of British Insurers has told us that insurance companies already hold a very significant amount of capital under the European regulatory framework for insurance, solvency II. In our view it would not be reasonable, nor is it necessary, for insurers to be required to hold separate or additional capital on top of that to meet their new obligations as master trust providers under the Bill. We would like to hear assurances from the Government that insurers will be exempt if they already adhere to FCA and PRA regulatory and financial sustainability requirements.
Amendment 6 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 7 makes provision for the Secretary of State to define “restricted activities” by regulation, including a list of specific activities restricted to minimise the risk of loss by master trust scheme funders. Through these amendments, we acknowledge that there may be circumstances in which the scheme funder requirements in the bill should not apply. The amendments state that the requirements need not apply to firms whose activities are already restricted by virtue of existing regulation.
The ABI has said that, in particular, the Prudential Regulation Authority rules mean that insurance activities of the scheme funder that are not directly related to the master trust scheme are transparent and do not threaten the solvency or sustainability of the master trust. The ABI says:
“This is a sensible and pragmatic approach”.
It would be useful to understand what additional requirements will need to be met for firms to be exempt from the scheme funder requirements. It would also be helpful to gain an assurance that the Government are committed to working with the industry throughout the development and consultation process for the regulations.
Amendments 8 and 9 provide the Pensions Regulator with an alternative to stopping payments to the schemes under section 5(b) of a pause order. Amendment 9 is consequential on amendment 8. The Bill creates a new power enabling the Pensions Regulator to make a pause order requiring certain activities to be paused once a trust has experienced a triggering event. That includes accepting new members, making payments, accepting contributions and discharging benefits. The TUC is concerned about the impact of a pause order on a member’s savings because there are no mechanisms in place to allow ongoing contributions to be collected and held on behalf of a saver. We contend that it is unacceptable for a member to be penalised, and in effect to lose wages in the form of employer contributions, because of events out of their control. The Society of Pension Professionals has said that it will be necessary to ensure that the period of effect of a pause order cannot start before the trustees actually receive notification of the pause order. That would mean that any contravention could occur only after the trustees are were receipt of the order. Without this, they argue the trustees could be in breach of a pause order, through no fault of their own, if a direction is not complied with during the period between the date on which the regulator makes the order and the date on which the regulator notifies the trustees of it—for example, if new members joined the scheme in that period contrary to a direction under clause 32(5)(a).
The Government should clarify whether they intend to take action to protect savers now, as we are disappointed that our amendments were defeated at earlier stages. I look forward to hearing the Minister respond. We have sought to work constructively with the Government to enhance the Bill, which we broadly welcome. We affirm our position of wishing to work with the Government where we can to create an environment in which workers can have faith and trust in pension savings.
We should all desire to develop a landscape in which pension saving is encouraged, allowing us to ensure that all our pensioners—from both their own provision and the state pension—have dignity and security in retirement. The Bill helps us along that road, as far as the regulation of master trusts is concerned. There is more to do to enhance auto-enrolment, and I look forward to working with the Government to take steps to include those who are currently excluded from pension savings, particularly the self-employed and many part time workers, especially women.
In closing, although I welcome the Bill, I reflect on the fact that it was necessary for me to put down a prayer last night on frozen pensions after the Government again brought forward a statutory instrument to freeze the pensions of hundreds of thousands of British pensioners who are being denied their full rights. In pushing the measure through, the Government have denied Members of this House the right to debate the matter. I encourage all hon. and right hon. Members to sign early-day motion 1097. I hope that if we can, as I believe we can, demonstrate broad cross-party support against this measure, the Government will have the grace to bring forward a debate on this matter before recess. This early-day motion has already been signed by Members from six parties, including the Government party. I encourage them to listen to us on this matter, as part of proceedings on the Bill.
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.
Feel free to do so.
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.
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?
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.
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.
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.
Order. I am now going to suspend the sitting. The House is now suspended, but please wait here.
It is clear that the advice from the police to the Director of Security is still that the Chamber should remain in lockdown. As most colleagues will realise, a number of right hon. and hon. Members are in other parts of the estate or are off the estate and, for obvious reasons, are unable to be present for business. There have been conversations through the usual channels. I hope the House would agree that, in the current circumstances, it would not be right to continue with today’s business.
Discussions between the usual channels will take place to ensure that the business that has been interrupted can be rescheduled for another mutually convenient date. Mr Deputy Speaker, I know that you will want to keep the House, although we remain locked down, informed of any news that comes through from the security authorities.
In view of what I sense to be the mood of the House and the situation in which we find ourselves. I will now move the adjournment.
Resolved, That this House do now adjourn.— (Mr Lidington.)
[The following remarks were made for the information of the House during its suspension.]
We remain under suspension, but I call on the Leader of the House to make a statement.
Colleagues will have appreciated that events have been moving rapidly, and I want to emphasise that the knowledge I have that is definite is so far very limited. What I am able to say to the House is that there has been a serious incident within the Estate. It seems that a police officer has been stabbed and that the alleged assailant was shot by armed police, and an air ambulance is currently attending the scene to remove the casualties. There are also reports of further violent incidents in the vicinity of the Palace of Westminster, but I hope that colleagues on both sides of the House will appreciate that it would be wrong of me to go into further details until we have confirmation from the police and the House security authorities about what is going on.
I shall endeavour to do the very best I can, both at the Dispatch Box and by communicating with my opposite numbers in other political parties, to ensure that Members are kept aware of what is happening, but at the moment the very clear advice from the police and the director of security in the House is that we should remain under suspension and that the Chamber should remain in lockdown until we receive advice that it is safe to go back to normal procedures.
I am not going to enter into debate at this stage. I just wanted to make sure that people were informed as to why we are in here and in lockdown.
May I just thank you for that, Mr Deputy Speaker, and thank the Leader of the House for his statement? Our thoughts and prayers are with the police officer. I thank the police, all the security services and all the staff for looking after us so well.
I am grateful to the hon. Lady. I think that those sentiments will be shared without reservation in all parts of the House.
We remain suspended until further notice.