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House of Commons Hansard
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Commons Chamber
22 January 2018
Volume 635

House of Commons

Monday 22 January 2018

The House met at half-past Two o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Housing, Communities and Local Government

The Secretary of State was asked—

Remedial Fire Safety Work

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1. How much Government funding has been allocated to local authorities for remedial fire safety work as a result of the Grenfell Tower fire. [903413]

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The Government will consider providing financial flexibilities for local authorities to undertake essential fire safety work to make buildings safe. We have not turned down any requests for such flexibilities. Separately, we have provided funding to local authorities for the collection of data on private buildings.

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Before Christmas, the former Housing Minister, the hon. Member for Reading West (Alok Sharma), revealed that 36 local authorities had contacted the Department about work to secure fire safety in tower blocks, but none of them have received any financial help so far—why not?

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Let me update the hon. Lady. My records show that the number of authorities is still 36. We have requested further information from 10 of them, and four have provided it. As I said a moment ago, however, we are ready to provide any local authority with whatever financial flexibilities are necessary to ensure that all essential fire safety work is done.

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How are local authorities or other landlords to know what steps to take to ensure that there is adequate fire protection when the relevant building regulations are 11 years old and no review of them has yet commenced?

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Perhaps the hon. Gentleman was not in Parliament last year when the Home Secretary and I asked for an independent review of all building regulations by Dame Judith Hackitt. Just a few weeks ago, in the House, I presented the findings of her interim report, the recommendations of which we accepted in full.

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Grenfell Tower is seared in all our memories, and of course we must do whatever we can. I very much agree with what was said by the hon. Member for North West Durham (Laura Pidcock)—I hope I can call her my hon. Friend—but am I not right in thinking that if a local authority runs out of funds for fire protection measures, a trigger mechanism allows them to spend more, beyond their normal restraints?

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First, I can tell my hon. Friend that I am not sure that the hon. Member for North West Durham (Laura Pidcock) is his hon. Friend. As for his question, mechanisms do exist, and we have gone further by saying to local authorities that if there are certain flexibilities that they need, they should contact us, and those flexibilities will be provided.

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My hon. Friends the Members for Denton and Reddish (Andrew Gwynne), for Rochdale (Tony Lloyd) and for Oldham West and Royton (Jim McMahon) are absent to pay tribute and respect to Kieran Quinn, whose funeral is taking place this afternoon. He was the leader of Tameside Council, which was council of the year in 2016. Our thoughts and condolences are with his family and friends today.

I welcome the new ministerial faces to the Department with a new name, but what the country really needs are new policies to fix the growing housing crisis. More than seven months on from the Grenfell Tower tragedy, how many tower blocks with the same dangerous cladding have had that cladding taken down and replaced?

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I join the right hon. Gentleman in extending my condolences to Kieran Quinn’s family and friends on what will certainly be a very difficult day for all of them.

According to my figures, which I think are accurate up to 10 January, 312 buildings have been tested, of which 299 have not passed the test. The cladding on a number of buildings has started to come down and is slowly being replaced. We are anxious to ensure that there is enough capacity in the industry to meet the extra demand that it is now experiencing, and we are working on that with both the industry and my right hon. Friend the Business Secretary.

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I wonder whether the Secretary of State has read the update that his Department issued this morning. The number of tower blocks with the same dangerous flammable cladding that has been taken down and replaced—more than seven months on from Grenfell Tower—is three. How has it come to this? Seven months on from Grenfell, only one in four families who are Grenfell survivors has a new permanent home. The Government still cannot confirm how many other tower blocks across the country are unsafe. Ministers still refuse to help to fund essential fire safety work when they know that blocks are dangerous. The Secretary of State is sitting back and letting individual flat owners, rather than landlords and developers, pick up the full costs for private tower blocks. The Secretary of State must know that that is not good enough. What new action will he take to sort out these serious problems?

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The right hon. Gentleman will know, because he shares this view, that the No. 1 priority for buildings safety following the Grenfell Tower tragedy is to ensure that anyone living in any tower that might have similar cladding feels completely safe and that those buildings are properly tested. If anything is found before that cladding can be taken down and replaced, which will of course take time, we must ensure that adequate measures such as 24/7 fire wardens are put in place, on the advice of the local fire and rescue service. That is exactly what has been done in every single case. The right hon. Gentleman also asked about private sector tower blocks and the cost of any remedial work that is needed. I have made it clear in the House and since our last oral questions that, just as social landlords are picking up the tab for those changes, and whatever the legal case might be in the event of a private relationship, the moral case is clear: the tab should be picked up by the freeholders of those properties.

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Order. These are extremely important matters, but we need to speed up a bit because we have a lot of questions to get through.

Housing First

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2. What progress has been made on piloting the Housing First approach to tackling homelessness. [903414]

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In the recent Budget, we announced £28 million to pilot Housing First for some of the country’s most entrenched rough sleepers in the west midlands, the Liverpool city region and Greater Manchester. We are continuing to work with the pilot regions to refine the scope and design, ready for launch later this year.

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Ahead of the commencement of the Homelessness Reduction Act 2017, will the Secretary of State join me in praising the work of Routes to Roots, a local charity that helps homeless and vulnerably housed adults in Poole?

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First, let me thank my hon. Friend for the role that he played on the Bill Committee in getting that legislation on to the statute book. It will help to prevent homelessness in Poole and elsewhere. I agree that there is a lot that individuals can do to help to end the homelessness cycle, including by getting involved with voluntary groups such as Routes to Roots in his constituency, and to make a real difference for vulnerable people.

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On Boxing day, a group called Activists for Love created a squat to shelter homeless people in Hull. I went to meet the residents on Saturday. The landlord, MRC lettings, has been very accommodating and is actually going to find everyone living there a home. However, I am concerned that the funding cuts to Hull City Council mean that it does not have the money for much-needed aftercare support to prevent these people from becoming homeless again. Will the Government please commit to providing more money for an aftercare homelessness service for Hull West and Hessle?

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I can tell that the hon. Lady shares our desire, and that of all Members, to fight homelessness and rough sleeping. That is why I am sure that she will welcome the £1 billion that the Government have allocated to 2020 to fight homelessness, including £315 million for core funding for local authorities.

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I commend the Government for initiating the Housing First pilots, but what assessment has my right hon. Friend made of rough sleeping in London, which is clearly under the greatest pressure? We want to ensure that people get a firm home of their own and that the Mayor of London actually delivers affordable housing for the capital.

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I know that my hon. Friend cares deeply about this issue and has done much on it, not least through his work on the Homelessness Reduction Act 2017. He is right to raise this issue. We will not solve the problem of homelessness in this country unless London does its bit, and I am afraid that the Mayor of London is letting the people of London down. In his first year in office, not a single home for social rent was started in London. That is a tragic record.

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The centre for housing policy at the University of York is leading on policy development and on validation of the Housing First initiative, yet City of York Council has presided over a fifteenfold increase in street homelessness since 2010. How will the Minister ensure that the residents of York can benefit from Housing First not just in theory, but through action?

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I hope that the hon. Lady agrees that it makes sense to pilot Housing First properly so that we ensure that when it can be rolled out across the country, it will work properly. That is why we have set up the pilot areas. There are still lots of types of help in other parts of the country, much of which comes from the £1 billion of funding that we have allocated to 2020, which includes funding for local authorities such as York.

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The December report of the local government and social care ombudsman, “Still No Place Like Home”, found that in seven out of 10 of the housing cases that it investigated, families were being placed in bed and breakfast accommodation for unlawfully lengthy periods, with some lasting more than two years. The report highlights the appalling physical and mental impact, including on children, of living in inadequate, crowded and sometimes damp conditions. Does the Secretary of State recognise just how damaging living in insecure, inappropriate housing is? Will we see any improvement for those families in the next 12 months?

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I share the concerns of many hon. Members, which is why the Government have made fighting homelessness and reducing rough sleeping an absolute priority. The hon. Lady’s question recognises that action is required on many fronts—economic, mental health, addiction and other issues—and the Government have put together a programme to pursue them.

Fire Safety

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3. What recent steps his Department has taken to ensure the fire safety of buildings in England. [903415]

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I am grateful for the recommendations of Dame Judith Hackitt’s “Independent Review of Building Regulations and Fire Safety”. Our building safety programme is making good progress in identifying potentially unsafe aluminium composite material cladding in English tower blocks. Through that and future action, we will make buildings much safer.

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The use of sprinklers in high-rise blocks has been widely discussed since the tragic event at Grenfell Tower. Many of our tower blocks are constructed using individual compartments that are designed to prevent the spread of fire to other flats. However, there are many examples of where the integrity of such compartments has been compromised. Will my right hon. Friend assure the House that the fire resistant properties of individual flats will form part of the ongoing reviews?

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My hon. Friend raises an important point. Fire and rescue services have visited over 1,250 high-rise buildings since the tragedy at Grenfell Tower, and those inspections have included the checking of compartmentalisation, fire doors and other relevant features. The National Fire Chiefs Council has reaffirmed the principle of “stay put”, but it is the responsible person who must determine what is appropriate for each particular building.

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I want to refer to Approved Document B of the building regulations and the guidance contained within it. Paragraph 12.7 specifically prevents the use of combustible material in the insulation of high-rise buildings. Will the Secretary of State confirm that the guidance is a lot less clear about cladding and appears to allow for the continued use of combustible materials in the cladding on high-rise buildings? If so, is the Secretary of State comfortable with that situation?

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I do not think that that is still the case. However, the hon. Gentleman raises an important point about the need to review the guidance and the regulations themselves. That point was made clear by Dame Judith Hackitt in the interim report that she published last month, the recommendations of which we accepted in full.

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Citiscape is a residential block in Croydon with the same flammable cladding as Grenfell Tower, and its residents fear that they are living in a deathtrap. The Secretary of State has told them that the responsible person should take action, but the freeholder, the developer, the managing agent and the insurer all deny liability, and the cladding stays in place while legal wrangles go on. There is only one responsible person left, so when will the Secretary of State take action to remove the dangerous cladding, and to keep people and their families safe?

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I am happy to reiterate that the responsible person in such situations is clearly the freeholder. Whatever the legal case might be, the freeholder should take responsibility. My hon. Friend the Minister for Housing has spoken to the chief executive officer of Proxima GR Properties, the company in this case, and is engaged in dialogue to try to see what we can do to ensure that it does the right thing.

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As the Secretary of State has said, one of the key recommendations of the interim review of building regulations and fire safety was to restructure the whole suite of approved documents to provide more clarity on how fire safety measures are applied. Will the Secretary of State therefore provide an update on what steps his Department is taking to implement that recommendation, with particular regard to planning guidance?

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The hon. Lady will know that the report was an interim report, with the final report due in the spring. There were some interim recommendations that we could act on immediately, and we have accepted all of them. For example, a recommendation about restricting how and when desktop studies can be used is being implemented right now. The hon. Lady might be interested to know that a convention involving industry experts, stakeholders and Dame Judith Hackitt is going on as we speak, just down the road from Parliament—I attended this morning—to look at what more can be done in the interim.

Rough Sleeping

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4. What assessment he has made of trends in the number of homeless people sleeping rough between 2010 and 2016. [903416]

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11. What assessment he has made of trends in the number of homeless people sleeping rough between 2010 and 2016. [903424]

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13. What assessment he has made of trends in the number of homeless people sleeping rough between 2010 and 2016. [903426]

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17. What assessment he has made of trends in the number of homeless people sleeping rough between 2010 and 2016. [903430]

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22. What assessment he has made of trends in the number of homeless people sleeping rough between 2010 and 2016. [903435]

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There are too many people sleeping rough and I am determined to do more. That is why the rough sleeping and homelessness reduction taskforce will deliver a cross-Government strategy to tackle this issue, with the help of an expert advisory panel.

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I welcome the Minister to her new role. Rough sleeping has doubled nationally since 2010, but in my constituency it has doubled in the past two years, according to our local charities Leamington Winter Support and Helping Hands. Of course, the biggest cause of homelessness is a lack of affordable housing. In my constituency, developers have delivered—

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Order. I apologise, but we have a lot to get through. What we need is a question, not a series of statements—a question with a question mark. One sentence, please. Help others; help yourself.

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Thank you, Mr Speaker. Given the lack of affordable housing being delivered by developers—the rate is currently running at 27% compared with the 40% set in the local plan—what does the Minister plan to do to ensure that that is enforced locally?

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That is an interesting question, because those statistics are not aligned with November’s rough sleeping statistics. However, we recognise concerns about viability assessments for affordable housing. Last autumn we consulted on proposals to simplify viability assessments and increase transparency. We will announce further details of our approach when we publish the new national planning policy framework consultation later this year.

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The number of rough sleepers in Darlington has doubled since 2010. Is that caused by: (a), a reduction in council budgets; (b), more than £5 million of cuts to housing benefit; (c), the bedroom tax; (d), the lack of affordable housing; (e), universal credit—I could go to (z), Mr Speaker—or the Minister’s failure to tackle soaring rents in the private sector?

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I thank the hon. Lady for her question but, frankly, this is not a laughing matter. The Government are clear that one person without a home is too many. We have already taken steps towards combating rough sleeping and homelessness. For instance, we have implemented the most ambitious legislative reform in decades through the Homelessness Reduction Act 2017, which comes into force this April. I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) for all his hard work on that Act. We will ensure that more people get the help they need earlier to prevent them from becoming homeless in the first place.

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The massive increase in homelessness and rough sleeping in my city of Glasgow is in stark contrast to the situation under the last Labour Government, when homelessness fell by more than three quarters. Given that shocking situation, what plans does the Minister have to roll out the finished Housing First pilot scheme, which prioritises rapid rehousing and permanent tenancies as a national strategy following the excellent pilot results in several British cities?

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I thank the hon. Gentleman for his question, which rather seemed to be about a devolved matter. As the nation gets to grips with this issue, the rough sleeping advisory panel, which I will chair, will include key figures from local and central Government, as well as homelessness charities. The panel’s role will be to support the taskforce in developing a cross-Government strategy to halve rough sleeping by 2022, and to eliminate it altogether by 2027. The first meeting of the advisory panel will take place on 1 February.

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Earlier this month, the Wales Audit Office produced a report stating its belief that the Government’s welfare policies were having a detrimental impact on homelessness in Wales. Does the Minister accept that what is true in Wales is also true in England?

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I like truths across the whole UK. The interesting issue will be the amount of money and the packages that we can put in place to spread funding for affordable housing across the nation. That is something that we are determined to do.

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In Wolverhampton, the estimated number of rough sleepers has doubled since 2010. What plans do the Government have to decrease the number of rough sleepers, because their current plan is certainly not working?

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The interesting thing about the Wolverhampton area is that it is part of the west midlands, so we are working very hard with Mayor Andy Street, who will be joining me on the rough sleeping strategy panel. I look forward to our first meeting on 1 February.

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I am launching an appeal for mobile phones with local charity Doorway to enable those who are homeless or suffering to get back on their feet—literally—and have an emergency lifeline. Will the Minister offer support for what is, for some people, a controversial initiative locally and agree that it is much more controversial that in the UK today we still have some people who are homeless, which is why the Government are prioritising that area?

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I thank my hon. Friend for referring to that interesting, innovative way to deal with such issues in the future, and I would be interested to see how the pilot in her area works. I congratulate her local area on being so proactive.

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In Rugby, council officers go out into the community to speak to rough sleepers and have recently placed four in supported accommodation, but more often than not offers of support are declined and only last week Warwickshire police charged two rough sleepers for aggressive begging. Does the Minister agree that it is vital that we provide support for those who are forced to sleep rough, but that it is important also to ensure that support goes to those who are in genuine need?

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My hon. Friend is quite correct: this is a complex matter involving some inherent difficulties such as mental health issues, family breakdown, crisis and chaos, but equally, the state has to be fair-handed, and if people are begging aggressively and have properties of their own, the state will do what it has to do. Our focus is on rough sleepers who need the help most.

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It is a pleasure to welcome the Minister to her place. She will be aware that, following a grant that provided funding for the Torbay End Street Homelessness campaign, we have seen the number of rough sleepers fall. Will she confirm how work of that sort will be complemented by the Homelessness Reduction Act coming into force later this year?

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I thank my hon. Friend, whom I have known for many years, for his good question. We want to pick up on the pilots around the country that are working so well, and the Homelessness Reduction Act means that councils will have a duty to try to help people before they become homeless. That is why, as part of a suite of efforts, we are looking into dealing with these matters. We are confident that, by 2022, we will halve rough sleeping in this country.

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There has been a noticeable increase in the number of rough sleepers in Shipley over the past year or so. Will the Minister set out what the Government are doing with Bradford Council to try to deal with that issue? Does she agree that, to help homeless people, it is important that Bradford Council develops new housing in cheaper, affordable areas in Bradford, rather than concentrating on building unaffordable, expensive houses on the green belt in Wharfedale in my constituency?

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I thank my hon. Friend for that question; he never fails to disappoint. Interestingly, one area where councils will be able to flex their muscles more is in taking on empty homes and looking into quality rented properties that are affordable for everybody so that communities stay together. I think that is something Bradford Council ought to do.

Affordable Homes: Rural Areas

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5. What steps the Government are taking to increase the number of affordable homes in rural areas. [903417]

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More than 119,000 affordable homes have been delivered in rural communities since 2010. Homes England has invested £142 million in the rural affordable homes programme schemes in the past four years, which is around 9% of total spend.

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I very much welcome those figures on affordable homes. There are redundant farm building sites, which could be classed as brownfield sites. If they were, that would release a lot more land for affordable homes. Will the Minister consider that, please?

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My hon. Friend is absolutely right: we have introduced a requirement for each local authority to publish registers of brownfield land. More than 90% of local authorities have done so, and the information to date suggests that nearly 16,500 brownfield sites covering 26,000 hectares have already been identified in England alone.

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As well as helping rural areas, what is the Minister going to do for places such as Birmingham? How will he respond to the council’s request for additional assistance with the provision of new homes, essential maintenance on existing properties and the discharge of statutory obligations, such as health and safety and annual gas inspections?

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Since 2010, we have delivered more than 370,000 new affordable homes, but of course we are ambitious to do more—working with housing associations and local mayors such as Andy Street. Of course, we have raised the housing revenue account borrowing cap for local authorities to give them greater flexibility.

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In welcoming my hon. Friend to his new role, may I ask him to look, with the intellectual vigour that I know he has, into what national parks do to supply affordable homes? They are not exempt from the need.

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My right hon. Friend has considerable experience, both as a Minister and as a long-standing Member. We will certainly look into all such matters because we are absolutely committed to using every lever that we possibly can to increase home building in this country for the next generation.

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One of the best ways to provide more affordable homes to rent in rural and, indeed, urban areas is through the provision of more co-operative housing. What further co-operative housing initiatives are the Minister and his Department thinking of pursuing?

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The hon. Gentleman is right, and a lot of social housing is of a co-operative nature. It particularly depends on any given community’s specific needs, which are often for the local authorities to help to identify. Local authorities in rural areas need to focus on the particular needs of their communities. For example, some areas have rural exception sites, which provide long-term protection for affordable homes in rural areas.

Coastal Communities

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6. What progress his Department has made on supporting the economies of coastal communities. [903418]

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20. What progress his Department has made on supporting the economies of coastal communities. [903433]

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Since 2012, we have invested £174 million in 295 coastal communities fund projects throughout the UK. Those projects are forecast to deliver 18,000 jobs, and we have announced that round 5 of the coastal community fund, worth £40 million, will open shortly.

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I am grateful to the Minister for that reply. The Lowestoft coastal communities team has developed an exciting strategy for the regeneration of the town’s historic seafront. Will my hon. Friend visit Lowestoft to see for himself the work that will transform Britain’s most easterly town into the east coast’s destination of choice?

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My hon. Friend’s constituency has already received more than £1.5 million from the coastal communities fund, which shows how he is delivering for his constituents through his campaigning. I would be delighted to visit when I am in his area.

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The Social Mobility Commission’s “State of the Nation” report revealed that the socioeconomic prospects of those who live in rural coastal areas are poor. We have world-class industries and skills in many sectors, so what steps is the Minister taking to ensure that we realise our full potential?

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I had the pleasure and privilege of visiting my hon. Friend’s constituency last year, and I saw those world-class skills in action, particularly in the nuclear supply chain. I am delighted that, through our industrial strategy and the northern powerhouse, we are supporting people throughout the country, so that they can grow the economy, wherever they may reside.

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The Minister is leading on this issue, so he will know that the northern powerhouse growth deal, which will affect north Wales and its coastal communities, is about connectivity with Liverpool and Manchester and the improvement of infrastructure. Will he give an indication of when he will reach some conclusions on the budget for that growth deal?

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Ultimately, my right hon. Friend the Secretary of State for Wales and his Ministers are leading on the north Wales growth deal, but with them I have an absolute determination to ensure that the deal delivers for the people of north Wales. On Thursday this week, I shall visit local authorities in north Wales to ask them what progress they have made and to update me on the projects that they would like to see.

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I extend the condolences of the Scottish National party group to the friends and family of Councillor Kieran Quinn for the sadness and sudden loss they have faced.

Is the Minister aware of the Cardiff declaration by the Conference of Peripheral Maritime Regions? It was signed in November by the Scottish Government, alongside representatives of more than 20 other EU regions. Does he agree with its statement that Brexit will have a disproportionate impact on coastal regions and their key economic sectors?

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I do not agree with the statement that Brexit will have a disproportionate impact on the coastal regions, because taking back control of our fishing industry will pay a huge dividend for the people who live along our coast. It was hugely exciting for me to visit Dumfries and Galloway only last Thursday to talk about the borderlands deal, which is unique in that it goes from coast to coast, covers the English and Scottish border areas and is a partnership of two Governments—the Scottish Government and the UK Government—coming together as equals to deliver for the people of the borderlands.

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That does not really answer the question. Coastal communities face economic and social deprivation, and the Cardiff declaration highlights the fact that a hard Brexit will exacerbate that. Will the Minister meet representatives of the CPMR, and does he agree with them that if this Government do the unthinkable and walk away from a deal, Scotland, Wales and Northern Ireland should still be able to access EU funding programmes?

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Of course I will be happy to discuss having a meeting with the people to whom the hon. Lady refers. However, I gently point out that this Government—the UK Government—have already invested £174 million in our coastal communities and are getting behind those communities. What have the Scottish Government done? I think nothing.

Self-build Housing: South-west

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7. What steps he is taking to promote self-build housing projects in the south-west. [903419]

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The Government are promoting a step change in self-build through the £4.5 billion home-building fund and the 2016 self-build regulations.

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I welcome the Minister to his place. May I just ask him what discussions he has had with the Treasury regarding the continuation of the community housing fund to deliver more local houses for people in Cornwall?

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My hon. Friend is right to raise this issue. The community housing fund was worth £60 million in its first year. In the context of the Budget in November, we announced that it would be continuing for a further three years. That includes capital and revenue funding, and it is part of the Government’s drive to support community groups bringing forward home-build projects.

Looked-after Children

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8. What recent discussions he has had with the Secretary of State for Education on outcomes for looked-after children. [903421]

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Like the hon. Gentleman, this Government have high ambitions for looked-after children and care leavers. The forthcoming corporate parenting provisions in the Children and Social Work Act 2017 will ensure high-quality care and support for these vulnerable young people.

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I welcome the Minister, my near neighbour, to his new post. When will the Government actually provide adequate funds properly to support these special young people?

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The hon. Gentleman will be pleased to know that, shortly, the Government will announce the winning applicants to their social impact bond to provide funding for local authorities to improve outcomes in education, training and employment for care leavers.

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I, too, welcome the Minister to his position, and I know that he will be excellent in his role. Does he agree that no child should be taken into care if family support would allow them to stay safely at home? What will he do to provide more support to struggling families to prevent children from being taken into care?

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I thank my hon. Friend for her warm words and wholeheartedly agree that, where possible, children are of course looked after best by their own families. That is why the troubled families programme, in which we are investing £1 billion through to 2020, is working with those families to reduce the need for children to go into care. I am delighted to tell her that the results in December show a decrease in the number of children in need in that programme.

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14. May I remind the Minister that, whether we are talking about children in care or the elderly in care, the real question that he must answer is what has happened to the fabric of social support and care, which has been driven down by local authority cuts over the past few years? [903427]

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This Government are ensuring that local authorities have the resources they need to provide important local services: £200 billion over these five years; a real-terms funding increase over these two years; and £2 billion announced in the last Budget specifically for social care.

Local Government Finance

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9. What assessment he has made of the effect of the local government finance settlement on the ability of local authorities to meet their statutory responsibilities. [903422]

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19. What assessment he has made of the effect of the local government finance settlement on the ability of local authorities to meet their statutory responsibilities. [903432]

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Our fair and sustainable financial settlement gives local authorities the ability to protect important local services. It marks the third of a four-year deal, providing funding certainty to local government and a real-terms increase in available resources to the sector.

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How does the Minister intend to ensure that, under the fairer funding review, individual local authorities receive an adequate level of funding that is not only fair, but sustainable, given that the Government’s intention to reset the business rates baseline from 2020-21 may result in all the individual growth that has been built up since the start of the business retention scheme being taken away? Can the Minister provide any assurances that this growth will be protected?

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Order. May I gently encourage colleagues in preparing their questions to recognise the merits of the blue pencil? Usually something drafted can be shortened.

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The Government are piloting 100% business rates retention and have seen extraordinary applications for those pilots, and we are learning from them to design the appropriate system to take over in 2019-20 together with, as the hon. Lady said, a full review of fair funding, so that we can get the allocations right.

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This Government have deliberately targeted their cuts at the most deprived communities. Nottingham City Council has lost a staggering 80% of its funding since 2010. Now the Government’s only answer to the social care crisis is to add another 3% to council tax bills. In Nottingham, that will raise just £3 million, which is way short of the extra £12 million the city needs to meet the costs of caring for more elderly and disabled people. When will the Minister stop dumping the financial burden on to Nottingham’s taxpayers and start funding social care properly and fairly?

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I gently point out to the hon. Lady that core spending power per dwelling in the 10% most deprived local authorities is actually 23% higher than that in the least deprived, and indeed in her local authority, it is 11% higher than the national average.

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rose—

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Can the hon. Member for Kettering (Mr Hollobone) write the brevity textbook?

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I welcome the Government’s best value inspection of Northamptonshire County Council. Will the Minister ensure that the transfer of the fire service out of the council to the police and crime commissioner is not delayed by this inspection?

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As my hon. Friend knows, the Secretary of State has asked Max Caller to look at the authority, and we await his findings eagerly. It is difficult for me to comment further at this time, as I am sure my hon. Friend appreciates.

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I welcome my hon. Friend to his new post. Somerset, which is underfunded relative to other local authorities, was disappointed not to be part of the business rates pilot. Will he meet me to discuss the upcoming local government finance round?

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As my hon. Friend will know, we had an overwhelming number of applications for the pilot, and I am disappointed for him that Somerset is not a member. He should encourage his local authority to apply again when we rerun the pilot this year. In the meantime, I would be delighted to meet him to discuss fair funding for Somerset.

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The local government finance settlement descended into a complete and utter shambles last week. The figures sent to local authorities were wrong. Back in March 2017, the National Audit Office was concerned that there was not the capacity within the Department for Communities and Local Government and the Valuation Office Agency to handle the Secretary of State’s plans. This new error will certainly not engender confidence in the Department. What steps are being taken to ensure that the error is not repeated?

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The Valuation Office Agency made a mistake with the initial calculations. That was corrected and the Department has moved swiftly to provide accurate information to local authorities. I gently point out that overall the error meant that local authorities will receive an increase in the business rates retention forecast for this year.

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The last time we were able to question the Secretary of State, we asked how he planned to address the unsustainable and insufficient funding for children’s services and what he would do about the £2 billion funding gap. He told us to wait and see what happened in the local government finance settlement. Well, we waited and looked at his proposal, but there is no new money for these vital services. Was that another error, and will it be corrected in future?

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As I have already mentioned, local authorities will receive a real-terms increase in their aggregate funding this year and next. The Government have also invested £200 million in a social care innovation programme to look at ways to improve the delivery of children’s social services.

Thames Estuary 2050 Growth Commission

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10. What steps the Government are taking to ensure that the Thames Estuary 2050 Growth Commission takes account of the needs of south Essex. [903423]

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Under Sir John Armitt’s leadership, the Thames Estuary 2050 Growth Commission is engaging all interested parties, including on last Friday’s visit to Southend airport, which I understand my hon. Friend attended. The commission is developing an ambitious vision for south Essex, north Kent and east London, and will publish its final report this spring.

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I thank my hon. Friend for that reply. London Southend airport, as we like to refer to it, will have a major impact on the commission. What role does he see London Southend airport playing in boosting growth and productivity across the whole of south Essex?

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I, too, like to refer to it as London Southend airport, which I think is its correct name. It is a real success story and has great potential for growth—it has an ambitious 2 million passenger target this year. Stobart Group has already invested £162 million in a new terminal. That puts London Southend airport at the heart of the Thames estuary commission’s growth plans.

Carillion

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12. What discussions he has had with local authorities on local government contingency arrangements as a result of Carillion entering liquidation. [903425]

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We have been working in close partnership with the Local Government Association, which contacted affected local authorities before Christmas about the financial difficulties Carillion was facing to ensure that they have appropriate contingency plans in place. We will continue to work with the LGA to ensure that there is no, or minimal, disruption to public service.

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Following revelations in the Sunday Herald that Keith Cochrane, the interim CEO of Carillion, sits on the Government’s network of non-executive directors, can the Minister advise on whether he or anyone from his Department has taken advice from or held meetings with Keith Cochrane?

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I am not aware of any meetings taking place or advice being given. However, I will check the records when I return to the Department and write to the hon. Gentleman if there have been such meetings.

Homes for Social Rent

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15. What recent assessment he has made of trends in the number of new homes for social rent since 2010. [903428]

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16. What recent assessment he has made of trends in the number of new homes for social rent since 2010. [903429]

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We have delivered 357,000 affordable homes since 2010—more than in the preceding seven years. That includes 257,000 for rent and 128,000 for social rent.

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Will the Secretary of State adopt Labour’s plans to lift the borrowing cap on councils’ housing revenue accounts, which could alone build 80,000 council homes, according to the Local Government Association?

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We are not going to take on Labour’s plans in this area or any other, because frankly they are not sustainable. We are going to increase the affordable homes budget to £9 billion up to 2021. We are restless to deliver more affordable homes, including for social rent. The hon. Gentleman may like to know that in the past year there were 1,100 new housing starts in Manchester, and we are talking to the Mayor of Manchester about the housing deal, which will include a social housing component.

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Whichever way Ministers try to present the figures, the number of genuinely affordable social homes built with public sector grants on their watch is pitiful. If the Minister will not accept Labour’s policy, will he accept the recommendation of the Treasury Committee by lifting the borrowing cap on councils’ housing revenue accounts completely to enable councils to build desperately needed council homes—or will he confirm that only a Labour Government will take the action that we need on council housing?

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The record speaks for itself. We have delivered 357,000 more affordable homes since 2010—more than in the preceding seven years under the previous Labour Government. We are raising the cap; we did that in the last Budget. We are also creating a stable financial envelope for local authorities and housing associations with long-term rent deals: the settlement is CPI plus 1%. That is the sustainable way to drive home building in this country.

Surplus Public Land

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18. What progress his Department has made on enabling the development of surplus public land for housing. [903431]

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Between 2011 and 2015, Government land was sold with the capacity to deliver up to 109,000 new homes.

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Some Labour councils, particularly in London, own hundreds of acres of surplus land. May I urge the new Minister to challenge those Labour authorities so that we can turn that land into family homes?

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My hon. Friend is absolutely right. In the 2015 autumn statement, the Chancellor set out our aim to release enough Government land by 2020 for 160,000 extra homes to be built. The Government are providing local authorities with money to help to facilitate that. I met Nick Walkley, the CEO of Homes England, last week to make sure that we get cracking on this top priority.

Temporary Accommodation

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21. What recent assessment he has made of trends in the number of households in temporary accommodation. [903434]

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Temporary accommodation ensures that no family is left without a roof over their head. Prevention is at the centre of our approach to protect the most vulnerable. We are spending over £1 billion until 2020 to prevent homelessness, as well as implementing the most ambitious legislative reform in decades—the Homelessness Reduction Act 2017, introduced by my hon. Friend the Member for Harrow East (Bob Blackman).

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Why does the Minister think that the number of children in temporary accommodation has risen by 73%, to 120,000, since 2010, according to the Public Accounts Committee, when the number had been falling under Labour?

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I very much regret to have to point out to the hon. Lady that the number of children living in temporary accommodation is lower than at its peak in 2006. In 2011, we changed the law so that councils can place families in decent and affordable private rented homes. This now—[Interruption.] Behave yourself, love, please. This now means that homeless households should not have to wait as long for settled accommodation.

Anti-Semitism and Holocaust Denial

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23. What steps his Department is taking to tackle anti-Semitism and holocaust denial. [903436]

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Anti-Semitism and holocaust denial are completely unacceptable in a civilized society, and this Government have taken a strong lead in tackling both. We have adopted the International Holocaust Remembrance Alliance working definition of anti-Semitism, and we are planning a striking new national memorial beside Parliament.

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Does my right hon. Friend agree that the work of the Holocaust Educational Trust is as important as ever, given the worrying levels of organised hatred and intimidation both at home and abroad?

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I agree wholeheartedly, and I am very pleased to praise the work of the Holocaust Educational Trust. I was also pleased to announce in Speaker’s House last week that we are giving £144,000 of support jointly to the Holocaust Educational Trust and the Union of Jewish Students to tackle anti-Semitism, prejudice and intolerance on our university campuses.

Topical Questions

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T1. If he will make a statement on his departmental responsibilities. [903438]

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The new year has meant a new name for my Department, the Ministry of Housing, Communities and Local Government—or MoHoCoLoGo for short—and a fantastic new ministerial team, who will build on the great strides achieved by my hon. Friends the Members for Nuneaton (Mr Jones) and for Reading West (Alok Sharma). The name underlines the importance of our commitment to fix the broken housing market, and we will continue to help to build strong communities and to support local government. Something that resonates especially strongly this week is Holocaust Memorial Day, which is an opportunity to reaffirm our commitment to rooting out hatred and anti-Semitism wherever it exists.

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I thank my right hon. Friend for that upbeat statement. Both Scotland and Wales are totally served by unitary local authorities. How many people in England are served by unitary authorities, and what does he expect the figure to be in five years’ time?

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First, may I say that it is a privilege to receive a question from my right hon. Friend? This is the first time I have received one from him in Parliament, and it is an opportunity for me to thank him for all the work he has done in government, of which he can be incredibly proud. I can tell him that 60% of English people are served by unitary authorities, and I expect the number to be higher in five years’ time, given the views of many local people about unitary authorities and our commitment to consider unitarisation whenever requested.

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The Secretary of State is clearly overflowing with excitement, and we are very pleased for him.

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T3. Recent statistics published by the Department show that 54,000 households in London are living in temporary accommodation and, as my hon. Friend the Member for Stretford and Urmston (Kate Green) said, 120,000 children are living in temporary accommodation this winter. Often, the standards are some of the worst, and the accommodation houses some of the most vulnerable. What steps will the Department now take to end the temporary accommodation crisis both in London and in the rest of the country? [903440]

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I thank the hon. Lady for that question. First, it is a very serious matter, which is why we have put more money into local authorities so that they can look at the quality of the private rented accommodation in which temporary accommodation now takes place. Secondly, on the point about children, we have made it clear that bed and breakfast accommodation should be acceptable for only an incredibly short period where children are concerned, and local authorities know that.

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T2. Will the Secretary of State assure me that he will set up cross-departmental arrangements with the Department for Transport and the Department for Digital, Culture, Media and Sport to ensure delivery of the Oxford-Milton Keynes-Cambridge corridor, as envisaged by the National Infrastructure Commission? [903439]

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First, may I congratulate my hon. Friend on becoming the champion for the Oxford-Milton Keynes-Cambridge corridor? I know he is very determined to do an excellent job, and he will make a great difference. The cross-departmental co-operation he talked about is absolutely essential. It is exactly what we are arranging, and I know he will help with it.

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T4. Earlier, the Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Rossendale and Darwen (Jake Berry), promoted the borderlands growth deal and Moray apparently hopes to finalise a growth deal in the summer, so will someone in this Government tell me what blockers are preventing the UK Government from signing up to the original non-city deal, the Ayrshire growth deal? [903441]

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As the hon. Gentleman will be aware, these growth deals are extremely complicated. That is why I have agreed to meet the backers of the Ayrshire growth deal to talk about how, for our part, the UK Government can take an exciting deal forward.

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T9. Does my hon. Friend agree that the ability to buy a home at an affordable price is vital to developing and enhancing social mobility and to realising the Government’s goals on aspiration and opportunity? Does he also agree that we must massively increase house building and speed up the process right across the country? [903446]

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My hon. Friend is absolutely right. We delivered 217,000 new homes last year, which is 50% more than the last year of the last Labour Government. We want to get that level up to 300,000. We have planning reform, release of public sector land and targeted funding to achieve that, which is crucial for key workers, the next generation and those on low and middle incomes.

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T5. City of Lincoln Council is aiming to build 500 homes in the next five years to help to tackle its waiting list of more than 1,000 house- holds. If the Government will not consider raising the borrowing cap on local housing revenue accounts, how do they plan to tackle the shortage of truly affordable rented housing? [903442]

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We have, of course, raised the cap by £1 billion. It needs to be done in a responsible way, because we have to consider the amount of debt that has been taken on, but we will keep it under review. That is one aspect of the huge drive towards building the extra homes we need. I have talked about some of those issues, including targeted funding and release of public sector land. We want to make sure that we get up to the annual target of 300,000 as soon as possible.

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Regeneration in Cleethorpes will be greatly assisted if the Government can conclude discussions with the local authority about a town growth deal under proposals by the Greater Grimsby project board. When do Ministers expect to reach a conclusion?

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I met members of the board of the Grimsby town growth deal on a recent visit to Cleethorpes and the town of Grimsby. I am sure that my hon. Friend will be as pleased as I am that the growth deal was specifically referenced in the industrial strategy, and I encourage him to contact the Secretary of State for Business, Energy and Industrial Strategy to talk about how it can be taken forward.

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T6. May I ask the new Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for South Derbyshire (Mrs Wheeler), whether she thinks that Government policy since 2010 has played any part in the sharp rise in rough sleeping? [903443]

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This is a very complex matter. The interesting thing that I find now that I am getting to grips with it as a Minister is the different layers of problems that people have in their chaotic lives. It is very important that different councils have moved on with building new council housing, including my own Conservative South Derbyshire District Council—I declare an interest as my husband was the leader. Different levels are really attacking the issue and it is going to be a pleasure to get my teeth into it.

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The Secretary of State attended the launch of the new all-party parliamentary group on new towns, chaired by my hon. Friend the Member for Telford (Lucy Allan). My right hon. Friend will know that the new towns and Milton Keynes were created because they were able to acquire land at a reasonable valuation close to its current use. That is no longer possible, because of the Land Compensation Act 1973. Among his many admirable ambitions for housebuilding in this country, will he agree to look at the Act and the possibility of reforming the valuation of land that is acquired?

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My hon. Friend speaks with great experience. He made a number of important planning reforms when he was a Minister. I will commit to looking at the issue he raises and point him to some of the work we have already done, including an amendment in the Neighbourhood Planning Act 2017 which allows the Secretary of State to designate planning zones.

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T7. The leader of Birmingham City Council wrote to the Secretary of State about financial support from Government to make safe Birmingham’s 213 tower blocks in the aftermath of the Grenfell Tower fire. Will the Secretary of State provide an update on the proposal submitted and whether the finances will be made available? [903444]

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We are working with Birmingham City Council on its request. As I said earlier, no request for financial flexibility will be turned down. We have received further information and we are working on it with Birmingham right now.

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My right hon. Friend the Chancellor provided money in the Budget for a national rental deposit scheme. What plans does the Department have to introduce that scheme, and how many families does it believe it will assist?

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We are certainly looking at that as part of our wider strategy, which I have already described. I am very happy to write to my hon. Friend about its particular impact on his constituency.

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T8. I find the level of rough sleeping in Chesterfield and across the country deeply humiliating as an MP, and it infuriates and disgusts my constituents. When Ministers walk past people living in sleeping bags, do they believe that it is the halving of councils’ Supporting People budget or the £5 billion cut to housing benefit that is most responsible for this national scar on our society? [903445]

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We have made it an absolute priority in government to help to fight rough sleeping and homelessness. We have committed to halving it by the end of this Parliament and to eliminating it completely by 2027. I share the hon. Gentleman’s concerns, but I hope that he agrees that this issue is not a party political football, and we should all work together across the House to deal with the issue.

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I am delighted that the new Housing Minister has agreed to work with me to improve tenant safety in respect of carbon monoxide poisoning. Does he agree with the National Landlords Association and Headway, a brain injury charity, that more needs to be done to protect the public at large from death or injury through carbon monoxide poisoning?

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I congratulate my hon. Friend on the tenacious way he has built the campaign. We will certainly listen to all voices on this issue. I am grateful to have had the opportunity to sit down with him to talk about his private Member’s Bill. We share the aim to make progress on carbon monoxide in both the key areas of his Bill. I look forward to working with him in future.

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T10. Gateshead Council, of which I am a member, has seen its Government funding cut by 52% since 2010. Fifty per cent. of its budget is spent on vulnerable children and adult social care and demand is rising. With over 90% of our properties in council tax bands A to C, the social care precept does not go near addressing the shortfall. Will the Secretary of State urgently address the shortfall in funding for children and adult social care in Gateshead and elsewhere now, and will he produce a truly fair— [903447]

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Order. It is very well meaning but topical questions are supposed to be shorter than substantives. That was just as long.

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Gateshead will receive a 1.5% real-terms increase in core spending power this year and, thanks to the steps taken in the spring Budget by my right hon. Friend the Chancellor, an additional £40 million to fund adult social care in the forthcoming financial year.

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Will the Ministry of Housing, Communities and Local Government work with the libraries taskforce at the Department for Digital, Culture, Media and Sport to see how Northamptonshire’s public libraries can all be kept open?

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Splendid. That exchange should be circulated to all colleagues.

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The Secretary of State will have seen the leader of Wakefield Council’s announcement this morning that he now supports a wider Yorkshire deal. That means that 18 of the 20 local authorities across wider Yorkshire support it. Does the Secretary of State agree that in addition to finalising the detail of any Sheffield city region deal, an important conversation now needs to be had with the 18 leaders about a wider Yorkshire deal?

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The crucial decision about any wider Yorkshire deal, if there ever is one, is in the hands of the local authorities concerned. We will be going ahead with the South Yorkshire deal, but earlier this week, as I am sure the hon. Gentleman is aware, we put forward a proposal to allow others, such as Barnsley and Doncaster, to take a different route, if they choose to do so.

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For the coming year, the Secretary of State has enabled councils to increase tax by 3%, compared with just 2% last year, but the cash limit has been retained at £5 when parity would be £7.50. That affects 88 small district councils. Will the Secretary of State consider a change?

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A number of people have made that representation. I have listened carefully and we will keep the issue under review. As my hon. Friend knows, the draft settlement is just that at the moment, and we are looking at it carefully.

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May I welcome and congratulate the new members of the team? Ending a private rented sector tenancy is now the leading cause of homelessness. Will the Secretary of State extend the mandatory licensing scheme for landlords in the private sector?

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I thank the hon. Lady for her question. We are looking closely to see where certain councils have introduced this. At the moment, it is something we are keeping under review.

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Waltham Forest Council, which covers some of the poorest wards in London, has had to put through more than £100 million in cuts. To what extent is that situation sustainable?

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The Government recognise the pressure on local councils and are determined to get them the resources they need, which is why there will be a real- terms funding increase for local authorities across the country this year, together with the flexibility to deliver more money for adult social care, in the hon. Gentleman’s council and elsewhere.

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Will the Government please commit to reviewing the situation whereby street homeless people are crossing local authority boundaries, going from one where there is little support to others such as Bristol, where there is a great deal?

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The hon. Lady asks a very interesting question. The taskforce will be looking at cross-county and rural-to-city issues. Perhaps we could meet to discuss this further after our first meeting on 1 February.

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If the Treasury Committee can recognise the social and fiscal benefits of removing the council house building borrowing cap completely, why cannot the Government?

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Of course, the borrowing cap has been raised by £1 billion, but it has to be done sustainably. We remain open-minded, however, and are keeping it under review.

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With Holocaust Memorial Day this week, does my right hon. Friend agree that on both sides of the House we really need to face up to anti-Semitism wherever we see it and whatever form it takes?

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Holocaust Memorial Day is a reminder to us all of the horrors of what mankind can do—of what we can do to each other—if no one speaks up. It is incumbent on all parties in this House to face up to anti-Semitism. I noted just a few days ago the Jewish Labour Movement was appealing to the Labour party leadership to throw out people who allegedly practise anti-Semitism. The Labour party talks about combating hate crime, but it has to show people that it really means it.

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Too many people moving into brand-new homes on brand-new housing estates struggle with poor or no wi-fi. Will Ministers work with developers to ensure that the necessary infrastructure is in place when these houses are being built?

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The hon. Lady is absolutely right to raise that issue. We have worked with local authorities and developers, but also with the Department for Digital, Culture, Media and Sport in relation to that.

Private Sector Pensions

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(Urgent Question): To ask the Secretary of State for Work and Pensions if she will make a statement on the Government’s plans to stop private sector pension abuse.

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The vast majority of employers do the right thing by their pension schemes, and members can expect to receive the pension benefits they have paid for throughout their working lives. The Pensions Regulator and the Pension Protection Fund were set up in 2004 to provide pension scheme members with a safety net to ensure pension benefits receive some protection when things go wrong—it is a fact that some businesses will fail. The PPF approach has been supported on a cross-party basis since 2004.

To prevent irresponsible employers from off-loading pension liabilities on to the PPF, the regulator was given a range of powers, including the ability to recover significant assets where employers failed to take account of the scheme. There are about 6,000 defined benefit schemes, however, and such cases are very few and far between. It is the responsibility of the regulator to strike a balance between protecting members and PPF levy payers, and minimising any adverse effects on the sustainability of employers and businesses when it comes to the regulation of defined benefit funding.

The regulator does not have the power to stop businesses paying out bonuses to executives or dividends to shareholders, but if it believes that a scheme is not being treated fairly, it will investigate to see whether the use of its powers is appropriate. The Government are clear, however, that where sponsoring employers can meet their pension promises, they should and must do so. That is why we have suggested ways of strengthening the current scheme to enable the regulator to be more proactive. In fact last February we published our Green Paper, “Security and Sustainability in Defined Benefit Pension Schemes”, which included suggested measures that could strengthen the powers of the Pensions Regulator by introducing punitive fines for actions that harm a pension scheme. We also set out powers to enhance the regulator’s ability to demand information to ensure effective governance and spot issues before damage is done.

Our manifesto in June 2017 reaffirmed this intent by proposing to give the regulator the power to impose punitive fines alongside contribution notices so that pension scheme members are fully protected. The details of the fine would be worked through with all the relevant stakeholders, but it would represent a significant strengthening of the deterrent. We also intend to make certain corporate transactions subject to mandatory clearance by the Pensions Regulator, but we must take care to ensure that these measures do not have an adverse effect on legitimate business activity and the wider economy.

I should tell colleagues that we have received 800 responses to the Green Paper, and they are being reviewed by the Department. The White Paper is in progress and will be published in the spring. Effective regulation is dependent on a prompt flow of information between the parties concerned, and on compliance with rules and processes. Following the publication of the White Paper, we will introduce new regulation to ensure that the regulator gets the information it requires to conduct investigations and casework effectively and efficiently. It remains the case that the Government support free markets, enterprise and businesses, but this has to be conducted responsibly.

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Yesterday, the Prime Minister chose to announce via the media, in part in response to the collapse of Carillion, that the Government planned to introduce tough new rules to stop private sector pension abuse. Carillion had 13 defined benefit schemes in the UK, with 28,500 members and a combined pensions deficit of £587 million. Between the end of 2015 and last year’s interim results, the difference between Carillion’s assets and liabilities almost doubled, from £317 million to £587 million. We know that profit warnings started to be issued in the summer of 2017. Given the severity of the financial problems facing Carillion, why did the Government not act then, rather than attempting to close the stable door after the horse had bolted?

We have argued for years that the Government should take better action to protect people’s pensions. The Government had the opportunity to act in 2013 and again in 2015, by supporting Labour’s amendments to pensions governance in legislation. More recently, the Work and Pensions Committee warned the Government of the need for protections and for more powers for the regulator. Although we welcome the Green Paper, the urgency has just not been there. Why did the Minister choose to ignore those warnings?

The Committee made a number of recommendations, including that the Pensions Regulator should have mandatory clearance powers for corporate activities that put pension schemes at risk, and that it should have new powers to impose fines at a level that would genuinely deter such dangerous and irresponsible behaviour. Why did the Government refuse to implement those recommendations at the time? Are the Government now ready to commit to implementing them fully? If the Government had taken action, Carillion’s massive debt accrual might have been arrested.

Given the scale of the liabilities and the concerns for other defined benefit schemes, what does this mean for the adequacy of the Pension Protection Fund? The collapse of Carillion has already led to a rise in pension scammers targeting those with pension pots. What about the defined contribution schemes that are not covered by the Pension Protection Fund? Will the Secretary of State investigate the apparent conflict involved in BlackRock being responsible for those schemes while simultaneously betting against their employer? Finally, can she advise the House what measures will be proposed in the White Paper, and when, exactly, they will be brought to the House?

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As Members on both sides of the House know, the regulator is an independent, arm’s length body. It was set up in 2004 after much discussion about how it should work and how it could best support pensioners when they needed its help. What it never did was to interfere with the running of a business; that was what was decided. We said that we needed to make sure that we could go further if we had to. That is why we have set about introducing a Green Paper—as I said, we have had 800 consultation responses—looking at where it is best to intervene, to make sure that we get the balance right. We do not want to tip the edge and unnecessarily cause harm to a business.

Profit warnings mean that a company will not get the profit that it expected—no more than that. We have to make sure that the Government do not precipitate anything that could be seen as negative from business. That is why we are looking at all these 800 responses, looking carefully and considering how to protect companies’ employees, protect pensions and move forward in the most conducive and careful manner. The new White Paper will be coming forward later this year.

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May I draw my right hon. Friend’s attention to the way the British public are reacting to this issue? They are seriously repelled by the notion that executive directors and even ex-directors should carry on drawing large payments at the same time as there is a mounting pension deficit. If this was what capitalism was really like, people would not want it. What are the Government going to do to draw the attention of businesses and executive directors to their governance responsibilities in these situations in the future, although this is nothing like as bad as the Maxwell scandal?

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I completely agree with my hon. Friend. This is about strengthening the corporate governance of organisations. This is about giving power to the boardroom. This is about giving shareholders responsibility. This is about having responsible businesses doing the right thing. Where we can ensure that that happens, and where we can look into investigating what is going wrong—should things be going wrong—it is right that we do. As I said at the beginning, most businesses—the vast majority of businesses, and there are over 6,000 defined benefit schemes—are doing the right thing, but where they are not, it is right that there is fury from the public to make sure that they do the right thing. That is why the Insolvency Service carries out investigations in this regard and gets money back where it can.

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Thank you, Mr Speaker, for granting this urgent question, and I congratulate the hon. Member for Oldham East and Saddleworth (Debbie Abrahams) on securing it.

That we are talking about private sector pensions again highlights the fundamental need to address the regulation of the pensions industry—something that the SNP has been calling for for years, but that has until now fallen on deaf ears. The BHS pension scheme was in deficit by more than £500 million. Carillion is estimated to be up to £900 million in the red, and there are over 5,000 other private sector defined benefit schemes in deficit, to the tune of £900 billion—a ticking time bomb for savers.

However, the real issue is that, while top executives make bad decisions and are rewarded for it, 11 million people who rely on a final salary pension could still be at risk of having the rug pulled from under their feet and of facing reduced entitlements should cases such as BHS or Carillion continue to be repeated.

The SNP has long called for the establishment of an independent pensions commission to ensure that employees’ savings are protected and that a more progressive approach to fairer savings is considered. Alongside that, will the UK Government make sure that the Pensions Regulator is now given the appropriate authority to step in and protect the interests of savers and pensioners before cases such as those of BHS and Carillion happen again?

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The Pension Protection Fund is there to do just that: to support pensioners. It does step in and support them where necessary. The hon. Gentleman is quite right: where businesses have not worked responsibly, we should be getting involved, and we did that when we saw the conditions with British Home Stores. What happened there is that anti-avoidance enforcement did take place, and £363 million was got back, so we did not have to use the PPF. Also, a prosecution did take place. All these instances have been different, but the hon. Gentleman is quite right: where there has been an abuse of the system, we will carry out an investigation and bring people to account.

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What action is my right hon. Friend taking in working with the Secretary of State for Business, Energy and Industrial Strategy to look at the conduct of the directors of Carillion in this regard? Specifically, following on from the point raised by my hon. Friend the Member for Harwich and North Essex (Mr Jenkin), what can be done now to recover any of this money for the people affected?

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I thank my hon. Friend. An investigation is going on. Not only is there one that has been initiated by the Business Minister, but the Insolvency Service will also be investigating what went on. If there is any evidence that untoward things have been done, a prosecution will follow. That is what we are about: we want businesses to act responsibly. They employ the majority of people in this country, so it is only right that we support them when they need our support and bring them to account when they are doing things wrong.

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I welcome the right hon. Lady back to this Department. The Government, of course, are responsible for the regulatory framework for pensions. Will she respond to the point raised by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) about defined contribution schemes? Are the Government looking at possible changes to the rules for those, as well as for defined benefit schemes, which the Minister has said the Government are looking at?

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We are not currently considering changing the rules on defined contribution schemes. In that instance a contribution has been made which will be protected and moved to another pension, whereas a pension in a defined benefit scheme is what someone was expecting to receive at the end, and will therefore be protected. They are very different schemes, and different protections and rules apply to them.

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Can my right hon. Friend confirm that constituents with existing Carillion pensions will receive 100% recovery through the Pension Protection Fund?

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I can indeed state that that is the case, but anyone who is concerned about a pension should call the free hotline. The number is 0800 756 1012. I know that my hon. Friend is a great supporter of employees and businesses in her local area.

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The Secretary of State does not seem to have grasped the fact that the decision to carry on paying dividends and to boost the bonuses of the board while running up a pensions deficit was made by the board itself. What will she do to prevent that from happening again?

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I do understand the gravity of what happened, but there is one thing that we never seek to do in the House. In 2004, after much discussion, we asked an independent arm’s length body to look into these matters. When there have been misdemeanours and irresponsible behaviour and things have gone wrong, we announce that investigations are under way, but we are not the investigator. What we do is legislate to ensure that people are brought to account—and if they have done something wrong, my goodness, we need to bring them to account.

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A number of my constituents have been affected by the Carillion situation. What will the Pension Protection Fund do to support those who have pensions through Carillion, and what more will the Government do to ensure that people with private pensions can be confident that investing their savings in a company pension fund is the right thing to do?

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I can reassure my hon. Friend that the Pension Protection Fund is there to provide a lifeboat. Those who have retired will receive 100% support, while those who have not will receive 90% support, with a cap. That is what we are here to do: to protect the people who have done the right thing in saving for their future and to look after them in a responsible way, while also ensuring that regulations and processes exist to bring to account those who have done the wrong thing.

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BlackRock was responsible for Carillion workers’ pensions, while simultaneously betting against their employer on the stock market. What measures will the White Paper contain to ensure that such a conflict of interests cannot happen again?

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We received 800 responses to the Green Paper. We want to learn from the people who know most about these matters what they think is the best way to tackle the problem, because obviously we do not want such things to happen again.

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What impact would renationalisation below the market have on pension funds?

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It would be an absolute disaster.

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My constituent Michael Evans, a retired employee of Barclays, has raised serious concerns about the future of its pension fund. Given the £7 billion shortfall, is Barclays moving its liability to its investment branch in the hope that it can avoid having to cover the deficit?

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People who are concerned about their pensions should take advice from the Pensions Advisory Service. That is the best thing they can do. Obviously, the regulator will look into any incidents that it thinks need to be investigated.

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I welcome the Government’s commitment to do more to protect the pensions of private sector workers. Does the Secretary of State agree that it is absolutely necessary to have private sector providers of public services, and that the Government should continue to support them?

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Of course it is important that we have the private sector delivering an array of services, because as the world gets more complicated and more specific, we need people with specific skills to go forward and do that. That is the best way to have a well-functioning country.

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The creation of the British Steel pension scheme mark 2 created fertile territory for unscrupulous pension advisers to swoop in like vultures and exploit vulnerable people. What lessons have been learned from the British Steel experience, and what will the Secretary of State do to ensure that we do not see the whole sorry tale of Carillion leading once again to the privatisation of profit and the socialisation of risk?

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What we have learned from that is that straight away, eight companies were banned from doing what they had done in any kind of pension scam. We are also going to bring together all the advice under a single body so that people are well aware of what they can and should be doing and whether they have done the right checks to ensure that they are dealing with a positive organisation for their pension.

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Workers have been encouraged to take part in buying their pensions, and they need to have confidence in their scheme. My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) mentioned the fact that fat cats are seen to bear no risk in this process. What more can we do to achieve greater transparency in how private pensions work within companies? What can we do to enable people to get the best possible information to ensure that they are not being sold short while other people seem to float high above all the risk?

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My hon. Friend raises a key point. There does need to be transparency. A pension is something that people invest in all their lives and hope to recoup when they retire, so transparency is key. Our White Paper will seek to determine best practice and, in parallel, to set out stronger corporate governance within pensions organisations.

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I should like to thank you, Mr Speaker, for granting an urgent question on this important issue. I should also like to welcome the Secretary of State back to the Front Bench. Is she aware that, under the current rules, pension obligations are unsecured, meaning that insolvent companies fund their pension schemes only when they have compensated their other, supposedly more important, secured creditors? If so, has her Department considered carrying out a review of those rules so that employees with private pensions can be given a justifiably higher priority in future?

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That is key—where do they fit in the line of creditors? Are people being given the correct protection for their pensions? That is why the Pension Protection Fund was brought in. Again, this is something that needs to be brought forward under the governance rules for pensions.

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The whole subject of pensions is very complex. In the context of providing advice for people who are looking for a pension, or who already have one, what action are the Government taking to ensure the better delivery of financial and debt advice?

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The Financial Guidance and Claims Bill, which we will be debating straight after this urgent question, deals with the advice and support that people can get in order to understand what options are on the table. That represents a positive move by this Conservative Government to allow people to control and understand their finances, because they need to know where to put their money and be assured that it will come back to them in a good pension.

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Further to the question asked by my hon. Friend the Member for Bishop Auckland (Helen Goodman) and in the light of Carillion’s board members rewarding themselves with bonuses while allowing the pension deficit to grow, does the Secretary of State agree that she needs additional powers to bring such executives to account for their corporate greed and irresponsible behaviour?

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The situation is being assessed at the moment, and what happened is being investigated. The regulator already has the power to look into anti-avoidance measures and enforcement, which could be utilised to do precisely what the hon. Lady talks about. Strengthening the regulator’s hand was in our manifesto, and we will be bringing that forward in the White Paper.

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Hon. Members are understandably focusing on the directors of Carillion but, having been through the BHS investigation conducted by this House, I encourage my right hon. Friend to look closely at the expertise, advice and powers available to pension trustees.

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I will indeed do that. My hon. Friend knows a lot about such matters. We will take advice such as that and the 800 responses to the Green Paper into account when drawing up our solution.

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Over the past 30 years, successive Governments have made promises from time to time about strengthening the rules around pension schemes, but nothing happens. The Carillion situation will have a major impact on the west midlands supply chain. When are we going to get tough on directors and get some tough legislation? The White Paper will not be worth the paper it is written on unless the Government do something positive.

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The hon. Gentleman is right that we are looking for ways to bring to account those who have not acted scrupulously. The regulator has taken measures, and they have proved successful. For example, BHS was prosecuted and we recouped £363 million. We have to adapt to situations as they arise and try to pre-empt other things, because none of the cases that have been mentioned today resulted from the same action. The hon. Gentleman is right that we have to ensure that unscrupulous businesspeople are brought to account, because we need good private business and good entrepreneurs.

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I applaud the Prime Minister’s call for tougher new rules for executives who put workers’ pensions at risk. My constituents want to be confident that private pensions are secure and sustainable. After all, we have encouraged them to take them out. To put my constituents’ minds at rest soon, will my right hon. Friend please give an assurance that the Government are taking matters seriously?

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My hon. Friend is right to raise that point. The people watching at home who have a pension or are thinking about investing in one want to know that they are safe. They also want to know what the Government are doing to ensure that they will be safe going forward. That is exactly what we in intend to do with the White Paper by reinforcing corporate governance measures and making them tougher.

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As Carillion owes millions of pounds to subcontractors such as small plumbing companies, it is inevitable that there will be other insolvencies. If a plumbing company goes under, its nominal liabilities transfer to fellow employers through a multi-employer pension scheme. That is clearly unfair, but it happens because the PPF refuses to act as guarantor of last resort for multi-employer schemes. When will the Government end that anomaly? If they will not, will they support my ten-minute rule Bill that would sort out the situation?

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I am aware that that was debated with the Pensions Minister 10 days ago, and he is looking specifically at the points the hon. Gentleman raised then. The hon. Gentleman is fighting a good cause, and I am sure that we will be able to come up with a solution.

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The best form of pension protection that anyone can have is a sustainable employer. While the Pensions Regulator has wide-ranging powers, they are rarely used and it is often a bit toothless. Is the Secretary of State satisfied that any new powers, welcome though they may be, will be backed by proper resources?

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When we bring forward new powers, it is vital that they are workable, that they have a strong, secure footing and that they are affordable. We are looking at that as we review how to introduce stronger legislation.

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As part of the Tata Steel-Thyssenkrupp merger, workers faced the slashing of their pension funds if they joined the PPF or if they joined a new scheme with reduced benefits. Others opted for personal plans, leading to a feeding frenzy of mis-selling. Does the Secretary of State think the steelworkers of Wales were treated fairly, considering that the new company’s annual sales are estimated at £15 billion?

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We have to make sure that we look after people with pensions. We also have to ensure that we keep companies going as a viable concern. At the time, this was deemed to be the best option for the future. We always have to make sure it is the best solution at the time, and we have to secure future legislation to ensure that we have better regulation and better law in place.

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Even this weekend I heard and saw some commentators, who really should know better, say things such as that Carillion pensioners risk losing their pensions. Can the Secretary of State confirm what percentage of their anticipated pension many Carillion pensioners can now expect to get through the PPF?

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My hon. Friend raises a good point. Those who are in receipt of a pension will receive 100%, and those who receive a pension in the future will get 90%, subject to a cap. People who are concerned about their pension should rest assured, and they can always go to our free helpline.

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I warmly welcome the Secretary of State to her new position and thank her for the reassurances she has given the House this afternoon. GKN employs 340 people in Telford and is currently the subject of a proposed hostile takeover. Will she confirm that the safety of pensions at GKN will be a priority for her Department if the takeover proceeds?

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That is a matter for the Pensions Regulator, but obviously we have the Pension Protection Fund in place, and we will be looking to ensure that pensioners are safe and protected.

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How is it that some of these private sector pension fund deficits are allowed to get so large before any action is taken?

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We allow businesses to run themselves without interference from Government, and therefore we do not know the complete structure of their profit and loss, and of their assets and liabilities. Should anyone wish to raise a concern about their business, they are free to do so with the regulator. With our combined corporate governance review and new legislation, we will make sure that pensions are on as firm a footing as possible. We will make sure that such abuses do not happen.

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I am sure the Secretary of State will agree that the recent prosecution of Dominic Chappell by the Pensions Regulator should put directors who take decisions that might endanger their employees’ pensions on notice of the liabilities they could face. But will she reassure me that the role and powers of the Pensions Regulator, particularly how much further we can go in attaching personal liability to those responsible for disastrous decisions, will be part of the White Paper?

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I reassure my hon. Friend that that is exactly what we will be doing. We are looking at how we empower the Pensions Regulator and, if need be, how we allow it to levy fines. It has to be a balanced response, not a knee-jerk response, and we have to make sure it works for both pensioners and businesses.

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When a major UK business collapses it is incredibly important that both existing and future pensioners are given reassurances about their situation. In the case of BHS, this House elected to constitute a joint Select Committee inquiry to consider aspects of both the pensions and the business. Does she agree that a joint Select Committee inquiry looking into both the pensions and business aspects of the collapse of Carillion would be welcome?

Secondly, in the worst-case scenario, existing pensioners will get 100% of what is due to them through the Pension Protection Fund, and future pensioners will get 90%. The PPF, with assets of some £29 billion, is extremely well funded and capable of looking after the worst-case scenario.

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My hon. Friend, who has a lot of experience in these matters, is right in saying that the Pension Protection Fund is robust. It has a lot of resources, so people are safe and will be protected. That is what they need to know now. The Government have very clearly, from the moment this happened, set out the support for pensioners, so that they knew that their pensions were safe and they could go to work knowing that they were being looked after. He is quite right: we have to make sure that we are taking the right approach going forward.

Points of Order

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On a point of order, Mr Speaker. On Friday, the Secretary of State for Justice and Lord Chancellor came to my constituency and attended a meeting in Redbridge town hall. I first knew about this today, from the website of the Ilford Recorder, to which the Secretary of State has given an extensive interview talking about policing, crime, youth crime and other issues relating to my borough and my constituency. He did not have the courtesy to inform me—nor did he inform the leader of the council, Councillor Jas Athwal, or anybody else in Redbridge, except a few selected councillors—that he was coming to my constituency.

I have informed the Member today, through the answering machine in his House of Commons office, of this point of order. I tried five numbers at the Ministry of Justice, but all were unobtainable, including the public number given to me by the House of Commons Library. At least I had the courtesy to inform him that I was raising this point of order, but, Mr Speaker, I seek your advice. Given that Ministers will be quite active in coming to constituencies in the coming months, can we have it made clear that they should at least inform the Members for the constituencies that they are going to visit?

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I am grateful to the hon. Gentleman for his characteristic courtesy in giving me advance notice of his intention to raise that point of order. Moreover, the House has just learned from his detailed description of the prodigious efforts he made to contact the Secretary of State for Justice and Lord Chancellor, even if ultimately they were to no avail. I thank him, as I say, for giving me notice of the point of order.

As I have said on many occasions, colleagues, it is a strong convention, albeit not a rule, that a Member should give reasonable notice to a Member whose constituency he or she is intending to visit in a public capacity of the fact of that prospective visit. Apart from anything else, I regard this as a matter of courtesy.

I would say on this occasion that I am surprised to learn of this development, because I know the Secretary of State. Ordinarily, he would be regarded, I think, as one of the most courteous Members of the House. I do regard this as a lapse. It is regrettable and I hope that it will not happen again. We ought to treat each other with courtesy, which means giving some advance notice, as I have said.

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On a point of order, Mr Speaker. I seek your guidance as to whether you have received notification from the Secretary of State for Work and Pensions that she will make an oral statement on personal independence payment. As you may be aware, late on Friday afternoon, the Government put out a written statement announcing that they would not appeal the High Court judgment of 23 December 2017 that in effect reversed the emergency PIP regulations that they introduced early last year.

As I am sure you recall, Mr Speaker, those regulations were brought in without a vote of the House as a negative statutory instrument despite two urgent questions, an emergency debate and widespread concern about their impact. I would be grateful for your guidance on how Members might have the opportunity to question Ministers in detail on this vital policy change, which will affect more than 150,000 people—primarily those with mental health conditions.

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I am grateful to the hon. Lady for her point of order. In short, I have received no notification from the Secretary of State for Work and Pensions of an intention to make a statement on that matter. As the hon. Lady will know, the Secretary of State is in her place; she is welcome to come to the Dispatch Box and respond if she wishes, but she is under no obligation to do so.

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indicated dissent.

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She does not wish to do so at this time. The hon. Member for Battersea (Marsha De Cordova) should table questions and see where she gets. If she and her colleagues judge that they wish to seek a debate on the matter, it is open to them to do so. For now, she has aired her concern and it will have been heard by those on the Treasury Bench.

Financial Guidance and Claims Bill [Lords]

[Relevant document: Third Report of the Work and Pensions Committee, Protecting pensions against scams: priorities for the Financial Guidance and Claims Bill, HC 404.]

Second Reading

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

The Bill will reform the current financial guidance service landscape to improve outcomes for people in their everyday lives. It will bring about two changes. First, it will restructure the financial guidance landscape for members of the public by creating a new single financial guidance body and providing funding to the devolved authorities for locally commissioned debt advice. Secondly, it will move the regulation of claims management services from the Ministry of Justice to the Financial Conduct Authority. Both measures will benefit members of the public and provide a sustainable legislative framework for public financial guidance and the future regulation of claims management companies.

Ensuring that people, especially those who are struggling, are easily able to access free and impartial financial guidance to help them to make more effective financial decisions and to improve their confidence in dealing with financial service providers is an important step towards improving people’s financial capability. In addition, ensuring that people are able to access high-quality claims management services speaks to the Government’s commitment to ensuring that action is taken when markets work against consumer interests.

The provisions in part 1 of the Bill follow three consultations, conducted by the previous Conservative Government, on the provision of pensions and money guidance and the provision of advice on debt management. In particular, the consultations examined the demand for such services, how their provision should be structured and how to make that provision more effective for consumers. The final consultation revealed a broad consensus for a single body for financial guidance. As a result, the Bill will bring together the important work done by the Money Advice Service, the Pensions Advisory Service and Pension Wise to create a single financial guidance body. The relevant measures have received strong support from industry, stakeholders, charities and consumer groups.

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It is vital that we all work across party lines on financial guidance. I encourage the Secretary of State to place on the new financial guidance body a duty to promote financial resilience. Every year in Britain, 2 million people have unforeseen sickness absence. They cannot cope as their income suddenly falls. Eight out of 10 people in this country have very little savings, or none at all. It would be a real step forward to have a body that promotes financial resilience.

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The hon. Gentleman makes an important point. Once the new body is set up, it will be able to see what is needed in the public arena and shape and craft what it does. That is important, as is debt advice for vulnerable people, who need to be able to plan a path for their future.

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The fact that household debt in this country now stands at £1.9 trillion shows just how important it is to give people knowledge and understanding about the management of their finances. I welcome the Bill. Will the Secretary of State assure us that it will help constituents such as mine in Taunton Deane, who currently have to go to a plethora of bodies to get advice, to make the decisions that we hope will prevent them from getting into debt?

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My hon. Friend raises a very good point about how to help those who are most vulnerable—how to help them to get out of debt. Debts are at high levels, but they are lower than they were in the first quarter of 2010. The latest figures, for the third quarter of 2017, showed that they had gone down, but they are still high, and we need to help people understand their finances. Understanding really is key to this—they need to understand what is going out, what is coming in and how to get life on a firmer footer, so that they can go forward with confidence.

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rose

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rose

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If I can make a bit progress, I will take some more interventions.

Old Mutual Wealth has noted that consolidating the Money Advice Service, the Pension Advisory Service and Pension Wise into a single financial guidance body presents an opportunity materially to improve the quality and reach of Government-led primarily industry-funded services to encourage consumer engagement. Accordingly, the new body will ensure that people have access to the information and guidance needed to make the necessary and effective financial decisions that we all have to make throughout our lives. This information, guidance and, in respect of debt, advice will be not only independent and impartial, but free at the point of use, making it accessible to all those who need it. By merging those services into a single body, we will remove duplication of services, increase the efficiency of the service and ensure that those who require information, financial guidance and debt advice know exactly where to find it.

A single body also gives us the opportunity to provide a more seamless customer journey, doing the joining up behind the scenes. Importantly, it provides a hook back into the customer for follow-up support. The Government are concerned about low levels of financial capability in the UK. We recognise that not enough people know how to manage their money effectively, which is why we are taking decisive action through the Bill.

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I am very grateful to the Secretary of State for giving way. As she seems to be acknowledging, the evidence suggests that too many people do not have sufficient knowledge to make the best choices about their pensions. On that basis, does she agree that it is important that the new body concentrates on trying to provide as much face-to-face active support and guidance as possible, and does not simply rely on websites, which are a much more passive form of assistance?

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The hon. Gentleman raises a very good point. Different people glean information through different channels, so a website works for some and telephones work for others, and there will be a need for face-to-face advice. At the moment, that is being offered through the citizens advice bureaux. Therefore, he is right in saying that face-to-face advice is important, too.

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One big problem with information for ordinary people is that it is complex. Will right hon. Lady give us an assurance that any information or advice that is being given is in simple language that people can understand? That is always the big difficulty with lots of forms—people just do not understand them.

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Again, a valid point—the advice has to be impartial, free and in a language that people understand. Sometimes people might not feel confident to say that they do not understand the terminology, because they think that there is a presumed knowledge that might not be there. I concur with what the hon. Gentleman says.

The new body will have a number of statutory objectives: to improve the ability of people to make informed financial decisions; to support the provision of information, money and pensions guidance and debt services in areas where it is specifically lacking; to ensure that information, guidance and debt advice is clear, cost-effective and not duplicated elsewhere; to ensure that information, guidance and debt advice is available to those most in need, particularly people in vulnerable circumstances; and to work closely with the devolved authorities.

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Further to the question asked by the hon. Member for Taunton Deane (Rebecca Pow) about the rise in household debt, does the Secretary of State accept that there is a particular problem with household debt generated by high-cost credit lenders, such as BrightHouse? Under clause 10, the Financial Conduct Authority can levy to cover the costs of the new single financial guidance body. Can she reassure me that high-cost credit companies such as BrightHouse will be covered by such a levy, and will she tell the House what this body will do to encourage the take-up and awareness of the products offered by credit unions—a far lower cost of debt provision?

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First, debt is not rising. It has actually fallen over the past eight years, but it is still too high. This new body will offer guidance and advice, so that people understand what loans they are taking out and, fundamentally, what paying them back will mean for them. Secondly, we are today putting in place the legislative framework to set up the body, but it will determine the key things it wants to pursue. I am convinced that it will listen to the advice that the hon. Gentleman and others put forward.

The new body will also provide advice on a breathing space scheme, providing additional support to the Government’s policy development. The scheme will allow an individual in problem debt to apply for a period of protection from further fees, charges and enforcement action, alongside establishing a statutory debt management plan. One of the new body’s key functions will be to support over-indebted consumers, ensuring the provision of high-quality debt advice that is free at the point of use. Last year, the Money Advice Service spent £49 million to fund 440,000 debt advice sessions. We want the new body to build on that good work.

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Further to the point that the hon. Member for Nottingham East (Mr Leslie) made about financial resilience, is the Secretary of State aware that household debt as a proportion of household income rose from 93% to a peak of 157% in 2008, under the previous Government? Does not that demonstrate that these kinds of measures are essential in helping people to make sensible choices about their finances?

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My hon. Friend makes a good point. Household debt rocketed under the previous Labour Government, and we are now ensuring that it comes down, because it is still too high. I particularly appreciate that the Bill has cross-party support, because we all know that we need to help people who are in debt.

As a result of a range of broader reforms and initiatives, such as automatic enrolment, which has increased the number of people saving into pension schemes and the pension freedoms that allow anyone aged 55 and over to take their whole pension as a lump sum without paying tax on the first 25%, the number of people looking for high-quality, impartial financial guidance continues to rise. We look forward to the new body meeting those challenges, building on the existing good work of the Money Advice Service, the Pensions Advisory Service and Pension Wise.

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Has the Minister considered whether the breathing space will apply to public as well as private sector debts, because many people find that they are pursued more vigorously by those creditors?

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While looking at this respite, we are having a call for evidence to determine how best to proceed, and no doubt the hon. Lady’s point will be raised.

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I will make a little progress before taking any more interventions, because otherwise I will never get through this, and I need to.

The second part of the Bill makes provision to strengthen the regulation of claims management companies. As many hon. Members will be aware, there is evidence of malpractice in the claims management sector in the form of disproportionate fees, nuisance calls, poor service, and the encouragement of fraudulent claims.

Following an independent review of claims management regulation led by Carol Brady, the Government announced in the 2016 Budget their commitment to clamping down on malpractice in the sector. Part 2 delivers this commitment in two key ways. First, it transfers regulatory responsibility for claims management regulation from the Claims Management Regulator, a unit based in the Ministry of Justice, to the Financial Conduct Authority. Secondly, it introduces new measures to ensure that consumers are protected from being charged excessive fees. Those measures include a duty on the Financial Conduct Authority to make rules restricting fees charged for services provided in relation to financial services and products such as payment protection insurance claims, and a power for the FCA to introduce caps in other claims sectors should the need arise.

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It is great to see you back in your rightful place, Mr Deputy Speaker.

May I take the Secretary of State back to the first part of the Bill and the devolved functions in terms of debt advice? How will they be funded? Will it be based on a percentage share—a population share—of expenditure in England? Will it be based on Welsh need, or, as I read the Bill, will the Welsh Government send the Treasury a bill for its functions and then that will be levied by the FCA?

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I reiterate what the hon. Gentleman said by welcoming you, Mr Deputy Speaker, to the Chair.

The money will be collected. At the moment, what is spent and how it is spent is down to the new body being formulated. However, it will be done by Government grants and then money will be taken back—financial bodies will be paying in. Obviously, going forward, where there is most need is where most money will be going. That is how it will be viewed.

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I very much welcome part 2, which does improve protections. Is my right hon. Friend aware that the Justice Committee looked at this issue in relation to changes to the small claims limit in personal injuries matters? Will she bear in mind the very strong evidence suggesting that, because the likely increase in the small claims limit will mean more litigants in personal injuries cases, the current cap in relation to payment protection insurance should be extended to personal injuries cases in order to extend consumer protection? Will she consider a “fit and proper person” test in relation to claims management companies operating in this area?

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My hon. Friend always provides wise words. I can assure him that those matters will be taken into consideration.

This is not to say that claims management companies should be regulated out of existence. The Government believe that these firms provide a valuable service to consumers who may be less likely or unable to bring claims themselves. A well-functioning CMC market can also benefit the public interest by acting as a check and balance on business conduct. The measures therefore aim to strengthen claims management regulation in the round in order to enhance both consumer protection and professionalism in the sector.

The Bill ensures that those who use claims management services to make claims in relation to PPI are protected in the interim period before the FCA exercises its duty to introduce a fee cap. The Bill does this through the provision of an interim fee cap on PPI claims management services during the period between Royal Assent and implementation of the FCA cap. The Bill will cap these fees at 20% of the final compensation amount. The Association of British Insurers welcomed the claims management regulation measures, stating:

“Confirmation of tougher regulation of claims management companies cannot come soon enough for people who are plagued by unsolicited calls and texts.”

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One thing that the Bill was silent on, until it was amended by the Opposition in the other place, is cold calling. In the seven years since the Legal Aid, Sentencing and Punishment of Offenders Act 2012, the Opposition have been pressing to have cold calling and spam texts outlawed. Is the Secretary of State going to say anything about that? Does she agree that there is no defence for having this blight on the lives of almost everyone in this country, and that it should not just be regulated but banned?

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There will be a ban on pension cold calling, and we will work through the detail of how that will work best for consumers at home.

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Will the Secretary of State give way?

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If I may, I will continue a little bit further and then I will take another question.

I will reflect on the passage of the Bill through the Lords. There was overwhelming support in the other place for the measures originally contained in the Bill. The amendments in the other place sought to include a Government manifesto commitment—a debt respite scheme—because noble Lords were concerned about legislative space. Some amendments made explicit in the Bill what was always implicit in policy, including making it clear that the single financial guidance body’s services are free at the point of use, and ensuring that the information, advice and guidance are impartial.

Other changes were more substantial, but none the less welcome. These ranged from the inclusion of a clause making it a criminal offence to impersonate the body to safeguarding clauses for its wind-up and requiring the FCA to create rules on signposting individuals to the body. Further additions include an interim fee cap for PPI claimants, which will ensure that CMCs charge fair and proportionate fees in relation to financial services claims during the interim period between Royal Assent and the introduction of the FCA’s fee cap, and making provision for the establishment of a debt respite scheme, which I will expand on shortly.

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Does the Secretary of State share my concern about the UK Government’s intentions with regard to adopting the provisions in my ten-minute rule Bill to do with director-level responsibility for unsolicited marketing communications? The Government have on two occasions set themselves a deadline to adopt this legislation, and on two occasions the deadline has passed. I hear what the Secretary of State has said about the provisions in this Bill, but is she concerned, like me, that it will be confined to protecting consumers with regard to pensions, not in a whole host of areas right across the marketplace?

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We are of course looking at pensions today, but other rules, regulations and laws are in place to protect people from unsolicited, unwanted cold calls and the Department for Digital, Culture, Media and Sport is looking at how to strengthen them further. I now want to address some of these issues.

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I will briefly give way but I will then continue with my speech.

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I listened very closely to what the Secretary of State said about the breathing space, which is a really welcome period to help individuals —she mentioned individuals—to sort out their debts without getting into more problems. Will she confirm that that also covers households and families so that it helps the whole family, not just the individual?

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When people call seeking advice and support, they may be doing so for themselves or for the household—for example, they may need respite for all the family—and if so, they will invariably be looking for help not just for themselves, but for their family in its entirety.

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May I welcome my right hon. Friend to her new position? As the former Minister with responsibility for telecoms, I was involved in trying to stamp down on cold calling. It may not be necessary to ban cold calling entirely, but I certainly welcome the fact that the Bill has been amended to take account of the knock-on effects of claims management companies on cold calling. I hope that the Secretary of State will comment on the need to make it explicit that the new regulator must consult Ofcom on some of these issues. Ofcom is the body charged with cracking down on cold calling. We often forget that when we introduce measures that are consumer-friendly—rightly, to allow people to have redress—that can, unfortunately, inspire some of the less scrupulous to up their game in terms of cold calling.

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I thank my right hon. Friend for his intervention. No one knows more about this subject than him, and I am glad he has put that on the record. These are all things that we need to consult on to make sure that we get the new regulation right.

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On the question of cold calling raised by my right hon. Friend the Member for Wantage (Mr Vaizey), the cold calling provisions appear in clause 4 in part 1 of the Bill. Could the Secretary of State clarify whether those powers to prohibit cold calling will apply not just to financial guidance but to claims management companies, which are the topic of part 2? I hope that the answer is yes.

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That is our intention and that is what we will do, but those finer points will be worked out by the body as it works responsibly on behalf of UK citizens.

I want now to address issues that I know will be of interest to hon. Members. The Government have been clear that we will not stand for unlawful, persistent cold calling made by companies in the claims management sector. Cold calling is already illegal under certain circumstances. Under the privacy and electronic communication regulations, we have forced companies to display their numbers when they call, made it easier to take action against those involved in making the calls, and strengthened the powers of the Information Commissioner’s Office to impose fines.

That being said, a number of companies continue to act disreputably, so it is only right that the Government continue to take steps to further regulate the sector. That is why the Government committed in the other place to introduce measures to tackle those issues. The Department for Digital, Culture, Media and Sport is currently working through the details of an amendment to prohibit CMCs from making live, unsolicited calls unless the receiver has given prior consent. That step, combined with the Government’s previous actions in this area, should act as a warning to those acting unlawfully that we will not rest until the problem has truly been eradicated.

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rose

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If I can continue for a little longer, I will take some more interventions.

The Government welcome the findings of the report of the Select Committee on Work and Pensions exploring how to protect pensions from scammers. We remain committed to protecting savers from pension scams. We have already announced that we are banning pensions cold calling, tightening HMRC’s rule to stop pension scammers and fraudulent schemes, and preventing the transfer of money from occupational pension schemes into fraudulent ones.

The Government are currently reviewing the alternative proposals for banning cold calling under the Bill. We have also listened to concerns about the risks of not receiving sufficient guidance or advice prior to taking advantage of the pensions freedoms, and we are currently considering the amendments recommended to ensure that members of the public are aware of the importance of receiving guidance.

Hon. Members will also be interested in the addition of the provision for a debt respite scheme, which includes a breathing space period and a statutory debt repayment plan. We understand the valuable additional support that the scheme could provide for thousands of vulnerable individuals and want to implement a breathing space scheme as quickly as possible.

The Government are pressing on with policy development. We have already set out a firm timetable for consultation and are continuing to work closely with a wide range of stakeholders. The call for evidence on breathing space was published in October last year and has now closed. After responding to that call for evidence, we will consult on a single policy proposal. The Bill gives us an enabling power to lay regulation to establish the scheme after receiving advice from the single financial guidance body on the design and certain aspects of the scheme. It is important that we take time to get this right. The scheme will achieve its intended benefits for indebted individuals only if it is properly designed. I look forward to the Government working constructively with hon. Members so that we can enable a scheme to benefit vulnerable families as quickly as possible.

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One of the important things that the Bill does is to regulate nuisance cold calling. It is sometimes tempting to dismiss it as merely a nuisance, but it is more than that for some vulnerable people. A constituent has emailed me to say:

“All my friends and family have signed up to the TPS, but are still bombarded by these parasites. Our friend who suffers from dementia seems to get several a day, as I check his phone calls each time we visit. These vulnerable people…say yes to anything”,

even if they have not had an accident. My constituent adds that

“TPS does not work…The only way to stop this abhorrent practice is for the regulator to hand out punitive fines”.

Will my right hon. Friend both maximise the scope of the Bill and encourage the regulator to clamp down hard on that kind of behaviour?

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I thank my hon. Friend for raising that important point. I bet that many constituents could bring forward similar cases. The maximum penalty for breaches will remain the same; that is up to half a million pounds. We must make sure that people do not abuse the system, which is why, particularly in this Bill, we are looking at ways to ban pension cold calling.

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Will the Secretary of State give way?

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I will, but this intervention will be the last one.

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The Secretary of State is being extremely generous. I sense some puzzlement on both sides of the House that the Government are pulling their punches on cold calling. There is to be greater regulation; that is to be extended in some areas. Apart from the cold callers themselves, the consensus is that this should be banned. That includes claimant organisations such as the Association of Personal Injury Lawyers. Why will the Government not undertake now to ban spam texts and cold calls?

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We have brought that forward. That will be for this Bill. For pensions, there will be a ban. It is about working out how that is done, how we deliver it and how it is possible, but that is the intention.

Hon. Members will no doubt be aware that in October the DWP took on responsibility from the Treasury to work with regulators, the industry and other sectors to create a pensions dashboard. That digital interface would allow individuals to see all their pension savings in one place by collecting information about pensions held with different providers. We are conducting a feasibility study to explore the key issues and determine a path towards implementation. We expect to be able to report on that in March.

The Government believe that the needs of the consumer must be at the heart of the dashboard’s design. We want to maximise people’s engagement with their pensions while maintaining their trust. We will ensure that people’s interests are properly safeguarded and their information protected. As part of the study, we are also considering what role, if any, the single financial guidance body may have in relation to the dashboards.

I firmly believe that the Bill is useful, fair and has the individual at its heart. Its goal is to ensure that people are easily able to access free and impartial financial guidance to help them to make more effective financial decisions. Having access to guidance will boost their confidence when dealing with financial service providers and it is a crucial step towards improving their financial capability. The Bill sends a clear message to CMCs by transferring regulatory responsibility to the Financial Conduct Authority, providing a stronger framework to ensure that individuals are accountable for the actions of their businesses, and by introducing fee-capping powers to protect consumers from excessive fees.

This lies at the heart of Conservative philosophy. It is about understanding how an individual can be stronger by understanding their finances and, where possible, by not allowing themselves to get into debt. It is about supporting the individual, the family and the community, and they can best do that by understanding their finances. I look forward to having a constructive and positive dialogue in this House.

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How lovely it is to see you in your place, Mr Deputy Speaker; I extend my good wishes to you.

It was remiss of me not to welcome the Secretary of State to her place during the earlier urgent question. I congratulate her and look forward to working with her, possibly not always in the same tone as today. I think this will be a constructive debate, but there is a lot for us to discuss in the Work and Pensions portfolio.

I thank the Secretary of State for outlining the content of the Bill. I take this opportunity to thank Members of the other place who have spent many months scrutinising it. Although concessions have been made, we believe that several more are still needed. However, we recognise the importance of the Bill’s stated aims: principally, to increase the levels of financial capacity, reduce the levels of problem debt and to improve public understanding of occupational and personal pensions. As such, we will not oppose it.

As has been explained—I will rush through this bit—the Bill is in two parts. The first establishes a new arm’s length entity to provide money and pensions guidance and debt advice. This body will replace three existing publicly funded consumer bodies: the Money Advice Service, the Pensions Advisory Service and the Department for Work and Pensions’ Pension Wise service. The new single financial guidance body will also have responsibility for the strategic function of supporting and co-ordinating the development of a national strategy. To ensure that the Bill’s stated aims are met, we want the new body to be a highly visible and properly resourced organisation able to identify and support the many people who need help.

The second part of the Bill introduces a tougher and welcome regulation regime to tackle conduct issues in the claims management market. We can also support that provision.

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Is not one problem that risks inhibiting the success of the new single financial guidance body the fact that we do not know where the highest levels of problem debt are in this country? Might it not be sensible to take the opportunity in Committee or on Report to consider the example of an American piece of legislation, the Community Reinvestment Act, which requires all lenders to publish anonymised details of the debts taken out with them so that community organisations and debt advice bodies can know where to target their expertise and help?

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My hon. Friend makes a valuable point. I am not familiar with that particular piece of American legislation, but I will look at it and see what we can do in terms of tabling amendments in Committee.

As we have heard, the FCA will regulate claims management company activity as a regulated activity, taking over responsibility from the Ministry of Justice. The Bill is a high-level framework Bill that, thanks to our colleagues in the other place, is now in much better shape. We particularly welcome the Government’s assurances that the SFGB will work closely with the FCA and the Treasury on issues of financial inclusion. Given, however, that the Work and Pensions Committee, of which I was a member at the time, raised concerns nearly three years ago about the inadequacy of Government measures to protect pension savers, and given also the difficulties that have arisen since, I am bound to ask why it has taken so long to recognise these failings.

I am also concerned that there are no specifics on delivery channels, especially given the very large number of people currently failing to access services. It is vital that the SFGB has the autonomy and resources to make itself truly visible to the public. Given the failings in other parts of the Secretary of State’s Department, and given the complex needs and limited resources of the people who will most need its services, “digital by default” is not a mantra we want to hear from the SFGB or its sponsoring Department.

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The transfer of the British Steel pension scheme into a new scheme was announced in early 2017 and was very public. When it all blew up and became fertile territory for unscrupulous pensions advisers, the FCA seemed surprised it was happening. Why did it not see that coming? What steps should the Bill take to improve the early-warning system so that regulators can see these things coming down the track and be far more proactive in getting out there? After all, prevention is better than cure.

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My hon. Friend makes a very valuable point that I will come to later. This is what we are seeing: we saw it with the BSPS and are now seeing it with Carillion and the pension savers there.

Last year’s statistics from the FCA make shocking reading. Of those over 55 planning to retire in the next two years, only 10% had used the Pensions Advisory Service, and only 7% had used Pension Wise. The new SFGB will have to do much better than that. Eight million people in the UK are over-indebted, according to a Money Advice Service report from last March, and less than one in five of these individuals currently seeks advice. Many are among the most vulnerable: over half the clients seen by MAS-funded debt advice projects have had a diagnosed mental health condition. It is vital that those people continue to be supported during the transition period, and that the SFGB develops strategies to identify and reach people who do not currently use any services. The impact assessment talks about “long-term…savings” once the SFGB has been established. It is difficult to see how such savings will be made if the new body is to fulfil all its objectives, particularly its objective of ensuring that information, guidance and advice are available to those who most need them. Have the Government considered what resources the SFGB will need to identify and support those who do not currently access advice or guidance? Has the Minister considered what arrangements will be put in place to ensure that people can continue to access existing services during the transition period?

The five areas on which the SFGB is expected to concentrate include provision of debt advice, and provision of information and guidance relating to occupational and personal pensions, accessing defined contribution pots and retirement planning. We welcome the Government’s decision, at the urging of our colleagues in the other place, to make it explicit in the Bill that the information, guidance and advice will be impartial, and that it will continue to be provided free to members of the public.

The SFGB will also help consumers to avoid financial fraud and scams; give information on wider money matters, and co-ordinate and influence efforts to improve financial capability; and co-ordinate non-governmental financial education programmes for children and young people. It also has a strategic function: to support and co-ordinate a national strategy. Given the appointment of a Minister with responsibility for financial inclusion, that needs to be strengthened to a “develop and deliver” function.

We welcome the focus on the provision of financial education for children and young people, but we think that the Government should be bolder, as recommended by the House of Lords Financial Exclusion Committee report “Tackling financial inclusion”. The new body will have to cope against a backdrop of rising prices and stagnant wage growth, a fall in real incomes and saving levels that have crashed. Evidence provided to the Lords Select Committee referred to fears expressed by debt agencies about the rise in queries concerning rent arrears, energy and water bills, telephone bills and council tax.

Then there is the impact of universal credit. As I have mentioned on numerous occasions inside and outside the House, we support UC’s aims of simplifying the benefit system, making transitions into work easier and, fundamentally, reducing child poverty. However, the Citizens Advice report “Universal Credit and Debt” showed that some aspects of UC risk causing or exacerbating personal debt problems. UC clients are more likely to have debt problems than those on legacy benefits. A quarter of the people that Citizens Advice helped with UC needed help with debt. UC clients are also struggling to pay off their debts. More than two in five debt clients on UC have no spare income to pay creditors.

Citizens Advice makes a number of recommendations, which are particularly pertinent in the context of the Bill. They include the need for more funding for free, impartial debt advice to meet existing increases in demand resulting from UC. In addition, Citizens Advice wants the Financial Conduct Authority actively to monitor the roll-out of UC. Has the Minister considered the impact of UC on personal debt, and its implications for the resourcing of the new SFGB? Taking up the Citizens Advice recommendations would alleviate some of the problems caused by UC. Fundamentally, as I have said, the Government must stop the roll-out of the programme and reverse the cuts to UC, which mean that it is failing to make work pay and failing the very people it is meant to help.

The SFGB will have to cope with an increasingly complex pensions sector. The growth of auto-enrolment brings more and more people within the scope of occupational pensions. The other major change has been the introduction of pension freedoms. In that context, we welcome the Government’s commitment in the other place to the delivery of the pensions dashboards. However, given the increasing issues that pension scheme members face—including those of British Steel, and now Carillion —in addition to a much tougher pension regulation framework, I want the Government to tackle the appalling abuse perpetrated by opportunistic financial scammers, who have targeted BSPS and Carillion pension members. I will say more on that later.

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Does my hon. Friend agree that it would be useful to have a connection between the new financial guidance body and the Financial Conduct Authority? I slightly regret the fact that we are moving away from Treasury involvement in this whole issue. My hon. Friend may know that some of the products that people are investing in with asset managers and insurers, having got their pensions freedoms, are known as PRIIPs—packaged retail and insurance-based investment products. New regulations came out this month, but there is a risk of these products opening a whole new mis-selling scandal, because they are creating all sorts of wild projections about the amounts that could be earned. Does my hon. Friend agree that the guidance body needs to keep on top of this with the FCA?

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My hon. Friend has made an absolutely key point. To go back to my urgent question, things are slipping through the net, and those links need to be tightened up. Again, this is something we need to explore in Committee.

As it stands, the SFGB will provide advice to the self-employed on their personal finances and debts only, and not on their business finances or debts. The Money Advice Trust, which helped more than 38,000 people last year, says that, for many self-employed people, there is simply no distinction between their personal and business finances. To exclude business finances and debts from the SFGB’s remit is a missed opportunity, particularly given the significant growth we have seen in self-employment in recent years. The self-employed as a group have also seen falling incomes since the recession. Will the Minister consider extending the SFGB’s remit to cover business finances and debts?

On the changes regarding claims management companies, we agree that the current arrangements regulating the industry are unsatisfactory. The current situation has been characterised by poor value for money, information imbalances, nuisance calls and texts, and the progression of speculative and fraudulent claims. We accept the proposition that there is a public interest in having an effective claims management market operating in the interest of consumers, as that can provide access to justice for those who are unwilling or unable to bring a claim for compensation.

Further, as the Carol Brady review asserts, a well-functioning CMC market can act as a check and balance on the conduct and the complaints-handling processes of individual businesses. We note that the Brady review considered that a move to the FCA would represent a step change. That seems the right decision, especially as 99% of turnover relates to financial services—PPI, packaged bank accounts or insurance.

Let me turn now to the content of the Bill. While we generally support the Bill, there are several aspects that we will look to strengthen, particularly in relation to clauses 4, 5, 25 and 28.

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I thank my hon. Friend for giving way again. I am fortunate enough to chair the Co-operative party, and one thing we are keen to encourage is the take-up of the services offered by financial co-operatives, such as credit unions. Would she be sympathetic to an amendment on Report from Co-op MPs urging the single financial guidance body actively to promote credit union services across the country?

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Again, my hon. Friend makes a very interesting point, and I would look to work with him on the details of that to understand exactly what he wants to achieve.

I also want to talk about the need for a duty of care on financial service providers and a breathing space for those trying to manage their debt problems.

On clause 4, we welcome the Government’s commitment to ban cold calling, which is the leading driver of pension scams. The scope of the clause is still too narrow, and the clause is not nearly urgent enough. Every day that passes without a ban, people are being avoidably conned out of their life savings.

However, there are also scams that work against businesses. In the last four years, the Association of British Travel Agents has recorded a 520% increase in gastric illness complaints. As a result, hoteliers in the markets affected are now threatening significant price increases, and some are even considering withdrawing the all-inclusive product from UK holidaymakers entirely. ABTA has recently released shocking statistics showing that one in five people have been contacted about making a compensation claim for holiday sickness, with cold calling being the most common method of approach.

On clause 5(2), within 24 hours of the collapse of Carillion last week, adverts started to appear online encouraging people to cash in their pension pots. That reflects the experience of BSPS members. The Minister will have noted the evidence to the Work and Pensions Committee, before which the extent of pensions scamming was revealed. That involved some advisers travelling hundreds of miles in the hope of capturing high fees for each pension pot they succeeded in transferring. The Select Committee described retirement savings sharks reportedly circling around the British Steel pension scheme members, providing a “honeypot for scammers”. One steelworker is reported to have missed out on £200,000 of his pension transfer value after being advised, and as I have said, we are already seeing a similar targeting of Carillion pension members.

The law does not currently prohibit firms from acting as introducers, provided that they do not stray into providing services for which they require FCA authorisation. That applies to any non-regulated firm. Last year, the FCA received 8,612 reports of potential unauthorised activity in the United Kingdom. If the firms and/or individuals reported are within the remit of the FCA, it can investigate and take action, which ranges from publishing unauthorised firms’ and individuals’ warnings and taking down websites, to taking civil court action to stop activity and freeze assets, insolvency proceedings, and, in the most serious cases, criminal prosecution. Last year, the number of enforcement cases taken was 69. Given the current climate, it is clear that enforcement action needs to increase, but most of the funds that the FCA collects from penalties on financial services firms go directly to the Treasury. What consideration has the Minister given to removing the exemption of introducers from the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and allowing the FCA to keep the financial penalties that it receives so that it can expand its enforcement work?

Free and impartial Pension Wise guidance is essential at times like this, and it is greatly valued by those who use it, but take-up is nowhere near high enough. Far too many people are currently making vital decisions in the dark, which puts them at greater risk of suffering irrevocable financial detriment through scams or choices that are contrary to their interests, such as transferring pensions to savings accounts. Those problems will only grow as people become more reliant on income from direct contribution pensions in retirement. The existing Pension Wise promotion regime of signposting by pension providers—who have no business interest in promoting the service—and advertising has proved insufficient.

We welcome the Government’s acceptance that people should be given more encouragement to take guidance, but we believe that there should be a stronger nudge. Although clause 5(2) is welcome, we think that it can be improved through exemptions to avoid unnecessary burdens and stronger core requirements to make taking guidance a true default option. While individuals could choose not to take free and impartial guidance before accessing their pension pots, that would no longer be the consequence of passivity: as with the highly successful automatic enrolment policy, people would have to actively opt out. Default guidance would promote shopping around, better-informed decision making and protection against scams. Combined with a ban on cold calling, it would represent a step forward in consumer protection in an era of pension freedoms. Will the Minister agree to introduce new provisions in Committee to impose an immediate ban on cold calling and to introduce default guidance to assist people accessing or seeking to transfer their pension assets, with strong penalties for advisers who wilfully and detrimentally scam pension members?

Clause 25 gives the FCA the power to impose a cap on the fees that claims management companies can charge for their services, and a duty to exercise that power in respect of financial services firms. The Government have also introduced an interim cap on the fees that CMCs can charge consumers in relation to payment protection insurance claims. However, that does not go far enough to protect consumers from paying disproportionately high fees for what is often very little work. The Ministry of Justice estimates that the average amount of commission charged to consumers by CMCs is 28%, plus VAT. The FCA estimates that the average payout for PPI mis-selling is around £1,700, which means that a CMC would, on average, charge a successful claimant £476 plus VAT. Although the proposed fee cap would reduce the amount that consumers must pay CMCs, it would still mean an average charge of £340 with VAT on top. If the Government want to take meaningful action to protect consumers from high fees, they should propose a solution that would allow them to keep 100% of PPI compensation.

The Government should require firms to pay CMC costs for PPI claims, capped at 20% plus VAT, when they are at fault and when the consumer has used a CMC rather than claimed directly. This measure would apply only for the interim period until the new FCA regulations came into force or until August 2019, the deadline for