Pension Schemes Bill [Lords]

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

Pensions are a fundamental part of everyone’s future. They offer security later in life and can provide much-needed investment to help to build the sustainable future we need. This Bill delivers on our manifesto commitments to legislate for a new style of pension scheme, establish pensions dashboards, and tackle those who try to plunder the pension pots of hard-working employees. It creates a new style of pension scheme that has the potential to increase future returns for millions of working people while being more sustainable for employees and employers alike. The Bill has consumer interests at its heart. It strengthens protections for savers by extending the Pensions Regulator’s sanctions regime—prison for pension pot pinchers will, I hope, deter reckless bosses from running schemes into the ground.

The Bill transforms the way people get information about their retirement savings, bringing pensions into the digital age by allowing people to see all their pension information in one place, at the touch of a button. Importantly, it will ensure that individual savers can be told exactly how their pensions will be affected by the increases in the global temperature and what their scheme contributes to carbon emissions. Through the Bill, the UK will be among the very first countries in the world to put climate change reporting for pension funds into law. That is a crucial step towards meeting the Government’s net zero ambition. It will ensure that pension funds play a leading role in the decarbonisation agenda.

My constituents in Norfolk are passionate about climate change. They want to have safe and sustainable investments for the future. Can the Secretary of State explain how they will be able to invest sustainably and safely, and how the Bill will help them with that?

My hon. Friend represents one of the constituencies with the highest number of pensioners in the country, but for his future pensioners this is an important Bill. It will bring transparency for the first time about what is happening with individual investments. This Government are not in favour of trying to force divestment of different elements of fossil fuels and the like—I am conscious that he has Bacton in his constituency. But the Bill is about making sure that the trustees—effectively, the way in which pension funds will be used—are clear about how they can contribute to ensuring that we tackle climate change, and how their investments can play a part in making that happen.

This unprecedented period that we have been experiencing has shown more than ever the need for financial resilience, but also the need to focus on future resilience. Helping workers to achieve greater financial resilience for themselves for the long term is a crucial part of our economic recovery. Improving the financial resilience of the public is a personal priority for me, and I am proud that the Bill is designed to help pension savers across the country. The Government have already taken action to ensure that there is support for pension contributions under automatic enrolment in the coronavirus job retention scheme. How important that policy is to us is demonstrated by the fact that we will be paying for pension contributions for kickstarters.

There are five parts to the Bill. Parts 1 and 2 set out the regulatory framework for new collective money purchase schemes, also known as collective defined contributions or CDCs. Interest in the CDC schemes is growing, as both members and employers look for options beyond the more traditional choices currently available to them to build long-term resilience. The schemes will provide employers with a new way of providing a pension where employers and employees can work together to deliver mutually beneficial outcomes.

The schemes will enable contributions to be pooled and invested, to give members a target benefit level. Investment risk is borne across the membership, rather than by individual members, delivering a good income in retirement without the cost of guarantees and without placing future liabilities on the employer. The Bill will ensure that the schemes are well run and we will require good member communications, so that members understand how their scheme works, including the risk-sharing features of CDC schemes, and understand that benefit levels may fluctuate.

I welcome the Bill, and part 4 in particular, including the bit that my right hon. Friend has just outlined about pension dashboards. It is such a minefield for our constituents to find all this information in one place, although people can do so very easily, for instance, via the HMRC dashboard in respect of tax. The Bill talks about compelling schemes to participate and to provide good-quality data in a timely manner. Could she just expand on that compulsion? What exactly does it mean in legal terms?

The Bill will require the pension schemes to provide all the data that they have available, so that it can be brought together to provide that information. I am conscious that this is further data, which may take a little time to come together, but this has been worked on for some time and we have made careful progress with the industry to get to this point. If my hon. Friend has any more detailed questions, my excellent Pensions Minister, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), will be able to pursue this either in later interventions or in Committee.

We welcome this part of the Bill in particular. We support informing savers about their savings landscape, but one concern we have is that the amendment in the Lords that allows for the public dashboard to be bedded in for a year before commercial dashboards come in could be removed in Committee. Can the Secretary of State confirm now that she has no intention of watering that down? If that were to happen, it would be met with vigorous opposition from the Opposition.

Our aim is to empower consumers through dashboards, and the Government believe that they are best served through multiple dashboards. Of course we have listened carefully to the concerns expressed in the other House as well as in this place. We are still on Second Reading, and I think it fair to say that we will be considering the contributions carefully and that any matters that may need to be looked into further can be considered in Committee.

I welcome the Bill, particularly the part that my right hon. Friend is referring to at present. Sometimes, when people have multiple pensions with various pension schemes, they wish to put them into one pot, or two or three pots, rather than having to deal with so many. When that happens, some pension schemes seek to charge administrative costs when passing the funds on. Is there any mechanism to ensure that those administrative costs can be kept to a reasonable level, rather than being extortionate, which would ultimately impact on the pension pot for the individual?

My hon. Friend is right to say that dashboards could encourage more people to consider consolidating their pension pots. There is guidance out there, and the Pensions Minister assures me that we are continuing to review the costs and charges that can happen in that regard. There is an element of administration cost that comes with such transfers, but I can assure my hon. Friend that we are on the side of the consumers who are saving to ensure that their money goes as far as possible for their future.

The Bill sets out the legislative framework for dashboards and makes provision to compel pension schemes to participate and provide good-quality data in a timely manner. The Pensions Regulator and the Financial Conduct Authority will be responsible for ensuring compliance by schemes. In the other place—this is perhaps covering a little of what has already been said—we introduced Government amendments to make it crystal clear that there will be a public dashboard, which will be overseen by the Money and Pensions Service. As I have said, we want to ensure that we increase people’s engagement with their pensions, so it is important that the dashboards are accessible to as many people as possible. Some 52 million UK adults have pensions savings, involving over 40,000 schemes. That is why I believe that having multiple dashboards is the best option, ensuring people can easily access information to manage their financial affairs for today and tomorrow.

Part 5 covers a range of policies. Clause 123 and schedule 10 introduce new provisions with regard to scheme funding. Most sponsors and trustees work well together and use the flexibilities of the current scheme funding regime reasonably, but good practice is not universal. The scheme funding provisions seek to help trustees of defined-benefit schemes to improve the way they manage scheme funding and investment. They will also enable the pensions regulator to take action more efficiently to safeguard members’ pensions and to mitigate risks to the Pension Protection Fund.

Climate risk is a key worry for many people in this country. The Government are resolute in how we want to help to tackle emissions to achieve our commitment to net zero by 2050. The Bill will make the pensions system greener and support the commitment to reach net zero by 2050. Clause 124 contains regulation-making powers to require scheme trustees and managers, for the purpose of managing climate-related risks, to take climate change goals, including the Government’s net-zero target and the Paris agreement temperature goal, into account. The clause enables regulations to be made mandating pension schemes to adopt and report against the recommendations of the taskforce on climate-related financial disclosures. This will ensure that occupational pension schemes take into account climate change and the response to it in the Government’s risk management and investment strategy, and report on how they have done so. Such measures will ensure that occupational pension schemes take climate change into account, and require that trustees disclose progress to their scheme members and the public.

Does the Minister agree that the responsibility for pension scheme trustees goes further than just reporting having a strategy? Once they have invested, they need to engage and to monitor their investments to ensure they actually comply with their obligations to try to drive through that performance change.

I understand exactly the point my hon. Friend makes. My understanding is that the Financial Conduct Authority is changing its guidance or approach to make sure that asset managers are also getting on board. We are trying to ensure that asset managers, as well as trustees, are aware, so we have that collaborative arrangement to make sure we can make progress on this important use of pension funds.

One big concern people have relates to scams. Clause 125 further protects savers from falling victim to unscrupulous scammers when considering transferring their pension pots. The measures allow us to place conditions on a scheme member’s right to transfer their pension savings to another pension scheme. This will protect members from pension scams by giving trustees of occupational pension schemes a level of confidence that transfers of pension savings are made to safe, not fraudulent, schemes. Regulations will prescribe the circumstances in which there is a high risk of a transfer to a fraudulent scheme, and could require scheme members to obtain information or guidance before transferring.

I welcome this measure in the Bill, reflecting changes in the other place. As the Secretary of State said, the intention is to require, in certain circumstances, savers to take advice before they move their pension savings into what might be a scam. I wonder whether she agrees with me that we should go further and allow trustees to prevent a transfer where it looks as though the savings are going into a scam.

I know that the right hon. Gentleman and his Select Committee are looking at this matter carefully, and I appreciate that he has been in discussions with my hon. Friend the Under-Secretary of State for Work and Pensions, who I believe wrote to the right hon. Gentleman yesterday. It is certainly an issue on which we want to continue to work to identify circumstances that could raise red flags, and legislate to enable trustees to act when they appear. The powers in the clause are broad enough to cover some of the scenarios about which the right hon. Gentleman is concerned.

I welcome the intervention from the Chair of the Select Committee, the right hon. Member for East Ham (Stephen Timms). During the passage of the Financial Guidance and Claims Act 2018, the SNP tabled a number of relevant amendments that might well have covered some of these problems, which are a hangover from pension freedoms. Would the Secretary of State and the Minister be willing to look at some of those amendments again in Committee to make sure that some of those issues, particularly in respect of advice and guidance, are tied up?

My hon. Friend the Under-Secretary of State for Work and Pensions has just told me he will share with the hon. Gentleman the letter that he sent to the Chair of the Select Committee. Generally, pensions legislation has broad support across the House, in recognition of the fact that these are long-term decisions, so of course the Government will look carefully at any amendments in Committee and any points made by the hon. Gentleman. We want to make sure that, going forward, we have confidence in the long-term objectives of the changes that the Bill will bring in.

In conclusion, I pay tribute to my hon. Friend the Under-Secretary of State, who is passionate about pensions, exceptionally assiduous and, in my humble opinion, the best Pensions Minister we have had in a very considerable period of time. I hope the House will agree that having safer, greener and better pension schemes is good for our constituents, as we encourage people to invest in themselves today to prepare for a comfortable retirement, and help to make them better informed about how their money is growing and being used for them and the planet. I commend the Bill to the House.

I am grateful to be called to speak in this Second Reading debate. Since I became the shadow Secretary of State earlier in the year, I have been carefully following the progress of the Bill in the other place, and I am pleased that it has finally reached this House.

First, I record my sincere admiration for and thanks to my colleagues in the other place—noticeably Baroness Sherlock, Baroness Drake and Baron MacKenzie—for their laudable work in carefully and thoughtfully amending the Bill.

In opening the debate for the Opposition, I shall outline our perspective on the Bill as it stands, as well as addressing the three areas—protecting people, protecting pension schemes and protecting the planet—in which Labour would like to see further amendments made as the Bill progresses. However, let me say clearly at the outset that my colleagues and I broadly welcome the Bill. We have been in dialogue with the Government for some time about its contents and the issues that it covers, and I am grateful to the Pensions Minister for his time this week on a number of matters. We will therefore not oppose the Bill today.

My message to the UK’s pensions industry is that it should have confidence in the strong commitment that exists across the House of Commons to a pension system that is sustainable, sufficient and able to meet the challenges of an ageing population. Although we broadly support the measures in the Bill, we believe there is more to be done to create the robust system that we want. As the Bill progresses, we will seek to make those arguments in the usual way.

A new piece of pensions legislation is always an important step. Personally, I am fascinated by pensions, but I appreciate that not all people feel the same way. For many people, retirement feels like a distant concept. The understandable financial pressures that many families experience—especially at the moment—make longer-term considerations harder to contemplate. Even in better times, talk of defined contributions or lifetime allowances can cause some eyes to mist over. I feel strongly, though, that we will not be able to address the major public policy questions we face without getting people of all ages to make a genuine connection between their future prosperity and happiness and the pension plans that they are making today.

First, I congratulate my right hon. Friend the Secretary of State and, in particular, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman), on their long-standing commitment to improving security for all our people in older age. My hon. Friend has shown over a lengthy period his commitment to securing older age for all in our country.

I would like to make four brief points, which I hope my hon. Friend will take into account as this excellent Bill continues its passage through both Houses. First, I would like to talk about the safety of pensions. There is no doubt that auto-enrolment has been a huge success for many, but Ministers will be aware that some people—particularly those on low pay—have been auto-enrolled into a pension scheme and found, when they tried to get information on their investment, that the company handling their pension is, in fact, a bogus firm.

I vividly recall a constituent coming to see me at my surgery. He was a delivery worker on fairly low pay. He was concerned about his auto-enrolled pension and wanted to know what was happening to his assets. He was trying to get an answer from the administrator for that firm and was simply told that the assets had decreased in value. When he tried to find out more, the firm would not engage with him. It was incredibly difficult for me, as someone who is quite familiar with the asset management sector, to get on to the ombudsman on his behalf. It was very difficult to get answers out of anyone. I urge my hon. Friend to ensure that we have the ability to clamp down hard on scams of all sorts, including scams perpetrated by those who provide auto-enrolment schemes, and to enable people who may not be at all familiar with managing assets and their own investments to seek redress where necessary.

My second point is about the structure of pensions. I completely agree that the dashboard concept is a great idea. There is no doubt that it will transform people’s ability to hang on to all their small pension pots from the various jobs they have had. Most people these days have several jobs during their career, not just one or two, and it can be a case of people looking in the back of a drawer and trying desperately to remember the name of the company where they worked for six months. That is why we end up in a situation where lots of people have lots of little pots that they never manage to lay their hands on. I ask my hon. Friend, as he considers the next steps for pensions, to consider properly the potential for creating a lifetime pot that follows the worker. Obviously, that would be a radically different approach from the pensions dashboard that enables people to keep track of all those pots, but, actually, when individuals try to consolidate a pension, quite often the transfer value of that pension is considerably less than the pay-out value if they hang on to it. That is often why one pension pot will try to hang on to a person as one of its members and stop them going somewhere else. In my view, it would be worth while to look at a pot that follows the individual that they then keep paying into wherever they work throughout their career.

40!

Exactly, Mr Speaker—at least. I was referring to people who are starting to have to think seriously about these issues.

My fourth and final point is about investing in decarbonisation. It was fantastic yesterday to hear the Prime Minister talking about our ambition to be world-leading in clean growth. That was, in fact, the No. 1 priority that I set out for the Department for Business, Energy and Industrial Strategy when the Prime Minister first took office last year. I know that my right hon. Friend the Secretary of State and my hon. Friend the Minister are determined to help our pensions system contribute to the excellent action on decarbonisation that the Government are already taking. I totally agree with them that this multibillion-pound sector can be a real force for good, and investing in the green economy can play a part in helping us to level up across the UK.

The right hon. Lady is making some powerful arguments, and I commend her for that. She will probably have picked up, as I did the other day, that Exxon Mobil has been surpassed in terms of the value of its business by a Florida-based renewables company. When we consider that that was the origin of the Rockefeller Foundation wealth, it just goes to show that had we invested in some of those organisations earlier and provided encouragement, through tax or other fiscal incentives, for pensions to get into that sector, we would have done extremely well.

The hon. Gentleman makes a good point. We should highlight the excellent work of some of the traditional high-carbon emitting companies of the past, which are really transforming themselves to become the renewables companies of the future. Some of the announcements made by BP, for example, have been incredibly welcome, especially those that show its determination to reduce its carbon footprint and to become one of the best and greenest companies of the future.

So I agree that by encouraging pension funds to invest in greener industries, we can help to improve our green economy and thereby level up across the UK and create hundreds of thousands of jobs. May I therefore ask my right hon. Friend the Secretary of State and my hon. Friend the Minister what conversations they have had with our right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy about the Government’s proposed reforms of corporate governance and audit? There is no doubt that audit reform could provide a much greater focus on what businesses are actually doing to improve their carbon footprint, and corporate governance changes could improve the incentives for company directors to prioritise carbon reduction and protecting the environment. With improved transparency and information about company performance, it will be considerably easier for pension fund managers to make investment decisions that will build security for us all in older age as well as protecting our planet, which is a top priority for so many people right across our economy.

Once again, I welcome this very important Bill, which I think is going to be quite transformative. I hope that my right hon. Friend and my hon. Friend will take my comments and suggestions in the light in which they are given, and try to improve and build on the excellent work that they have already done.

It is a pleasure to follow the right hon. Member for South Northamptonshire (Andrea Leadsom), who made some very interesting points which we would want to listen to, and which highlight why, on such an important issue, it is so important for Government to listen to Members across this House and work constructively on this very important piece of legislation.

The SNP broadly supports the Bill. There are key elements that we wish to see advanced, but also areas we hope to work on with other parties to help to improve. I am grateful to the Pensions Minister for his time over the past number of weeks, and in the previous Parliament, in keeping me up to date with the Bill. Similarly, I am pleased that the two main Opposition parties have been able to work together so constructively on these matters. I am grateful to the hon. Member for Birmingham, Erdington (Jack Dromey), in particular, for his approach, and look forward to maintaining that collaboration in Committee. I also echo the message to the pensions industry from the shadow Secretary of State. We engage regularly with the industry, as I am sure he does, on UK pension policy areas—and also, obviously, on looking towards pensions post Scottish independence. We are happy to see the Bill as it has arrived from the Lords advance into Committee, and we will not oppose its Second Reading, but I wish to lay down a few markers for the UK Government.

First, I want to set out our view on the key measures in the Bill. Parts 1 and 2 provide for the framework to operate and regulate collective defined-contribution schemes. There is great support for this from the Royal Mail and the Communication Workers Union. Like the shadow Secretary of State, I am keen to have an assurance that while CDC schemes are worthwhile projects worth pursuing, they should not be a replacement for good DB schemes. We also support part 3, which provides greater powers for the Pensions Regulator that we hope would be a deterrent to any future BHS-type moment.

We also support part 4, as it provides the legislative framework for the pensions dashboard—the digital platform that will enable people to see all their pension savings in one place so that they can make better decisions and informed decisions about their retirement plans. Part 5 pulls together a number of other provisions that we support—specifically clauses 123 and 124—and other areas such as climate change reporting. It is incumbent on all of us to do what we can to address the climate emergency, so we welcome these measures.

It is a pleasure to speak in the debate on this excellent Bill, and I think that I echo most of the remarks we have heard so far by saying that there is nothing in the Bill really to oppose. It leaves most of us looking for things we would like to add to the Bill, rather than being upset with anything that is already in it.

Much as the Opposition spokesman said, there are some key challenges for pensions, and I will address how the Bill tackles those challenges. The three challenges I generally look at are how we can increase people’s engagement with what their pension means, how much they need and what they are likely to have in their retirement; how we can increase the number of people who get a decent pension in retirement, rather than just some small amount of money; and how we can protect what people have actually saved. The Bill makes progress on all three, but the key thing is engagement. If we can get engagement right, people will understand how important the issue is, what it means and what some of the risks, consequences and benefits are. Through that, we can probably get people saving more, and we can help stop them being a victim of a scam or making a bad choice when they get to retirement.

It is tempting to think, because we have 10 million more people saving for pensions through the great success of auto-enrolment, that we have fixed the engagement problem, but the opposite is true. Auto-enrolment has not been such a success because people have engaged; they just have not chosen to opt out, and that was the whole basis for the inertia that was the reason for the adoption of auto-enrolment. We need to do more to engage people to make them understand exactly what all this means and what their retirement will look like if they carry on saving as they are.

The pensions dashboard is a key component. If we can get that right and people can go find out how much they have saved, find out what pension they would get from that, find out perhaps what ideally they would have saved by now and what their shortfall is, and then get some ideas for what action they should take over the rest of their working lives to close that, then we can genuinely improve the outcome people will have from their saving.

The challenge we have with the pensions dashboard is that we will get those improvements in behaviour and the outcomes we want only if people actually go on the dashboard on a regular basis and find the information they need. I would be more sceptical about how advantageous a stand-alone MaPS dashboard would be, because I have a horrible feeling that if we write to people and say, “Here’s your log-on and here’s your password,” some people might log on the first day and think, “This is great—it’s really useful,” but would they remember it existed next year, the year after, when they get to their mid-life MOT time and when they get to their retirement? For a whole load of people, that envelope would never get opened, or would go in a drawer and basically just be gathering virtual dust.

I hesitate to interrupt my hon. Friend’s flow, but there is an ongoing consultation on illiquids and consolidation. I endorse what he says about stewardship. He will no doubt be aware of the consultation that closes this week, which specifically encourages active stewardship regarding the management of large funds as he describes.

I am grateful to the Minister—perhaps he will submit my views to that consultation. This is about a behaviour change. It is not enough for us just to put rules in place; we need such behaviour to become the norm for large pension schemes that are investing huge amounts. That needs to be part of the behaviour; otherwise, we will have yet another report that gathers dust and that nobody really reads. Members and savers expect such measures. They want their money to be invested well—ethically, and in businesses that will improve the climate outcome. That would be good for pension schemes and their members, and companies need to take such measures seriously.

As has already been widely said, there is much to welcome in this Bill. Some important changes were made in the other place, and I pay tribute to the work that it did. I also appreciate the efforts that the Minister has made to work with my hon. Friends on the Front Bench, with me and the Work and Pensions Committee, and with others across the House to secure broad support for the measures in the Bill.

Pensions dashboards should be an important step forward in enabling savers to understand their pension position, allowing them more readily to make good decisions in planning for retirement. The Select Committee, under its former Chair, Frank Field, to whom I pay tribute, said in 2018:

“The case for a publicly-hosted pensions dashboard is clear cut”

because

“consumers want simple, impartial, and trustworthy information.”

In 2019, the Committee observed:

“A non-commercial pensions dashboard will be a welcome, if overdue, additional tool to provide transparency to individuals and help them plan how they use their pension funds.”

We have heard that it was agreed in the other place that the dashboard provided by the Money and Pensions Service should be up and running for a year, and the Secretary of State should report to Parliament on its operation, before other commercial dashboards are set up, and that commercial dashboards should not have facilities for engaging in financial transactions. Like others, I hope that those changes stay in place.

The former Committee reported in 2016 on defined-benefit pension schemes between reports that it published on the BHS and Carillion scandals, and its recommendations at that time are reflected in the new powers given to the Pensions Regulator in this Bill. The Committee recommended, for example, that the Government should consult on proposals to give trustees powers to demand timely information from sponsors, and I welcome the new offence created by the Bill of “knowingly or recklessly” providing false information to trustees.

I am grateful to the Chair of the Work and Pensions Committee, with whom I have had, I think, three separate meetings over the summer specifically to address this point. Clearly we are all keen to ensure that clause 125 and the powers within it address the issues that he rightly raises and that are of concern to fellow members of the Committee.

The right hon. Gentleman will be aware that I wrote to him yesterday and have given evidence in a more detailed document to the Work and Pensions Committee. With his permission, I will put both those documents in the Library of the House, so that all colleagues, including the hon. Member for Airdrie and Shotts (Neil Gray), have an opportunity to be aware of them. I am very happy to continue working with the right hon. Gentleman, and he will be well aware that the view of my Department is that the matters he raised can be addressed fundamentally by clause 125. The FCA has particular views on the red-flag list warning list point, but I am sure we can continue the dialogue.

I am extremely grateful to the Minister for those points and for the work that he has done, for the responsive way that he has looked at the issue over the past couple of months, and for the information that he has now provided. I will be very keen to hear from Pensions Scams Industry Group whether it feels that the proposal that the Minister has now tabled will meet the points that it has been raising. However, I am grateful for the progress that we have been making on this issue, and that will no doubt be further explored in Committee in the weeks ahead.

The determination by the pensions ombudsman in 2015 allowed trustees to decline a transfer request when there were concerns about a scam, but the Hughes v. Royal London court case in 2016 overturned that determination and established that the trustees do have an obligation to go ahead even when they know the receiving scheme is a scam. That must be changed, and I am very encouraged by the Minister’s point that he believes that it will be possible to bring forward regulations under the Bill as it stands to have that effect. It is important that that change is made.

Mr R complained to the pensions ombudsman about the decision of the London Pensions Fund Authority and Newham Council, which is my local authority, to allow him to transfer his pension to the Gresham pension scheme. That transfer went ahead and he has lost his entire pension, valued at £64,000. He has been awarded £1,000 in compensation since then. His view now is that the trustees should have refused to make that transfer but, under the 2016 Hughes v. Royal London decision, the trustees are legally obliged to go ahead with the transfer in a case of that kind. I think Mr R is right that the transfer that he requested should have been blocked by the trustees, and I very much hope that in future that will be possible. Very few people would today argue that the pension freedoms should be repealed, but pension savers are entitled to expect protection. The change that I have described is designed to provide it.

My final point has been touched on by the shadow Secretary of State. Clause 123 was amended in the other place. As the Minister knows, there is very strong support for the amended clause on the part of current defined-benefit schemes, such as the railways pension scheme and the BT scheme, that remain open. If that amendment were to be removed, those schemes fear that they would be treated unfairly by the regulator and in the same way as schemes in very different circumstances. Their future would be threatened as a result. It could be the final blow for private sector defined-benefit schemes. There is great nervousness about the Minister’s intentions on that clause, as he well knows, and about the fact that if he removes the amendment, he may make those schemes unsustainable. I wonder if, in closing the debate, he might comment on his intentions on clause 123.

It is a great pleasure to follow the Chair of the Work and Pensions Committee. This is an incredibly important debate because we know that our population is growing in age. By 2024, it is projected that 24% of our population will be over the age of 65, and in my constituency, 31% of our population is already over the age of 65. One of the key challenges that we face in this place is determining the best way to ensure that older people have safety, dignity and comfort in their retirement. They have paid their taxes, contributed to our economy and raised the next generation. But let us be clear: ultimately, the surest way of ensuring that people have safety and security in their retirement is through economic growth. No pension fund reform will be as effective if we do not have economic growth, because through economic growth, people earn more money and save more money. It is clear that our pension system simply has not progressed to meet the needs of a modern economy. That is why I warmly welcome the Bill for its clarity for pensioners and the protections that it brings.

I want to focus on the dashboard provision, which is one of the most interesting aspects of the Bill, and I have three points to make: first, on why I believe the dashboards are needed; secondly, on concerns from the industry about the commercial provision; and thirdly, on concerns about the cost to pension plans.

First, in terms of why the dashboards are required, pension provider LV= estimates that a typical worker in Britain changes job every five years. As the Secretary of State said, a British person today can have as many as 11 jobs throughout their career, going from job to job and collecting pension plans along the way. It is hard to keep track of those pension pots, and people forget or lose them. The Pensions Policy Institute has outlined that around 1.6 million pension pots, worth a staggering £19.4 billion, are lost today. That works out at around £13,000 per lost pension plan. By 2050, it is estimated that there may be as many as 50 million lost pension pots.

Let me address that point. The Government were clearly waiting for the industry to volunteer the provision of the data to create a pension dashboard, but upon that not being done on a voluntary basis, it was inevitably the conclusion of both industry and advisory bodies that we should proceed to compulsion. Hence, the Bill, following consultation, requires such data to be provided. I accept the international examples as totally correct, and that is why we are proceeding as we are.

I am grateful to the Minister for clarifying that and, again, I welcome the provision to compel pension providers. It allows the dashboards to be as effective as possible as quickly as possible.

Finally, let me address clause 124, requiring pension fund managers to include climate change risk. Again, I would expect pension fund managers already to be incorporating climate considerations in their investment process—climate change is clearly a risk for all pension pots. I am disappointed that we have to include it in the Bill, but I welcome it none the less and highlight how it emphasises, once again, this Government’s commitment to green finance.

It would be remiss of me, however, to stand up in this Chamber without mentioning my long-standing call to the Government to issue a Government green gilt, which would help to raise literally billions of pounds to fund some of the announcements that have been made this week. That would follow Germany, Netherlands, France and many countries around the world in tackling UK pension fund assets, some of which—many of which—have already been funding other countries’ bond issuances around the world. I would welcome any comments that the Minister has on that point.

In conclusion, this is an excellent Bill. I welcome the clarity that it brings to pensioners, as well as the powers for the regulator that will give a lot of comfort to many. It will clearly help bring our pension system into the modern world.

Pensions are often the biggest pot of money that anyone will have. They hold the promise of future financial security and are hugely important to millions, but they are also complex, and more needs to be done to help people to understanding this crucial topic. Increasing choice through pension freedoms has had a big downside, in particular for those moving out of defined-benefit pension schemes.

In 2017, the British Steel pension scheme was being reconfigured. Steelworkers were being circled by pension sharks to encourage pension transfers. One steelworker family from Blaenau Gwent were approached by a rogue financial adviser while they were away at their caravan on a family holiday, and he sweet-talked them into a bad deal. Such rogue advisers are often propped up by completely unregulated introducers, who are still not being properly investigated by the Financial Ombudsman.

Our Parliament’s Work and Pensions Committee, in its report on this long and sorry tale, concluded that steelworkers were “shamelessly bamboozled” and that the industry’s response has often been “too little, too late”. It is a scandal that continues to have a devastating impact on steelworker families in my constituency and on thousands more across the country. The case study shows a slowness to respond by regulators. Predatory behaviour is all too common, and more action is needed to tackle it. Rates of genuine criminal enforcement against rogue advisers are low, and advice to steelworkers remains confusing, so it is vital that the Bill brings forward the protections that should have been in place for steelworkers three years ago.

I welcome the Bill’s commitment to strengthening the powers of the Pensions Regulator when it comes to enforcement and penalties; that is overdue. However, I think the Bill still leaves consumers vulnerable to being ripped off through a new market that could be created by the dashboards that have been mentioned. If the Government reject Labour’s amendments in the other place, I urge them to provide some answers to the following key questions.

The measures in the Bill could transform how we view and engage with pensions, and I welcome the huge progress that that represents. Pensions are technical and complicated, and decisions about saving for our future, and about what to do with all our savings, are incredibly important. Naturally, the Pensions Schemes Bill is incredibly detailed and technical, but its overarching aim is clear: it is about protecting and empowering consumers.

Today I will talk about the tension that arises between giving savers the power to make the best choices, and protecting them from those who seek to scam or exploit them. Across quite a lot of what we do in politics, and in many of the decisions that we make as a nation, there is a tension between supporting free choice in decision making and ensuring that there is a safety net and some degree of protection.

Changes to workplace pensions and the introduction of pension freedoms have meant that individuals now take more decisions about, and responsibility for, their pensions. Free choice and autonomy are dependent on several things, however, including access to the correct information and the ability to understand it; freedom from coercion, either implicit or explicit; and not being duped by scammers. The Bill rightly focuses on those areas.

On access to information, the introduction of a pensions dashboard will lead to real improvements in accessibility and consumer confidence in planning for retirement. For too long, finding out about and understanding one’s pension and savings has been excessively complicated, and information has been inaccessible. The measures in the Bill to require pension funds to provide data represent a huge step in addressing the issue. To achieve the maximum benefit, however, we must work to ensure that full state pension data is included, as well as a means of tracking all small pension pots that an individual may have accrued.

As many hon. Members have said, gone are the days when people had a job for life. Most of us will do many jobs throughout our careers, and I suspect that those in the House are very mindful of that. That leads to people having many small pension pots, adding further complexity and confusion to planning for retirement. The ability to track pension pots and bring all that data together will give individuals the information and the power to make the best decisions for themselves.

Diolch, Mr Deputy Speaker, for calling me to contribute to this very important debate, which I think has revealed quite a refreshing amount of consensus on both sides of the House. It is a pleasure to follow the hon. Member for Runnymede and Weybridge (Dr Spencer). I agree with many of the points he made in relation to the measures in clause 125.

The Bill represents a welcome step towards ensuring the security and responsible use of UK pension schemes. I particularly welcome clause 124, which addresses the vital issue of climate change: the risk it represents to our long-term socioeconomic security, and the role that pension funds can play as key levers in the decarbonisation effort of our economy. Wales has a proud record on sustainability and climate change mitigation. A commitment to sustainable development is written into our de facto constitution and we were a world leader with our Well-Being of Future Generations (Wales) Act 2015. I know the Minister is aware of the groundbreaking work undertaken at the Centre for Alternative Technology, which is located in the constituency of the hon. Member for Montgomeryshire (Craig Williams). There is also groundbreaking work undertaken on my side of the Dyfi estuary. In particular, Aberystwyth University boasts the world-leading Centre for Glaciology, while IBERS—the Institute of Biological, Environmental and Rural Sciences—and Aberinnovation campus conduct crucial work on climate change mitigation.

I am grateful to the hon. Gentleman for putting on the record my knowledge of mid-Wales and support for so much of what is taking place there. I would be delighted to join him and visit the two institutions in his constituency and in that of his neighbour, my hon. Friend the Member for Montgomeryshire (Craig Williams), when we are allowed to make visits in future.

That is a very kind offer from the Minister, and I will take him up on it.

Achieving net zero emissions will undoubtedly be a difficult and expensive challenge, yet, as the past few months have shown, the state, with its unrivalled ability to borrow and invest, can effect unprecedented change to our society and economy quite rapidly when there is a desire or need to do so. With around £3 trillion invested in UK pension schemes, pensions represent an equally transformative source of investment, and could support our decarbonisation efforts.

I welcome the requirements in the Bill for pension schemes to assess their exposure to climate change risk. Those requirements are necessary and well overdue. The Economist Intelligence Unit’s estimate that climate change could eliminate up to 30% of the world’s total manageable assets, along with the fact that the vast majority of UK pension schemes currently do not take climate change risk into account, offer sufficient justification for the introduction of the requirements.

Closer to home, in 2019 Welsh local authority pension funds still had more than £1 billion invested in fossil fuels. That means not only that the pension holders are exposed to future climate change risk, but that the funds are—indirectly at least—undermining collective efforts to decarbonise the economy. I therefore urge the UK Government to consider how they can better work with the Welsh Government to encourage the use of pension wealth to realise decarbonisation and productivity improvements across the four nations of the United Kingdom.

The opportunities are there. In recent years, vital projects such as the Swansea Bay tidal lagoon have gone unrealised, while the UK Government have proven themselves unwilling to finance key aspects of our carbon transition in Wales, including improvements to the Welsh railways. Simply put, we have an opportunity to make pensions work better for Wales, to achieve our climate targets and to meet our international commitments.

I welcome the Bill’s increased powers for the pension regulator and the greater urgency for funds to consider climate change risk, but the Bill could go one step further. The finance sector has already taken welcome steps not only towards divestment, but in advancing the environmental, social, and corporate governance agenda. The UK Government could bolster those efforts by amending the Bill so that all default funds are required to reach net zero by 2050, at the latest. That would stimulate green investment, as well as industry development, including better reporting standards and stewardship, as mentioned by the hon. Member for Amber Valley (Nigel Mills) earlier.

It is a pleasure to follow the hon. Member for Ceredigion (Ben Lake) and to hear about all the fantastic work that my former university is doing in the green sector.

This is an important debate. We are talking about something that is often overlooked and under-discussed: the bedrock of people’s futures. The hon. Member for Blaenau Gwent (Nick Smith) summed it up well when he said that this is not about financiers in the City of London; it is about people in their kitchens. It is about people in Tredegar or Tipton—their futures and their livelihoods. It is about making sure that they have a sustainable future for their retirement, and the Bill is vital to ensuring that that can continue.

For people of my generation, in their 20s, pensions are not something we really think about, to be honest. As my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) summed up well, quite often the issue is information. As the data shows, many people now have numerous jobs. As my hon. Friend the Member for Grantham and Stamford (Gareth Davies) pointed out, some people have up to 11 jobs in their lifetime. It is about the slip in the drawer—the final notice that people get when they leave but then forget about it, and it goes to the back of their mind.

My first point, then, is about my support for pensions dashboards. It is vital that we can ensure that people make informed decisions about their futures. I support the pensions dashboard provisions in the Bill, because it is absolutely right that we ensure that, as people come to make decisions about their livelihoods and their future and how they are going to ensure it is sustainable, they have the information available. It has been interesting to hear, as a member of the Work and Pensions Committee, how that work has progressed. There is still more to do in this space, though, and that is recognised across the board. Nevertheless, I think we can all agree that it is vital that savers have the freedom to make choices in an informed way.

This is the first time that I have seen the Pensions Minister since his sad loss. I just want to say that it is very good to see him back in the Chamber.

I start with clause 123. Like others, I think that schemes that remain open to new members should be treated differently from those that are closed. It is important that this is reflected in the legislation and in the Pensions Regulator’s codes of practice. Schemes that are open to new members have different needs and I hope the Minister will consider supporting the amendment that was tabled in the other place.

If these defined-benefit schemes are treated in the same way as closed schemes, they will simply become unaffordable. They do not have the same de-risk needs that the regulator is seeking to tackle for closed schemes. In fact, the White Paper itself acknowledged this, as it acknowledged that they would have reasonably longer-term objectives. One very good example—in fact, an almost perfect example—is the railway pension scheme, which is a shared cost arrangement, with a 60:40 split between employer and member. Huge hikes in contributions would simply make this scheme unaffordable for both employers and members and it is worth remembering that, however much we think that defined benefit schemes may be on the way out, they still account for over 20% of the UK pension sector, so it is important that we try to look after them.

There is another unintended consequence. There is a danger that, if we go down this route, we could end up with the Pensions Regulator virtually setting pension policy, rather than simply regulating it, because it would be the regulator’s actions that would determine how pension policy unfolds in the year ahead. I am not against the regulator, but everyone here will know that it is a body that has in the past come in for criticism. There is a danger here that, if it were to adopt too cautious an approach, partly through a desire to protect its own interests, it might well end up acting against the interests of people who are investing in pension schemes. I do not think that the regulator is seeking to do that or that the Government are seeking to do that: it may be an unintended consequence of giving this power to the regulator to treat these schemes as if they are the same thing. It will end up directly influencing policy in relation to defined-benefit schemes in a way that I do not think anybody here really wants. My point is simple: we should do everything that we can to ensure that one of the consequences of the Bill is not to dismantle and effectively force the closure of perfectly viable existing open defined-benefit schemes. I hope the Minister will reflect on that.

The hon. Gentleman is making some very good points that I would like to add to, as someone who has dealt with many of our country’s pension funds. There is a disconnect between what the pensioners and the trustees believe: they would like to see much more investment in climate change initiatives and funds, but most of our pension funds are advised by a handful of consultants who are often a blockage to investment in, for example, ESG—environmental, social and governance—funds. Does he have any thoughts as to how we unblock the consultants aspect of this?

That is a good point. I think surveys have been undertaken that show that younger people from the 25-plus age group—there is an age divide in this—are much more concerned about where their pension investments go. As with most other things, if you are putting the money in, you should have a voice in where it is directed. That seems perfectly reasonable.

Let me try to clarify the legitimate point raised by the hon. Gentleman and also the flipside in terms of the argument by my hon. Friend the Member for Grantham and Stamford (Gareth Davies). The Department for Work and Pensions has driven pension trustees forward to embrace ESG and the path of net zero, and asset managers have been lagging behind. I want to put on record the good work done by the FCA, which I accept has been criticised legitimately in the past. Only last week, Chris Woolard and his team specifically issued guidance that accelerates the asset managers to put them on a parallel path to the pension trustees so that we basically ensure that the original investor, and then the actual manager of the money, are singing from the same hymn sheet.

I am grateful to the Minister and acknowledge the points that he has made. I just think that there may be permission to go a bit further in this regard, and that is the point that I want to emphasise.

I support directed advice, particularly where there is any question of a scam. I welcome a power for trustees to intervene. I am happy to support the proposal from my right hon. Friend the Member for East Ham (Stephen Timms). In my view, it might be better to give the Money and Pensions Service a role in offering limited advice rather than just the guidance so that we try to bridge the gap between guidance and advice. The fundamental difficulty seems to be that, unless people have a particularly big pot and can afford advice, they are denied it, and guidance is not sufficient to protect them or steer them in the right direction. There is an argument for something to bridge that gap, and it might be worth looking at a role for the Money and Pensions Service in doing that.

Finally, I want to go back to where I started and share my concerns that the Bill might be giving too much power to the Pensions Regulator. I was not entirely convinced by the Secretary of State’s comments at the outset. There is a legitimate fear that clause 107 has the potential to criminalise a much wider group of people than can possibly be necessary or sensible. I ask the Minister to look at that again and see if we can be absolutely certain that the net has not been cast too wide.

I welcome the Bill, which is a milestone in the country’s journey to a safer, better and greener financial future, in which more people are saving for their old age. I echo the warm words spoken by the Secretary of State about the work of the Pensions Minister, who has a true passion for improving the future not only of his constituents in Hexham but of all our constituents.

This has been an incredibly well-informed debate and I hesitate to add anything, but I do want to bring in my perspective, as someone who used to work on the dark side as a pension fund manager, and to make the obvious point that there are three main things that ensure that people have a good pension in old age. The first is starting as young as possible. I was interested to hear Members arguing about starting as early as 18. I certainly think that the Government should seriously consider such a provision, if people meet the earnings criterion. The second thing that makes people’s pensions better over the long term is tax breaks and employer contributions. The earlier people can pay in the maximum before tax that they are allowed to and get the employer matching that amount, the better off they are going to be in retirement.

The third thing that makes people better off through their pension is lower charges. This subject has not yet come up during this debate, but it is incredibly important to put on the record. The charges in this incredibly competitive industry, in which the UK leads the world, can vary dramatically. I hope that the powers in the Bill will enable our constituents to see much more clearly on their pensions dashboard what they are being charged and for what. As someone who used to work in the industry on the receiving end of the charges, I know there is no doubt that the compounding effect can have a meaningful impact on the final outcome of people’s pensions.

Will the Minister comment in his closing statement on the charges that the National Employment Savings Trust levies on our constituents? NEST is the body that was set up because, through auto-enrolment, there will be some very small and uneconomic pots that the industry will not want to take on. I recall from my time on the Select Committee on Work and Pensions that NEST itself charges really quite vicious amounts to people who are putting their money into a NEST scheme. I seem to recall that it was something like 1.8% up front and then an ongoing annual charge of 0.3%, which sounds low, but is not actually that competitive these days. Despite that, I understand that NEST has not been able to make enough money to repay the loan that the taxpayer gave to establish it. I would be interested in an update and in the Minister’s thoughts on how we can ensure that people who are using NEST do not end up paying particularly onerous charges.

I am grateful to my hon. Friend for what she is saying, but as for what Mr Mark Carney has said, she will be aware that he is a member of the Task Force on Climate-related Financial Disclosures. Under the Bill, the UK will be the first G7 country to bring such disclosures into statute. The advantage of that is that the very aspect that she has highlighted as a problem—FTSE 100 companies are not aware of what the risk is from climate change to the way in which they do business—will be tackled, as they will now be forced to disclose that on an ongoing basis to the wider market and individual consumers with pension investments. I believe that the issue raised by Carney, the Treasury Committee and others is addressed in the Bill and the consultation that accompanies it.

I welcome what the Minister says, and I did not want in any way to undermine the provision in the Bill and the incredible progress that it represents on our journey to a greener financial future. I welcome those steps wholeheartedly, but I wish to highlight that those risks, although disclosed, will be there. Many of our constituents, every month in their payroll, put investments into index-based funds in which those risks are inherent. It is incumbent on us all to recognise that that could be a big driver of UK returns, given that a significant portion of the index consists of carbon-based industries in the UK.

I make that point, and I make the point about charges, because the pensions dashboard will play a vital role in showing people what they are paying for those returns in an environment where interest rates are virtually zero, where the index has quite a lot of climate-affected assets, where charges can be as high as those from NEST, the state-backed provider, and where investment returns could be lower for a protracted period as we recover from the pandemic. It is worth flagging the fact that giving information on charges in particular and the way in which they are compounded over a lifetime will be a powerful part of the very many welcome changes that we can see in this excellent piece of legislation.

As my hon. Friend the Member for Airdrie and Shotts (Neil Gray) set out earlier, there is a great deal in the Bill that the SNP can welcome, including pensions dashboards, allowing trustees to take cognisance of the environmental impacts of the investments under their control, legislation to help avoid the unsuitable transfer of funds, and allowing the Pension Protection Fund to continue. Those are all good and welcome improvements to the regulatory and administrative landscape in which pensions operate.

When it comes to dealing with pensions—as Members have said, that is the most significant investment that many of us make—it is crucial that we are aware of unintended consequences. As a cautionary tale, I remind Members of what happened when the ability of funds to benefit from advance corporation tax was removed. While Treasury coffers have swelled as a consequence, that sounded the death knell for many excellent final salary pension schemes. Those on the Treasury Bench may not care terribly much for that comparison, but it is the sort of cautionary tale with which we would wish to approach this to make sure we are doing our level best to avoid similar mistakes arising from past legislation and the present legislation, and it is on that note that I wish to focus my remarks.

The first issue I wish to concentrate on is one addressed by the hon. Member for Birmingham, Selly Oak (Steve McCabe) in relation to clause 123 and funding requirements for defined-benefit schemes. It is obvious why we would all wish to be assured that schemes are funded to meet the liabilities they have, but if we are to insist on being able to demonstrate that too rigidly, there is a very grave risk that the resulting investment policy that needs to be enacted will become so conservative that it focuses on meeting current liabilities at the expense of delivering future benefits for members within the scheme.

Obviously, that could mean a change in investment strategy away from equities to secure but potentially lower yielding investments, such as bonds, fixed interest investments, property infrastructure and the like, rather than balancing that mix with other types of investment, which might be expected to deliver higher returns over the longer term, and that danger is very real. Paragraph 210 of the consultation the Pensions Regulator is undertaking says:

It is a pleasure to follow the hon. Member for Gordon (Richard Thomson), who made a lot of important points. It is also a pleasure and a novelty for me to speak without a time limit, but I will try not to test the House’s patience too much.

This is a very important Bill that delivers on our manifesto commitments and has consumer welfare at its heart, and I am glad that it largely enjoys cross-party support. I welcome the speeches from around the Chamber. I particularly welcome the fact that colleagues from the 2019 intake are speaking in the debate, and I see that there are another three of them yet to speak. Either we are not as young as we look, or we have taken the advice to heart that it is never too early to start planning for retirement.

As a member of the all-party parliamentary group on pension scams and someone who has a general interest in these matters, I am pleased to speak in favour of the important work that the Government have been undertaking. This important legislation will benefit members of the public and help people to plan for their future. It will have an important impact on people saving into pensions for their retirement, and will ensure that reckless bosses cannot gamble with people’s savings. It will transform the way that people get information about their retirement savings, and it will empower the Pensions Regulator by making it tougher and making its guidance clearer.

We have come a long way on pensions in the last decade, and particularly on automatic enrolment, which most colleagues welcome, but in some ways, we are still in the 20th century. Some pension schemes still provide once-a-year statements. That might well reflect the view that pensions are a long-term investment, and we do not want people to panic as their value goes up and down week by week, but when those statements are frequently being sent to old addresses, it is a problem. People have an average of 11 jobs throughout their career, and with automatic enrolment, they are now likely to have nearly as many pension pots. We really need to bring this into the digital age. At present, these information failures make it harder for individuals to get a holistic view of the pensions they are building up, even if they have the help of a financial adviser. Control over our pension provision, which is often our largest financial asset, is hugely important, and the pensions dashboards will be a huge step forward for consumers.

I hear what the hon. Gentleman says, and I do not disagree. I understand that commercial dashboards are coming; that is not where the dispute is. What I and others across the House are looking for is for the Government to invest in and have a period to allow the Money and Pensions Service dashboard to bed in as the default position for consumers to go to, where they know they can get trusted impartial information about their pensions, and then to allow the commercial dashboards to go from there. That is the very reasonable position that the Lords took, and I think that we should agree to it in Committee. I ask the hon. Member to reflect on that.

I thank the hon. Gentleman for that intervention, and I ask the Minister to comment on that in his summing up, but I reiterate that we have to go where the consumer is. I understand the point the hon. Gentleman is making. We need clear supervision and a robust regulatory framework, as provided for in the Bill, and we need a non-commercial service, but we have to be realistic: people are going to go to these services first, and they are already springing up. We cannot be constantly trying to catch up. In this regard, I note the earlier intervention from my hon. Friend the Member for North West Cambridgeshire (Mr Vara), who is not in his place at the moment. These dashboards will encourage consolidation, and that may or may not be a good thing in specific cases, so we must continue to ensure that consumers have access to appropriate advice and that any administration fees are reasonable when consolidation takes place.

In recent years, there has been a significant increase in the number of members of the public being scammed out of their pensions. The FCA and the Pensions Regulator report that in 2018, 180 people reported to Action Fraud that they had been victims, losing on average £82,000 each. A total of nearly £31 million has been reportedly lost to pension scammers since 2017, according to complaints filed with Action Fraud. I therefore welcome the measures in clause 125.

Let me personalise the scams issue for a moment. A couple of my Newcastle-under-Lyme constituents contacted me about their experience earlier this year. They have had to make very unwelcome changes to their retirement plans as a result. They, together with thousands of others, were convinced by commission-driven sales people to move their money into a scheme called Dolphin Trust, which is now called the German Property Group. The Minister might be aware of the scheme. It was set up to buy derelict listed German buildings in prime locations and redevelop them. In many cases, pension holders who invested were told, by unregulated salesmen who were paid up to 20% commission, that they would almost double their money if they left their savings in the scheme for five years. The scheme was often recommended by independent financial advisers, who advised their clients to invest via a self-invested personal pension.

As a financial planner for many years, I can confirm that for a large majority of the UK population the topic of pensions is something to be avoided and put off to a later date. Looking at the sparseness of today’s call sheet and at the Benches around me, I think that may be the case for many right hon. and hon. Members. Many UK pensions involve complicated borrowing and are hard to understand, and we cannot all be pension geeks like me and the hon. Member for Stalybridge and Hyde (Jonathan Reynolds).

In April 2006 we went through pension simplification—a misnomer if ever there was one. That was about the time that I was becoming involved in pensions, and if what came out of pension simplification is simple, I would have hated to work with what came before. This does not need to be complicated. Pensions are the simplest of things—they are an investment with a tax-efficient wrapper around them. People save for their retirement, with tax benefits as an incentive to do so. It is no more complicated than that.

Other industries have adapted and evolved to suit new technologies as they come up. The banking industry is a great example of that, and it has embraced new technological advances such as online banking. More than 76% of people in the UK now use online banking regularly, compared with just a third of people back in 2007. Just as the banking industry developed to meet the needs of modern society, it is now time for the pension sector to do the same and move into the 21st century, and the Bill seems to be the first step in doing just that.

A recent YouGov survey found that three in five workers have no idea how much they have saved in their pension, and more than a quarter of working-age people with a pension say that they never check what is in it. Given the United Kingdom’s increasingly ageing population, it is more important than ever that individuals plan for the future and protect their savings, but currently, there are barriers to doing that.

As I have said in other debates in the House, my main reason for being involved with the Conservative and Unionist party is one of empowerment, and of enabling people to take control of their lives, make better decisions, and shape their own futures. Once again, I am proud to be a member of the party that empowers people to have the freedom and knowledge to make informed choices about their lives, and form the retirement that they want and deserve.

It is an honour to follow the self-confessed pension geek and guru that is my hon. Friend the Member for Delyn (Rob Roberts). I hope that when I come to draw my pension, it is revealed, as in the story of his constituent, that it is actually five times greater than I ever expected it to be. I am sure it was all down to the wonderful advice that was given.

Past performance is no indication of future guaranteed performance. The small print says so quite clearly.

If I wrote a headline for this Bill, it would be something along the lines of, “If you want to save the planet, start a pension.” That would chime very well with my hon. Friend the Member for West Worcestershire (Harriett Baldwin), who is encouraging young people to start a pension, as I am myself, but in a roundabout way, this Bill does just that. While the thought of pensions may give rise to a tendency for many to glaze over and think about things another day, this piece of legislation is a welcome move. That is proven by the wide base of support. As the Minister has been roundly thanked, I will applaud him and add my thanks, because this is a really great piece of legislation.

While I cannot profess to having the same level of knowledge as some Members in the Chamber today, I was in a former life a finance director, and I recall feeling some dread when auto-enrolment first arrived. I remember bemoaning the scheme, which at the time was more expensive to administer than the meaningful contributions that an employee would pay in when the rates were so low. How wrong those cynics were, including me, because its success speaks for itself. We now have more than 10 million workers in an auto-enrolment scheme in this country. People did not opt out when the contributions increased. Nearly 90% of eligible employees participate in a workplace pension now.

With an ageing population, the need to save for one’s retirement is in anyone’s view vitally necessary, much like many of the constituent parts of the Bill. Auto-enrolment has created inertia to save. It trusts people to think about their retirement, but the next stage is to bring back control—this is why the Bill is so good and important—so that people know what they have and where it is. As the old saying goes, “If you cannot measure it, you cannot manage it”, and for that reason I wholeheartedly welcome the implementation of the pensions dashboard in the Bill.

It is a common fact—we have heard it many times today—that people lose control of their pension pots. People move jobs many times throughout their career. We have heard it is about 11 times on average, and there is some £20 billion in pension pots that people no longer necessarily know the location of. The dashboard is a progressive and necessary step in continually improving our pension system and empowering people to know what they have and where it is, not to mention beneficial for pension companies and contributors given that we are always told how small pots are not the most beneficial or economically efficient. What is more, the Bill gives clarity, transparency and support to help make people make informed decisions.

I will not be speaking for as long as I did yesterday in the Adjournment debate. I will just say a few words about the Minister, who is a great neighbour. He is the sort of neighbour that an MP would want to have next door, and he is always incredibly helpful and friendly. I echo the words of some of my hon. Friends about the tragedy that he and his wife, who are both personal friends of mine, have suffered. I wish them all the very best for the future. I add my name to the tributes that the Secretary of State paid to him in his role as Pensions Minister. He has been superb in government for many years. Whether he will continue in that role or be elevated—I hope he will be—who knows? He has certainly been great in his job.

I pay tribute to some of my hon. Friends from the 2019 intake who have made contributions. My hon. Friends the Members for Grantham and Stamford (Gareth Davies), for Newcastle-under-Lyme (Aaron Bell) and for Delyn (Rob Roberts) have a huge amount of personal experience in this area, and it is great to see that expertise being brought to the Floor of the House.

For many people, the two major contributions that Parliament and the Conservative Government have made to their lives will probably be the long-term positives of the last 10 years of auto-enrolment and the raising of the threshold at which people start to pay income tax. Those are probably the two largest financial measures of which they will feel the effects over a long period of their lives. The Bill builds on a lot of that great work.

The CDC scheme in part 1 is a welcome measure. I am glad that it has union support, and I know that Royal Mail workers in my constituency are looking forward to benefiting from it. On strengthening the powers of the regulator, from my conversations during the last few months with Members on both sides of the House about pensions issues that have affected their constituents over many years, it is clear that any such strengthening will be welcomed. I am glad to see that in part 3. On part 5, we can all welcome the extra choice and empowerment delivered to our constituents by the introduction of the green initiatives that other hon. Members have mentioned. I know that part 4 and the dashboard have been the subject of much debate today. I have had 11 jobs in the past five years, never mind a lifetime, so I very much welcome the proposal. However, I hope that the voters of Durham North West will change the habit of a lifetime and keep me in place for many years to come.

First, I express my thanks to Members of the other place for introducing the Bill and for their work in bringing it to its current form. Clearly, much expertise and scrutiny have been brought to bear.

Secondly, I want to acknowledge that life expectancy is increasing and that that is good news. It also brings challenges and that is a good problem to have. Older people may now need a pension income that will last for 20, 30 or even 40 years and we should welcome that. As I said in the debate last week on the Social Security (Up-rating of Benefits) Bill, the triple-lock guarantee for pensions has never been more important. It is clear that many working-age people, and especially younger people, are not saving, and are simply unable to save enough, for their retirement. Final salary pension schemes, such as defined-benefit schemes, are increasingly closing to new entrants. This will mean that the state pension will become an increasingly important source of retirement income in the future. That makes this Bill and its consideration of how best to manage workplace pension schemes even more vital. As a result of the work in the other place, there is much to welcome.

I have had a number of jobs over my time in employment. I cannot beat 11 in five years but, at the last count, I am currently a member of four different pension schemes—both private and public sector and both defined-benefit and defined-contribution schemes. It is clear that, as work changes and more people move from employer to employer, such circumstances are more likely, and I welcome the Bill’s acknowledgment of this increasing reality for many.

I will restrict my remarks to a small number of areas. Other Members have outlined the details of parts 1 and 2 and the proposal to introduce collective defined-contribution schemes and collective money purchase schemes to allow savers to take advantage of market highs and avoid the lows. It makes sense to offer a more balanced alternative to having all the risk lying with either the sponsoring employer, as in defined-benefit schemes, or with the employee, as in defined-contribution schemes. The cross-party employer and employee support outlined in the Government’s consultation reflects that and, having outlined the importance of ensuring inter-generational fairness last week, I highlight the Lords amendment to clause 27, which would provide that, whenever the pensions regulator issued a notice requiring a scheme to submit a supervisory return, it must include a requirement that the trustees assess the extent to which the scheme is operating in a manner that is fair to all its members. I seek a response from the Minister on that amendment and on the steps that the Government are taking to ensure that such fairness is there from the outset of any CDC scheme.

Those who built Britain deserve nothing less than security and dignity in retirement. Pensions is not an easy policy area. It requires, on the one hand, careful long-term planning and management of the public finances and, on the other, the role that we play in this House in laying down the statutory framework for pensions. That is why, in government, Labour sought to establish consensus.

We introduced the Pensions Commission, which charted a new direction for United Kingdom pensions policy. Chaired by Adair Turner, it gained widespread agreement to reforms that, even at the time of the establishment of the commission, had been regarded as unthinkable. The lasting legacy of that was auto-enrolment, transforming the lives of millions, with 10 million more people now saving into a workplace pension.

I now turn to the Bill, with that spirit of constructive engagement in mind, and with a number of questions arising out of today’s debate. I begin by thanking the Pensions Minister for his outstanding work in carrying forward so much of the Bill. He is highly regarded across the House, as we heard from the right hon. Member for South Northamptonshire (Andrea Leadsom) and others.

In an unprecedented period, I am grateful to the Minister for the fact that, because of his persistence and engagement with us, because of the effective cross-party working there has been and because of the determination of those who have supported important measures in the Bill, it has finally made it to this stage. I add just one other point: it is greatly to the credit of the hon. Gentleman that, in the most difficult of circumstances, he has forged forward. I simply say that, on this side of the House, we stand in solidarity with him and his wife.

As my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) and the Secretary of State have said, the Bill, as first introduced in the House of Lords, focused on three key areas: first, CDC schemes; secondly, the role of the Pensions Regulator; and thirdly, the pensions dashboard. Part 5 also included provisions on DB scheme funding and transfer rights. Now the Bill contains one further key area, and the hon. Member for North Norfolk (Duncan Baker) was right when he said that it is the first time that such a measure has appeared in pensions legislation. From the outset, it was our strong view that the Bill offered an opportunity to make progress on the role of pension schemes in combating climate change. Originally, there was not a single reference to climate change or to environmental concerns in the Bill. Now, there is a set of provisions in clause 124, headed “Climate change risk”, which require those managing pension funds to take climate targets into account in their overall governance and to disclose climate change risks and opportunities.

This is an important Bill for millions of everyday people: those who have already retired and those who are saving for retirement. The Bill makes pensions safer, better and greener. I thank colleagues from across the House for their support of the Bill. I am nervous when there is consensus in praise of a Bill. It is a bit like when the chairman of a football club indicates that they have confidence in the manager, and we all know how that goes in the normal course of events.

First, I would like to address some of the issues that are not in the Bill. State pensions are not a part of the Bill. The scope of the Bill makes provision for occupational pension schemes only. The points on the state pension are duly noted, but they are not within the scope of the Bill. On automatic enrolment, it is entirely true that the automatic enrolment review sets out our ambition to remove, in the mid-2020s, the lower earnings limit and the lower age threshold. That will happen, but in due course. On superfunds, I welcome the support in broad terms—I accept it is in broad terms—from the shadow Secretary of State, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), and the SNP spokesman, the hon. Member for Airdrie and Shotts (Neil Gray). I accept that this is an ongoing process. There is an interim regime, which has been brought forward by the Pensions Regulator. It is something we hope to take forward, but I accept that the Government do need to address it in due course. On pensions taxation, many points have been raised. I am sure the Chancellor is listening avidly and will address the matter in due course.

The importance of the Bill has been shown by the many different and thoughtful contributions from hon. Members. The House welcomed the fact that certain Members have been willing to identify themselves as pension geeks, not least the shadow Secretary of State and my hon. Friend the Member for Delyn (Rob Roberts). I thank all colleagues from the 2019 intake who have contributed so brilliantly, including my hon. Friend the Member for Grantham and Stamford (Gareth Davies), who explicitly made the case for green gilts. I also thank my hon. Friend the Member for North West Durham (Mr Holden), who is my new neighbour. All I can say about him as a neighbour is that he is an awful lot better than the previous occupant of his seat, and I welcome him to it.

This Bill matters, and, as was put best by the hon. Member for Blaenau Gwent (Nick Smith), it matters most to the mums and dads in Tredegar. My hon. Friend the Member for West Bromwich West (Shaun Bailey) said that we need to look at the impact of this legislation, whether it is on the people of Tredegar or Tipton. I will be resolute in ensuring—to the best of our abilities within the confines of the Bill—that scams are stopped. It is crucial that we drive forward real change through clause 125 and the regulations that follow. As I said, I have written to the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Stephen Timms), and given detailed evidence to the Committee. I am quite sure that we can continue the dialogue to flesh out what that will mean in the regulatory process. I am keen that the Bill is utilised to the best of our ability and that it sets out a road map to ensure that people are not scammed through their pensions. We will stop those callous crooks and ensure that transfers are carried out appropriately.

It is great to hear the Minister speak up for the good people of Tredegar, my home town. I accept that dashboards and transparency should help in understanding schemes’ performance, fees and important matters that affect pensioners across the country, but, as the Secretary of State said in her introduction, we have 40 million-plus pensioners and there are 40,000 different schemes. Will the Minister please tell us more about how he is going to ensure that dashboards are sufficiently regulated so that there are no future problems with this initiative?

I will come to dashboards in more detail. I am happy to discuss this with the hon. Gentleman individually. The long and short of it is that we are keen that there is a detailed authorisation regime and that there are suitable restraints in place to ensure that the system is not open to abuse. This is different from the type of dashboard envisaged by some, which is a repository of all data. We are definitely not going down that route. With the data team, we are designing the dashboard to ensure that it is data accessed by the individual, not a pot that all parties can take data from. It is a detailed conversation and one that I would be delighted to take up with the hon. Gentleman, but I assure him that our objective is to ensure that there are no problems of the kind he raised.

Let me turn to green technology and climate change. I look forward to my visit to mid-Wales and to working with the Welsh Government. I agree with the point made that if one wants to change the world, investing in a pension is unquestionably the right way forward. I endorse the comments of my hon. Friends the Members for West Bromwich West and for Grantham and Stamford, and I am certain that the Treasury is listening to the idea of green gilts as an alternative vehicle for pension funds to invest in on an ongoing basis.

There is no doubt that, by including climate-related Financial discloures in the Bill, we are continuing a narrative: this Government are driving forward work against climate change more than any other Government in the world. We are the first Government in the G7 to legislate for net zero. We are leading the way on environmental, social and corporate governance throughout the European Union, as is acknowledged by all our partners in the EU. We are the first Government to legislate to bring CFDs into law in this country. Without a shadow of a doubt, this builds on the work that we have done, and on the promises and assurances made by my right hon. Friend the Prime Minister in his speech to the Conservative party conference yesterday.

I turn to CDCs, for which there is welcome support across the House. Royal Mail, and all the postmen and women who support all our constituencies up and down the country, are keen to see this measure. I have worked extensively with the Communication Workers Union, Royal Mail and the various organisations that have supported this policy. I do not want to be too Blairite in a spirit of cross-party unity, but there is no doubt that CDCs are the third way in pensions, and a way forward that provides an alternative to the current regime.

With the dashboards, we are trying to bring pensions into the 21st century. We are building on the work that has been done in other markets, whether energy, banking or savings, all of which have similar things with open banking, savings apps and the ability to change an energy provider. I can assure the hon. Member for Birmingham, Selly Oak that the state pension will be part of the dashboard. On the formulation of the dashboard and what it looks like, many people want to talk about the end product. I merely want to get the product up and running, but the end product will, quite clearly, have something about costs and charges, which addresses the point that the hon. Gentleman raised, as did my hon. Friend the Member for West Worcestershire (Harriett Baldwin). I can assure her that charges are under review on an ongoing basis. The dashboard will also, we hope, do much to provide simpler statements, simplifying something that has been very technical for very long time.

I thank the Minister for giving way. I want to say at the outset how pleased I am to see him in his place. He should rest assured that the thoughts of my family are very much with his. Likewise, I take a moment to ask the House to remember that my hon. Friend the Member for East Dunbartonshire (Amy Callaghan) would have been here, were it not for her health issues, as the SNP pensions spokesperson.

I think it is clear that Members on both sides of the House, even those on the Government Benches, are not far apart on the issue of the dashboard. Between now and the Committee stage, would the Minister be willing to discuss his intentions with me and with Labour Front Benchers and the Liberal Democrats to see what compromise could be sought in all our interests going forward? This is a really important issue for us. I know the Minister to be someone who seeks consensus where possible, and I hope he would like to do so again in this case.

I have already engaged in extensive discussions, but I would be delighted to continue to do so both in and out of Committee. I think it is very clear that the Secretary of State and I have gone to great efforts to try to take the House with us in that dialogue and debate, and I can assure the hon. Gentleman that that will continue.

Let me move on to address the powers of the Pensions Regulator. I think it is right for me to put on record that TPR has done a good job during Covid, and, as an organisation, it is definitely improving. I accept that there have been criticisms, but it has unquestionably progressed under the supervision of its current chairman. I agree with my hon. Friend the Member for Delyn that these regulatory powers provide a fresh set of dentures for TPR to ensure that its bite is a little more substantial than its previous bark. That is a fair point well made. This builds on work that has already been done.

Several colleagues have raised the issue of open DB pension schemes. The Government continue to engage with the schemes and the Pensions Regulator, and we want to understand the concerns. I met stakeholders last Friday, and I have discussed this with Opposition Members. The measures in the Bill are designed to deliver clearer funding standards while upholding the flexibility of the scheme funding regime. There is an ongoing consultation, issued by the regulator, which looks at a potential bespoke regime. I have already discussed with the individual schemes whether the consultation is the right way forward, but I am happy to continue that dialogue, as I am on other issues.

I thank many colleagues for their kind words and support for my wife and me following the death of our twin boys. It is genuinely appreciated. This House is a special place when we are presented with adversity. It brings us together, and I think it humanises us that, while we disagree politically, we share the same problems. I echo the comments made by the hon. Member for Airdrie and Shotts, and wish the hon. Member for East Dunbartonshire (Amy Callaghan) well.

We are pushing ahead with an innovative and ambitious pensions agenda that is reforming retirement. It delivers on commitments made in a manifesto backed by the people of this country in December 2019. It makes our constituents’ pensions safer, better and greener—safer by cracking down on scams and unscrupulous bosses, better by utilising new technology to develop and create a dashboard, and greener by ensuring that we get to net zero through ethical and sustainable pension investment. I look forward to further discussion, and I commend the Bill to the House.