22/03/2017 House of Commons

Order. Urgent question. To ask the Secretary of State for Transport if

he will make a statement on recent changes to aviation security.

Secretary of State for Transport, Secretary Chris Grayling. The safety

and security of the travelling public will always be paramount

concern and this government will not hesitate in putting in place any

measures we believe are necessary, effective and proportionate. That is

why yesterday we took the decision to step up some of our aviation

security measures in response to potential threats to aviation as set

out in a written ministerial statement yesterday afternoon.

These new measures will be applied to all inbound direct flights to the

United Kingdom from Turkey, Lebanon, Jordan, Egypt, Tunisia and Saudi

Arabia. We have explained this decision at all levels with our

partners in the region. We have also spoken to European partners such as

Germany and France with significant interest in aviation and other

partners elsewhere whose travellers and carriers may be affected. The

House will be aware the US government made a similar

announcement shortly before regarding the rights to the United

States and we have been in close contact with them to fully

understand their position. Whilst the United Kingdom has some of the

most robust security measures in the world, we can never be complacent.

That is why we continue to work in conjunction with our international

partners and the wider aviation industry, to keep security under

constant review. And to ensure that when you

measures are done so in a way that can keep the level of disruption it

may cause to passengers to a minimum. Passengers boarding flights

to the United Kingdom from the countries I've just listed will not

be allowed to take any phones, laptops and tablets larger than a

normal sized mobile phone. This is to assist both airlines and

passengers. A length of 16 centimetres, width of 9.3 and a

depth of 1.5 centimetres. Passengers are advised to take some simple

steps that check-in to prepare, by placing these personal electronic

devices into their hold luggage before going Central 's security.

Normal cabin luggage restrictions will apply. Passengers should check

on the line for further information. My department is working

round-the-clock with the industry to ensure that passengers get the

information they need, when and where they need it. While we would

do everything we can to minimise the disruption to people's journeys, we

do understand the frustration this may cause, but he will understand

that our top priority will always be to ensure that public safety is

maintained. Mr Speaker, these new measures are concerned with flights

into the United Kingdom. The UK is not advising against flying to and

from these countries. Those with Immonen travel should contact their

airline for further information. -- with Immonen travel.

UK airports have been informed and my officials have asked them to

consider stepping up their own contingency arrangement should they

be needed. I know the whole house will recognise the fact that we face

a constantly evolving threat from terrorism and must respond

accordingly to ensure the protection of the public against those who

would do us harm. The changes we are making to our security measures are

an important part of that process and I assure the House we will

continue to work closely with airlines, airports and the wider

travel industry in the coming weeks to ensure passengers know what is

expected of them. I ask for their patience as these new measures bed

in. Mr Speaker, I will continue to keep the House updated on

developments. This is a major change to our aviation security regulations

and carries with it serious potential for delay and confusion

for UK passengers. First they a minister explained why the UK and US

ban were announced within hours of one another, yet provide for

different countries, airlines and in effect different devices? The United

Arab Emirates, Kuwait and Morocco are countries all affected by the US

ban but not included in the UK's. No US operator is affected but six

British airlines are. Size restrictions on electric items

differ between the two. The Washington Post reports that US

officials have been discussing new restrictions for over a fortnight.

When exactly did ministers first learn of these potential changes?

Does he agree that to avoid passenger confusion and delay on

effort should be made to harmonise these and for what specific reasons

did he exclude fewer countries than the US?

Passengers presently booked to fly from an affected airport are unclear

about what the band will mean in practice. For those who fly on the

hand baggage only fares, what procedures are in place to

communicate changes before turning up to security at a busy airport?

Will UK passengers have to buy luggage to carry electronic devices?

What discussions has he had with insurers, who do not routinely cover

electronics carriage in the hold and what assessment has he made in

regard of theft and damage to devices? Efficacy, have restrictions

been put in place in response to specific threats that differs in

nature to the Al-Shabab attack that took place more than a year ago and

did not result in the loss of an aircraft. Have these measures be

made in addition and what evidence does he have in placing problematic

items in the hold is safer than the capping, especially with devices

with lithium ion batteries? Aviation security is under constant review,

can he assure us that all has been done to make sure regulations are

effective, consistent, and put the passenger first? We respond in

aviation security to the evolving threat we face from terrorists.

There are some things that we don't and I will not give him full details

of the background to the decision taken, it is in response to an

evolving threat and he would not expect me to do that but we have

taken steps we have taken for good reason. In terms of differences

between the United Kingdom and United States approach, their

approaches for them. What we have done is consider evolving

information, reached the decision about what we believe is in the

interest of the UK and protection of citizens. He asked about why this

does not affect UK... US operators and the answer is they do not

currently fly to destinations affected and other airlines do. We

have applied our change to the requirements on airlines, to all

airlines that fly the route, UK and non-UK. This is a matter we keep

under review and have done for some time and we have taken the decision

because we believe it is the right one to take against a background of

the evolving threat. He asked about hand baggage only and that is a

matter for the airlines to resolve. We have been in discussion with them

as they are preparing to implement the change and it will be for them

to establish how to handle bat in context of passengers booked in hand

baggage only and it will be a matter for the individual airline to decide

how to do it. Insurance, I will write to the association of British

insurers to ask them to be mindful. He makes an important point about

the risk of theft. We will ask the industry to be careful to take that

into account and be realistic about this. Otherwise, we have taken the

decision we have taken in a way we believe is necessary to protect the

safety of UK passengers, but he will understand that the background to

every decision of this kind inevitably is not based on matters

we can automatically put into the public arena.

Having just returned from a police cancelled trip we saw the effect on

the economy in Egypt on the continuing ban on flights to region

and we met first-hand with the Egyptians and they have concerns

they are singled out in some way, which might be the reaction of other

allies made today. Will he commit to discussing with other ministers a

diplomatic offensive to go to these countries and explain why these

actions are being taken and they are not being single that? Will he

liaise with his colleague in the Department for International

Development to provide extra assistance to these countries at

their airports because this will cause further disruption and some

have not got the capacity to introduce a new security measure? I

can give him a categoric assurance we are already in dialogue with

those countries. That we will take care to ensure we do everything to

help at the other end at their airports. We already cooperate

closely. This is not a question of singling out countries. We would

never embark upon a process of singling out countries. The

decisions we take our taken on the basis of what we believe the risks

are and where we believe we need to take steps to protect UK citizens.

Safety must of course be the priority but there are too many

loose ends here. Does the government have evidence the security risks to

flights from the countries listed are greater than those on flights

other countries, otherwise why have flights from these countries alone

been targeted? Why have the UK and USA apparently reached different

conclusions, I assume from the same intelligence, about the countries

from which in cabin electronics present the greatest risk, or of the

differences about something other than intelligence? If the presence

of electronics on aircraft flying from countries listed is a security

threat, why are there no restrictions on electronics in hold

baggage from those countries? What thought has been given to people

carrying electronics on board who change planes in countries not

affected? What liaison has there been with the countries listed with

countries not listed and with airlines, all of whose confidence

and cooperation will be crucial to the effectiveness of the measures

introduced? What action is he taking to ensure passengers get clear

information about what they are and are not allowed to take on board, to

ensure delays are minimised? Safety has to be the priority but there

really are too many loose ends. If there really are security grounds

for the restrictions he has introduced, he has to be clearer

about what those security grounds are, otherwise both the UK

Government and US government will remain open to suspicion that they

are unreasonably singling out countries in the Middle East and

North Africa, rather than thinking through properly what precautions

can actually keep flights safe from terrorism, wherever the aircraft fly

from. I have to take issue with the last point. The party opposite was

in power 13 years and his predecessors on the front bench

understood there are things we cannot set out in public that lie

behind decisions taken in the interests of passengers. That has

not changed through all the years. I understand his desire for

information, but the reality is we have an evolving security threat to

aircraft, we take decisions when we believe necessary, to protect

citizens. It is nothing to do with singling out countries nor what the

destinations are, the decisions we take are purely and simply based on

an evolving security threat and what we believe is the right way to

protect UK citizens. The US administration will take its

decisions about how to protect its citizens. We do not always have to

take the same decisions on behalf of both countries. We have done what we

think is right for the UK. You've raised other points. Transfer

passengers, the rules will apply to transfer passengers. As is the case

now, they will normally go through a further security check and subject

to the same gate checks and if they have a laptop, tablet, a large sized

phone, it will be placed in the hold. The airlines individually are

working with our support to provide the best information to passengers,

as will the Foreign Office and government agencies that play a role

but first and foremost our priority in response to a security threat is

to provide the best protection for citizens. Why are they safe in the

hold? As I said and I hate to be

disingenuous in terms of repeating answers, but I cannot discuss the

detail of that evolving security threat. We have taken what we

believe is the right decision in the interests of protecting citizens.

We cannot second-guess the security intelligence the government has

received and the safety of citizens is the primary concern of the SNP

and Scottish Government, who will work closely with UK Government to

ensure proportionate measures are in. Can I ask him what discussions

have taken place with the Scottish Government and did those include a

commitment to keep them and transport Scotland up to date with

events? Will those who are impacted by booking previously just with hand

baggage, who may be facing extra charges, have mitigation put in

place or compensation, and finally, what additional resources will be

available to UK airports if required to take forward these measures?

On that latter point, the impact on UK airports is not an immediate one

because these new rules do not apply to UK airports but we have asked

them to think practically ahead in case matters change. In terms of

liaison with the Scottish Government, the minister for

aviation and officials were in contact with the Scottish Government

yesterday and the Scottish minister and my honourable friend have yet to

fix a time to speak book will do so today and we will keep the Scottish

Government informed. With regard to people who booked hand baggage only,

we have been in discussion with airlines and we expect the airlines

will work a system that ensures people are not worse off as a result

of the changes. I commend my right honourable friend

for ensuring the paramount importance of our national security

and safety of British citizens travelling. Gatwick Airport in my

constituency, I am also grateful for him talking with the airport

authorities and tour operators in my constituency. Can I seek assurances

he will continue to keep them involved as this evolving situation

develops? I can give him that guarantee. We

are talking to the industry as a whole and it is my hope we won't end

up having to take further steps but we need to be mindful of the

evolving security threat and security of British passengers will

be top of our priority list. I am reassured security is paramount

and it must remain so, but could the minister please clarify exactly how

passengers will know what arrangements they have to make for

individual journeys and is he still looking at the situation at overseas

airports where it is known there are security concerns?

We have a widespread effort to ensure we provide protection to

citizens in the UK and when they are in other countries. We do extensive

security liaison work with other countries including the region

affected, and I am grateful to all countries we work with for the

cooperation and support they provide. It is in all our interests

we continue to maintain aviation and tourist flows and to provide

economic benefits to all parties that good aviation brings and we

will do everything to work with partners to ensure we have a safe

and aviation sector as we can. I think we all accept circumstances

change and threats will change over time. Could the minister confirm

whether or not there is a time limit to these changes and is there a

specific date when they will be reviewed?

In terms of time limits... The change will be implemented, going

forward from now by the airlines. They are being asked to have that

changes in place within a very short period of time. They and we will

have a communication job to do to people returning who will be

affected by this, there is a need to do that well. In terms of time

limits, we hope this is a temporary measure but we will keep it on under

review and keep these measures in place as long as they are necessary

to secure the safety of our passengers.

I accept the Secretary of State may not be able to answer these two

questions, but why does this only apply to direct flights? Are other

countries under active consideration to be added to the list?

I think all I can honestly say in response to the questions is we keep

these issues under constant review. The decisions taken this week we

believe are the right ones, in the face of the evolving terrorist

threat. Thank you Mr Speaker. I think the

Secretary of State for his update. Many of my constituents working at

NATS, for those starting their journeys at regional airports, how

will the communication start Tommy 's journeys?

It will be very much the responsibility of the airlines going

forward to explain this. We will provide whatever support to them.

Perhaps if I could extend my thanks to all those people in the UK

airlines and international airlines, with whom my department has been

working in the last few days. They have been enormously helpful and

cooperated in what is a difficult change for them and I think we

should be very grateful to them. Can I ask the Secretary of State

about flights from this country... Is he confident that if a terrorist

try to get a laptop or an iPad onto a plane here they would be detected

and there would be absolutely no chance of getting it throughout

security? Well, Mr Speaker, our airports and

security industry I believe are among if not the best in the world.

I think we should be proud of how well our airports are protected.

What I would say to him is the decisions that we take and will take

in the future will be based upon our assessment of what is necessary at

any particular time, and our judgment is the changes we are

making today is what is necessary at this moment in time given the

evolving threat. My right honourable friend is

absolutely right when he says security must be the Government's

top priority, something I am sure people will feel comfortable within

the long run. My honourable friend mentioned minimising disruption and

frustration for passengers. I want if he could tell us what discussions

he's had with the Home Office counterparts that border force to

minimise disruptions when on Monday this week Gatwick only had five

scanners working from the very many they had.

Obviously that is disappointing if there is a temporary problem at the

Apple. Gatwick, my experience of travelling through there in recent

times, is its pretty good. I think probably something must have gone

wrong on that particular day. What I would say to him is I know all of

our airports and those in the board border agency will work with the

airlines to try make sure that any steps we take to address security

issues are done so in a way that minimises the maximum possible

extent. The Secretary of State is absolutely

right to take whatever measures are necessary to protect the public from

the threat of terrorism. But further to the question put by the member in

respect of Egypt, he mentioned to Messier, which has already been

suffering because of the travel ban. This will be an added burden on

those travelling from Tunisia is the Tunisian authorities came to the

Government and asked for assistance with the initiation of new scanner

equipment would we be willing to help them provide that kind of

equipment? Well, Mr Speaker, I'm grateful to

the right honourable gentleman for his supportive comments. We already

provide extensive support and will continue to do so. My honourable

friend the Minister is due to be visiting there in a couple of weeks'

time. We are already in contact with the Tunisians and with the Egyptians

and we will do what we can to help them, both with this issue and

related issues, but will always put the safety of our own citizens

first. Further to the point made raised by

the member for Devon East there are about 100,000 people employed in the

tourist industry and Shah Mel Sheikh. This could lose their jobs

if the flight ban continues. Does my right honourable friend consult with

other people I see sitting on the Treasury bench to ensure the impact

of that degree of unemployment and the impact that could have on the

wider supply chain jobs that could lead to further radicalisation of

people in the south Sinai are considered?

What I would say to my honourable friend is we have extensive

conversations with the Egyptians. We have the situation in Sharm El

Sheikh under permanent monitoring by my right honourable friends in the

Commonwealth office and Home Office, who are in regular contact about

these issues, as is my own department. Fundamentally, whilst I

would love to see us resume flights to Sharm El Sheikh at the earliest

opportunity, we can only do so at a point where we are confident about

the security and safety of our own people. I'm sure once they have that

confidence we would want to resume those flights.

The Government is of course right to act swiftly in response to

intelligence regarding terror threats but a number of very

important questions remain. I think as another member noted, some

passengers will change planes in third countries. What discussions as

he had with his counterparts in other countries about the

implementations of these restrictions for transfer

passengers? Well, Mr Speaker, I said yesterday

as we took the decision, we have already had contact at ambassadorial

and add some places at ministerial level with our counterparts in other

countries. They will each take their own dishes decisions about what is

necessary, but we are clear what is right for our citizens. -- their own

decisions. Other countries will be contemplating what their best steps

are in terms of their rent citizens. As this is an evolving threat can my

right honourable friend confirmed that countries and indeed airports

could be added, and indeed removed from the list the Government has

public should, should the British intelligence services so recommend?

We will obviously keep this and other security issues in relation to

our aviation sector under review. We will take whatever steps in future

are necessary to provide that protection. It is my hope that this

new set of measures will ultimately prove to be temporary, but first and

foremost our focus will be on the security and safety of our

passengers, and so that will be a deciding factor on what we do in the

future. The US ban will be enforced on

Saturday, following 96 hours notice. He said earlier airlines here

implemented over a short period of time. Has he given the airlines in

the UK an indication of a firm deadline by which he expects

implementation of the UK ban? We are expecting this to be

commended in the same time frame. I am sure the Secretary of State

would agree on a day like this it should be about reassurance. That

threats are reacted too, that passengers shouldn't be panicking

about these announcements. What steps will be taken to reassure

passengers as well as inform them of government is doing?

Let me be clear to the House again. We are not saying to people not to

travel to these countries. We are not saying to people cancel your

flights or cancel your holidays. We want aviation to continue as normal.

We are simply taking additional security measures to make sure that

that aviation is safe for those people who travel and there is

absolutely no change to Foreign Office travel advice, no changed of

advice to people about how and when they should travel. This is purely

about making sure when they travelled they are safe.

The Secretary of State has said that anyone who is travelling with a hand

baggage only dig it would not be charged or out-of-pocket and

encouraging the airlines to take the right course of action. With the

Secretary of State considered doing something further to make sure that

no one is going to be charged for putting hand baggage in the hold?

Mr Speaker, this is something we are in discussion with the airlines

about. This is not about inability to take hand luggage into the cabin.

If somebody arrives at the gate with one of these items in their bag it

will be put in the hold. It's not about saying you can't have hand

luggage. So some people may choose to put their handbag into the hold

it is simply about the device itself.

Thank you to the Secretary of State. I am not seeking any information

from him on the nature of the, but I am compare concerned diplomatic

diplomatic relationships with allies. I have returned Egypt and

its security arrangements are that jeopardises the longer term security

of UK citizens. That is precisely why these are

difficult issues and why we will do everything we can to strengthen our

partnerships with those nations and to send a very clear message that

not saying to people as a result of this change stop flying on those

routes. This is about saying, actually, you should have more

confidence in flying on those routes because I believe the measures we

are putting in place today should protect your safety, rather than

have the opposite effect. I commend my honourable friend from

Luton for raising this up important question. We are approaching Easter,

a time when many families will be taking flights, many of those

families will be nervous flyers or have nervous fliers among those

families. What reassurance can be given to those families, taking

flight from other destinations, not once listed, that the terrorists are

not just going to go we can no longer fly and use our laptops in an

appallingly offended way on these flights, we will go to another

country that doesn't have a ban. What reassurances can those

countries have? The reassurance I would give to

Point of order. Previously on a business question I pointed out the

Lib Dems and Labour have been fined for conduct in the 2015 election and

I drew attention to the fact the Tories were under investigation and

the Electoral Commission expressed concerns finds were not a deterrent.

The leader of the house dismissed me with a how dare I raised that? Now

that the Tories have been fined a record ?70,000, how can I make sure

the record is correct that the SNP is the only major party not find at

the election and there were no financial shenanigans. Thank you for

the point of order and characteristic courtesy in giving me

advance notice of his intention to raise it. I would say first of all

he has found his own salvation by putting what he regards as the

factors of the mass of the record. Where they will permanently reside.

Doubtless to the great delight of the honourable gentleman and

possibly of other people in Caol Marnoch. Secondly, -- Kilmarnock.

When the honourable gentleman says what can be done to secure an

apology from the leader of the house, I fear that that may be a

case of optimism triumphing over reality. I was here at the time. The

leader of the house is responsible for what he says. I think the leader

of the house offered a robust response in the course of what might

be thought to be a knock-about exchange. I have always thought the

honourable member for kill Marnoch is a steely fellow himself, but if I

am mistaken on that front, can I commend him the benefits of

acquiring at least one of the characteristics of the rhinoceros. I

am referring not, of course, to aesthetic beauty, but two notable

resilience. We will leave it there for now. If there are no further

points of order, at any rate not for the moment, we come now to the

presentation of a Bill. Order. I'm sure honourable members will await

with anticipation and a degree of excitement the presentation of bill

in the name of the right honourable gentleman for Leicester East, Vista

Keith Vaz violent crime sentences Bill. -- Mr Keith vows. Order, we

come now to the Ten Minute Rule Motion. Mr Tim Farron. I beg to move

leave be given for me to bring in a Bill to make provision for the

holding of a referendum in the UK and Gibraltar on the proposed terms

for the United Kingdom to leave the European Union and connected

purposes. In June last year a narrow majority voted for the UK to leave

the European Union. I regret the outcome but I am a Democrat and

accept it. A week from today divorce proceedings will begin and the

country faces a greater period of uncertainty than most of us have

experience. One thing is certain, democracy did not end at 10pm on the

23rd of June last year. The Secretary of State for Exiting the

European Union aid the case eloquently for what is now this

proposal from the Liberal Democrats and others and used the phrase a

first mandate referendum and then a second decision referendum and said

and I quit, the aim of the strategy is to give the British people the

final say, but is also to reinforce the legitimacy and negotiating power

of the British negotiating team, end of quote. I could not agree with him

more. It is a great shame he does not agree with himself any more. In

rejecting a second referendum on independence to Scotland last week,

the Prime Minister said, I quote, I think it will be fair, I am sorry,

would not be fair to the people of Scotland because they are being

asked to make a crucial decision without all the necessary

information, without knowing what the future partnership would be or

what the alternative of an independent Scotland would look

like, end of quote. She is now asking the United Kingdom to proceed

to forge a relationship with the rest of Europe and the world on

exactly that basis, a decision taken last June and without as she says,

all the necessary information. Without knowing what the future

partnership would be. The Secretary of State for exiting the EU original

case stands. We started the process last June with democracy, so we must

end it with democracy. I accept we have had our mandate referendum in

which the British people voted to leave but voting for departure is

not the same as voting for a destination and the government

should give the British people a decision referendum to be held when

the negotiation is concluded say that the people have all information

and know what our future partnership will be, because it is the people

who are suffering. The people must have their say over what comes next

and this Bill would enshrine in law their right to do so. Last week when

debating even the right of Parliament to have the final say on

the Brexit deal, the government displayed ludicrous inconsistency

and double standards. They asked us to take back control but the first

thing they do is undermine the principle of democratic

accountability. By refusing to allow a meaningful vote in this House. The

detail or general nature of the deal this government may reach with the

EU is currently completely unknown and a mystery to us and to them, yet

the British people are now told they must simply shrug and accept any old

deal, irrespective of its content or quality. When a deal is done it will

be signed off by someone. The only question is who? Will it be the

politicians, will it be the people? My party believes the deal should be

signed off by the people. There were no plans, instructions, prospectus,

vision offered to voters by the campaign. I did not agree with the

case for Scottish independence in 2014 but credit where credit is due.

There was a 670 page prospectus of what Scotland outside the United

Kingdom would look like will stop believers did not present the

British people with a prospectus. All they gave us was a lie on the

side of a bus. The pro-independence campaign in Scotland presented the

Scottish people not just with the option of departure but also with

the option of destination. The Scottish people voted against

departure and destination, but if the result had gone the other way

there would have been no need to hold a people'svote on the final

deal of independence from the UK. I still believe it is impossible for

this government to negotiate a better deal with Europe than the one

they currently, we currently have is a member of the European Union, but

these negotiations will happen and a deal will be reached. Surely it is

the only right and logical step to take to allow the people to decide

whether it is the right deal for them, their families, jobs, their

country. No one knows what the final deal will look like, but what we do

know is the Prime Minister has already given up on the United

Kingdom's membership of the single market without even putting up a

fight. In January, after months of saying Brexit means Brexit, she

finally came clean. Brexit means jumping out of the single market,

the biggest marketplace, with all the consequences that will have for

jobs and our economy. The Prime Minister is entitled to make that

choice, but let us be clear, it is a choice, one of the reasons why I was

astounded that the right honourable gentleman for is lit in North and

many in his party, but not all, made the decision to vote with the

government on Article 50 because this House did not vote to enact the

will of the people, this House voted to interpret the will of the people

and just like the Conservative Party in 2015 in their manifesto, I

passionately believe ending our membership of the world's biggest

free market will do damage to this country, it is vital for our economy

and that is my my party and others refused to stop making the case that

this deal must include membership of the single market. The Prime

Minister had the choice to pursue a former Brexit that united our

country and reflected the closeness of the vote and sought to heal

divisions between leave and remain. She could have fought to keep us in

the single market if she wanted to. She has chosen not to, she is

pulling is out before negotiations have begun will stop yes, narrowly,

the British people chose Brexit, but nobody voted for severance,

irrelevance and decline that this exit from the single market will

bring. It is this Conservative government that has chosen this

Brexit. The referendum vote does not give the government a mandate for

absolute severance from Europe. For 40 years the anti-European crowd

have been saying words to the effect of in 1975I voted to be in the

common market, I didn't vote to be in the European Union. Now we turn

that on its head because in June, people narrowly voted to leave the

European Union, but nobody voted to leave the common market. They were

simply not asked. Nor did they vote to place a question mark over the

status of friends and neighbours and loved ones to happen to be born in

another part of the European Union. The action of this government and

unwillingness to guarantee the rights of EU citizens living here is

shameful and contrary to British values of openness and tolerance to

refuse to do so. What I am seeking to do is to reinforce and strengthen

the will of the people to allow the people to exercise their democratic

rights and duties by giving them a choice over what we and our children

will have to live with for generations, to either accept the

deal the government cheese, or to say thanks, but no thanks, and opt

to remain in the European Union. The gate has been opened, the direction

is set, but the only way to achieve democracy and closure for both leave

and remain voters is for there to be a vote at the end and if the Prime

Minister is so confident what she is planning to do is what the people

voted for, then why not give them a vote on the final deal? What is she

scared of? What started with democracy cannot end with a stitch

up. The deal must not be merely rubber-stamped, it must be agreed by

the people. The question is that the honourable member have leave to

bring in the Bill. As many who say aye. On the contrary, no. I think

the ayes have it. He will bring in the Bill. Tom Brake, Norman Lamb,

Greg Mulholland, Mr Mark Williams, Heidi Alexander, Geron Davis,

Caroline Lucas, Jonathan Edwards and myself.

The terms of withdrawal from the European Union referendum bill.

Second reading, what day? 12th of May, 2017, sir. 12th of May, 2017.

Thank you. Order, we come now to the programme motion. The ministers

move. Move formerly. Thank you. The

question is as on the order paper. As many of those who say aye, on the

country no? I think the ayes habit. The clerk will proceed to be the

orders of the day. Pension Schemes Bill laws as amended to be

considered. We begin with new clause one, with which it will be

convenient to consider the new clauses and amendments listed on the

selection paper. To move new clause one, I call Mr Alex culling --

Cunningham. We believe this is a good bill and goes a long way to

regulating trusts and looking after interests of members. Sadly it does

not address the issue that has been ruled out of scope of the Bill but I

am pleased to report Stockton Borough Council backed it but Tory

councillors abstained on that vote and so clearly they are not happy

with the government, either. That said, we feel there are areas in the

Bill that could still be improved and scheme members even better

protected and informed. After the Commons committee stage we

failed to convince the Government that having reviewed the Minister 's

argument we still believed there were a number of issues we needed to

cover at report stage this afternoon. The first of those I am

forced to bring forward is the new clause one, the return to the issue

of a last resort to master trust. The written statement read received

on Monday, I think the removal of this clause is significant. I was

surprised that he felt it was not. Mr Speaker, Mr Deputy Speaker, this

new clause looks to ensure that in the event of a master trust

failing... Sorry, excuse me, I've lost my place. This new clause looks

to ensure in the event of a master trust failing there is a thunder of

last resort, some money in place guaranteed the scheme members are

not left out of pocket through no fault of their own. This would in

effect act as a final underpinning of the promises that have been made

to scheme members. Giving them recourse to legally establish a

funding organisation committed to making good on scheme members to

use. When debated the ministers failed to add this to the Bill,

placing an unnecessary burden... The risk of collapse is minimal, the

existing master trust would pick up any persons affected the Government

consulting the industry on a panel of White knights who would commit to

stepping in to ensure all scheme members are protected. I'm glad we

have the Minister on record, saying there is no chance of their master

trust going bust under the regulatory regime this Bill creates.

It's clearly a gamble he is willing to take. On this side of the chamber

we are not prepared to gamble with peoples pension savings. We believe

that in order to best protect scheme members we need strongest possible

regulatory environment in place, unlike the minister we are not

content to leave things to chance. We have support from the industry

itself on these proposals. For example the chair of standard life

has called on the Government to be the founder of last resort because

it is, they say, their foulups have led to these failures of master

trust. The Minister plans for a panel of

white knights. Does that suggest he does accept that there is a chance

that a master trust might slip through his regulatory regime and

leave scheme members unprotected? If he does, why not go the whole way

and put the proper guarantees on the face of the legislation? There is

simply no guaranteed that another trust will choose to pick up one

that is failing. Why would they? What obligation do they have, and

why would it be in their interests to do so? There have been a few

pragmatic actions in this area but nothing, nothing is guaranteed.

We all know the pensions industry and financial services industry have

seen plenty of failures. At the Minister can tell us what happens if

a large master trust fails and the data is in MS takes months to

transfer members to a new skin? We cannot hope another trust will

simply pick that up but instead we must intervene now to ensure a

proper back-up plan. The Government must prepare for the worse case

scenario and nothing I've seen so far convinces me that ministers are

doing so. This is why there needs to be a

thunder of last resort, because we must predict what could possibly

happen, even if there is only the slightest chance, and ensure we have

protection in place. I ask again, why won't the Minister provide

people all over this country with a 100% assurance that the Bill without

this provisional is enough to protect members? He must guarantee

that no master trust will be in a situation whereby it has failed and

has insufficient resources to meet costs, if he is to ignore our

sensible amendment. In the absence of greater clarity, it is essential

that this new clause remains in the Bill.

I now turn to new clause two on the issue of member nominated trustees

the master trusts. I would remind the House all the investment risk

lies with the member and not the sponsor or the provider of the

scheme and they should therefore have representation at the

decision-making levels of the scheme. The pensions act 1995

introduce the requirement for company pension schemes to have

member nominated trustees. If the scheme's sole trustee of the

company, including the employer rather than individuals, scheme

members will have the right to nominate directors of that company,

member nominated directors. The 2004 pensions act enshrined the act that

at least one third of scheme trustees. The pensions regulator is

clear that master trusts are covered by this legislation, which is why

some already have member nominated trustees. What the TPR offers in

explanation is that that exemption that can be taken by master trusts,

given the reason having Paul of members poses problems of choice. We

find that an inadequate reason for exemption. The greater the number of

members, then surely the bigger the of choice. We agree independent

trustees can adequately represent the interests of members if they

have no stake in the investment process. What's more, they are paid

and chosen by the master trust. This exemption seems like a convenient

way of denying the right to representation of those who have a

material interest in the performance of the master trusts. So we are

returning with an amendment that seeks to give members the law they

should be entitled to. My references apply equally to M MDs. The

Association of member nominated trustees is adamant that master

trusts must be obliged to have member representation on their

boards. It is no surprise that a master trust are lobbying against

this, but these companies are mostly profit-making entities. I'd say it

is that their own best interests that they have scheme member

representation in order to win the confidence of the scheme members.

The role of the trustee boards is sometimes underplayed or

undervalued. The association said, "Members are particularly comforted

by having a member nominated trustee for their scheme. It helps them to

feel reassured their retirement interests are truly being met and

also they are being ripped off with excessive costs and charges." They

are the only ones who have no personal interest or gain other than

that of the members interests. Shared action also agree the saver

should be able to subject decisions made on their behalf to healthy

degree of scrutiny and challenge. Ensuring effective governance of

pension schemes remains a challenge, whilst there is a clear absence of

member nominated trustees in the majority of master trusts. However,

while some companies choose to operate to contribution scheme, most

auto enrolled members will not find themselves paying into one. Instead

the vast majority of people will find themselves saving into a master

trust or a group personal pension arrangement. In these schemes member

representation is on-board more rare and at this point I would like to

refer back to the concerns TPR made about master trust governance.

In January 20 13th the pensions regulator said, "We have identified

a number of characteristics that if present may prevent master trust

schemes from delivering good outcomes. These are,

conflict-of-interest as a result of the relationship between the

provider and trustees. Decision-making powers resting with

the provider rather than trustees. A lack of independent oversight in

some master trusts. Unlike traditional schemes, they are

unlikely to be involved in the decision-making processes." The Bill

may go some way to addressing these concerns but doesn't go far enough.

If we can build greater trust in the system, increased diversity and

bring a range of different perspectives and experiences and

highlight areas that are of interest to members. Once again we find no

real impediment to this amendment. The law require master trusts to

have master trustees applies. Exemption exists but it is not

required and in our view should be overridden.

Continuing with the theme of engaging with new members, clause

three. New clause three requires that one year on from the

incorporation and registration of master trust by the pensions

regulator the Government will fully review member trustee and

representation, member engagement and annual General meetings for

members. The purpose of this amendment is to ensure there is a

review of the new master trust governance and member engagement

processes. The pensions regulator guidance stressed the importance of

understanding and engaging with members, in order to define

objectives to this scheme and setting an appropriate strategy. For

example, the TPR quote both practice of occupational trust they schemes.

TPR has stacks of advice on these issues the master trusts to follow

but we want a commitment from the Government that they will ensure

that master trusts are operating in the interests of and the potential

of a printout conflict-of-interest, of a printout conflict-of-interest,

the profit motive, doesn't get in the way. We need to make sure there

was an opportunity for experienced eyes to take a good look at the

system a year after its creation. If there are risks, they must be

accounted for and one way to do this is to perform a government

inspection of the system. Now I attended new clause four which

requires master trusts to hold an annual member meeting and sets out

ways to ensure members are properly given the opportunity to be

involved. It is now common practice for

pension funds to hold a meeting with members on an annual basis. Good

member communications provided at the right time and in an accessible

format are vital if members are to engage and make decisions that lead

to good outcomes in retirement. In the committee debate the minister

suggested that "Documents relating to the governments of the scheme,

such as the trustees annual reports, the chap's statement and statement

of investment principles have to be provided on request." Having to

request information for what you're paying for is the wrong way around.

Let's not forget that many master trusts are profit-making, so members

should be given information as a matter of routine and not of

request. An annual meeting for members

ensures that trustees and administrators can be made human and

accountable, rather than some distant, bureaucratic, faceless

place. When deciding on the format of communications they should take

account of innovations in technology that may be available to them and

appropriate to their members. This would allow the more engage members

to hear a presentation from trustees and senior executives about how the

scheme has managed the retirement assets over the previous year and

what plans the scheme had to deliver strategy and manage risk into the

future on behalf of members. The pension regulators guidance

accompanying its new DC code highlights one way that

multi-employer schemes can stay close to members. Through the clause

master trusts would be brought into line with normal practice in the

corporate sector and among the growing at number of pension

schemes. I want to return to new clause five, to the issue of groups

currently excluded from master trust savings, carers, the self-employed,

those working multiple jobs and people on low incomes. As it stands

the Bill does not expand the successful auto in Roman policy and

it could have made a real difference to a number of groups who evidence

suggests are not saving adequately for their retirement. The minister

and I debated this in committee so I shall turn to this issue only

briefly. As I recognise them, the Government has announced a review

relating to the operation of auto enrolment. Currently the scope of

that review is too broad. The evidence speaks for itself. Too many

people are not putting enough away to guarantee the secure and

dignified retirement that the Labour Party has always worked to provide

and continues to strive towards today. 37% of female workers, 37% of

workers with a disability and 28% of black and ethnic minority workers

are not eligible for master trust enrolment. In committee the minister

suggested gender equality was not an issue under auto enrolment savings.

I suspect they were referring to the participation rate which is fairly

equal between genders. The statistics have quoted however Rick

Waite relate to those who are not eligible. Perhaps the Minister can

look again at this issue and right if he has evidence to the country.

On the specific groups I would like to press the minister on the issue

of carers, who as he knows make such a vital contribution to our society,

public services and economy. The minister suggested he would like

Cerys to be included under the review of auto enrolment but

accepted they are not currently specified. -- carers. Can I push him

to include carers under the review now and it would be a comfort to

them if they knew the situation was being looked at by the government.

Turning to the self-employed, I know the government have had a lot to say

about the self-employed, though I note they have gone quiet on the

issue in the past week. With those with multiple jobs it is good they

are included and I was interested in the minister's point that those

earning over 6000 could access master trust savings. Could the

minister right to me or maybe say to the house and clarify the policy on

this point and tell the House what the government is doing to ensure

eligible people are aware of this particular right under the law.

Those on low income will need to be addressed. I hope the government

will go further than freezing the trigger threshold as appears to be

their approach and lower it to ensure many more are included in

master trust saving. I met with Royal London last week and they

posed the question why every pound earned is not taken into account for

employer and employee contributions, is this something the minister would

add to the review? Share action have contacted me about auto enrolment at

and said they believe the second phase needs to be focused on

governance, choice and communication, getting people

engaged with their pension savings. Does the minister agree? Given his

responses on the expansion of eligibility for auto enrolment I

fail to see why the government wouldn't accept the clause. Should

he be committed to enfranchising these groups into master trust

savings why not make it clear in the legislation today? I turn to

amendment one which applies to the whole industry and that is the issue

of transparency. Opening the second reading debate on the Bill, the

Secretary of State said, transparency is a key area, hidden

costs and charges often they wrote pensions. We are committed to giving

members site of the costs that affect pension savings. On that we

agree and I am pleased he put it on the public record that costs erode

savers' pensions. That is a line in the 2015 Dutch central bank report

which said, investment costs are an important determinant of pension

fund performance, and high investment costs can impact

beneficiaries consumption as to reduce the net rate of return on

investment and subsequently raise the costs of providing pensions.

Despite this the Secretary of State's statement, the government

have resisted any attempt to do something, always missing something

may be done but never doing very much. The government hides behind

the issue of complexity but it has been glaciated with the investment

association the tools to deal with that. The area of pension funds

ready to be analysed is the local government pension scheme. It is due

to be endorsed by the minister to ensure they deliver best value for

sponsors and members. The architecture to get the data analyse

it and present it is the same process of discussion with a view to

being built on the former platform for which other projects including

value for money analysis needed for all workplace pensions and that can

be delivered. I believe the minister is a fan of this work and I would

hope he and the government would rise the easiest and most efficient

way to ensure the data for master trust is adopted is to adopt the

investment cost templates sanctioned by the DC LG and data points agreed

with association members. The purpose of this amendment is to lay

down the reporting obligations of master trusts. At the moment they

only report on administration and asset management fees. The amendment

requires additional reporting off implicit costs. The only obstruction

to this process is the government. It is contradictory. Why have it in

one section of the system and not in another? We believe the government

is holding back the scheme member from getting best value. The

employers in master trusts cannot deliver under current arrangements.

There is nothing simpler than setting out a requirement for the

reporting of explicit and this implicit costs. Members must be able

to discern the impact of trading on funds. The minister said, what

members mentioned makes the point not that active fund managers have

more costs. This is what was actually reported. Comparing the net

return on a ?20,000 investment over 20 years, assuming that both funds

had the same return before charges, and invested in a typically low-cost

fund would earn ?9,554, and improvement of 28.4%. More on a

?20,000 investment than a typical active fund and this number could

rise to ?14,439 or an increase of 44.4% once transaction costs have

been taken into account. The evidence is clear, investing in a

low-cost passive fund delivers more returned than an active fund, which

is why it is important to have the reporting requirements changed. We

can look to the Netherlands experience. It is a requirement of

Dutch funds to report on administration and management and

transactions. The Society of pension professionals agree and they say the

key is to ensure information given to consumers is sufficient to

empower them and provide customers with comparisons to enable them to

choose the best product and providers. This amendment helps the

government. Master trusts and scheme members to match the best in

practice reporting model. Another two is another to increase

transparency and ensure members are properly informed. In this case if

triggering event the pension in place. The minister replied to the

tabling of this amendment with the assumption members were passive

recipients. He said, remember, my members do not take an active

decision to join, they join through the employer and are not engaged in

the scheme, their employer is the conduit. Such a paternalistic

approach to citizens a disservice. The government rejects attempts to

reform the Bill to make it member focused. This approach labels

members as passive and not engage participants get the government

policy is to place responsibility on the individual to take care of their

pension provision. They seem to be standing in the way of members being

given information that would allow them to make informed decisions. Why

is this policy so contradictory? The pension pot is theirs, not the

employers' so they should buy right have natural justice and be

informed. Here we seek to ensure the information flows through the

communication chain. If they found out such an event happened,

something that affects their cash, and only found out second-hand, it

is bound to result in lower levels of trust. How would honourable

members feel if no one told them there was an issue over their

pension? It is a simple chain. If it can go to employers, it should go to

members and in this electronic age there is no good reason for that not

to happen. I would like to turn to amendment four in relation to pause

orders, which is about responsibility to scheme members. A

pause order is put in place by the regulator if they are satisfied

making the order will help trustees carry out an implementation

strategy, and during the committee stage of this Bill labour submitted

an amendment because it felt there was not enough protection in the

event of a master trust being pause. I give the example of a hypothetical

elderly woman who relied on her pension from the master trust and

had little income without it. A pause order can last up to six

months whereby the master trust can opt not to pay up pensions,

potentially six months that elderly people would have to find

alternative means to survive and that is not acceptable. I referred

to a circumstance where an elderly woman has not been informed of the

order as there seems to be no requirement for anybody to inform

her. I pose this question to the minister, and I was grateful for his

reply in which she said existing legislation ensures the regulator

will notify any person who is to be affected by action is exercised

through the statutory internal procedures. I hope he will clarify

when the scheme member would be informed. I think it is appalling

pensioners are denied access to their own pension money in such

circumstances. I have been assured members are protected in this

situation, even in the event of an order. If this is the case, why

would the master trust be unable to make payments to pensioners who

might be vulnerable. It strikes me as bizarre that this government is

calm about the potential repercussions on the vulnerable if

payments stopped. The minister said stopping payments would only happen

in rare circumstances. I hope he will take the opportunity of telling

the house what the circumstances could be and provide members with an

assurance they will not lose out during a pause order. We would amend

the clause and his sister pensioners are able to receive payments. I

submitted the new amendment three because I am concerned the pausing

of payments under an order is fundamentally against the aims of

what auto enrolment sought to achieve. The Bill as it stands would

mean if an order was put on a master trust it would no longer receive

contributions from the employer or employee and I note there is a

similar amendment from the SNP. I believe we are trying to achieve the

same things but not as they chat among themselves at the moment but I

am sure they are trying to achieve the same things. Whilst I agree with

the measure that master trusts would be in no fit state to continue

taking contributions, I do not agree that as a result members will get

contributions back into their pay packet and employers let off making

contributions. This amendment insures contributions made by the

employee and employer are not lost. This is important when we look at

low earners and a potential six-month pause order could see them

lose out on vital contributions. The minister may think a pause order is

unlikely to last six months but it can. The amendment proposes that in

the event of an order the employer would maintain the contributions

until the order is lifted. Maybe the contributions could be said by

themselves, it could be argued, but why, through no fault of their own

should they lose contributions to their pensions? Does the minister

agree workers should not lose out on contributions during a pause order?

I am concerned that if we don't put the measures in place to protect

people, even with the small chance something might go wrong, we will

have failed them. I am concerned the lack of transparency in this scheme

is a problem and concerned the problems lie with ensures companies

and master trusts and I am concerned about the low-paid, person with

multiple jobs, the self-employed, carers, who have not been looked

after by this Bill and I am concerned the government have missed

out on the fonder of last resort clause. I look forward to his

response -- funder of last resort. The question is the new clause one

be read a second time. I rise to move new clauses six, seven, eight

and nine, and amendments, five, six, seven, eight and nine. There is much

in this Bill I would commend. It introduces regulation for master

trusts that will help shake confidence in pension savings,

typically for auto involvement. As that committee stage we sought to

work with the government to bring forward clauses and amendments to

enhance the Bill as well as dealing with other shortcomings in pension

is appropriate to the Bill. I am disappointed the new clauses ten and

11 were not selected for debate. The minister knows my view that my

approach is to work constructively where we can to encourage consumer

participation and whilst there is much elsewhere, I would like to see

greater clarity delivered on, I congratulate the government and the

list of bringing the Bill forward. It is an important step forward

atten Hans egg the appeal of auto enrolle. It is important that we

take the opportunity of this legislation, to make sure that we

have the appropriate regulatory steps in place. I would encourage

that when we do review it, we look positively how we can take it

forward, for part-time workers, those who have been excluded, many

with multiple job, particularly Westminster and the self-employed.

Charting a way ford that builds pension entitlement in the way that

builds consensus, perhaps avoiding the screeching U-turn we saw from

the minister's colleague the Chancellor in recent days.

Mr Deputy Speaker, this is a serious subject, and this bill should be

seen as part of a wider debate, as how we increase panion savings. --

pension. I was struck to read in the Government's Green Party paper on

defined benefit schemes that the average defined benefit scheme

payment is as little ass ?7,000 per annum. We have a paper highlights

income changes threatening pension freedom. It is clear that

collectively, there is more to do to encourage trust and confidence in

pension save, and in particular, that all are encouraged to save at

an appropriate level to ensure dignity in retire. E. We on these

benches will work with the Government on this agenda.

In the meantime, this bill is a welcome step forward. I hope that in

the spirit of engaging positively, the minister will give careful

consideration to the amendment that we have tabled. There should be seen

as clauses an amendment that seek to improve the bill, they are not any

any way shape or form wrecking amendments. Let me start with new

clause six, this new clause makes provision for the Secretary of State

to restrict exit fees paided by member, it is not clear to us why

master trust members should have to pay any exit charges. It is welcome

that the government are placing a 1% cap on exit fee for current members

and no exit fee for new member, however, why the threat of exit fees

for existing members? We know that large fees have been charged on exit

in the past, and it is clear we need to protect savers. I asked the

minister to confirm at earlier stage there's would be no exit fee for an

individual leaving a master trust. The minister responded, that when a

master trust was closing, it could not Levy a charge, but I would

appreciate if he would make it explicit that fees should not be

levied in all case, as far as new clause 7, 8 and 9 are concerned. 7

would require the Secretary of State to make provisions to amend Section

75 of the Pensions Act 1995, in order to protect unincorporated

business, those at risk of losing personal assets, including their

homes. New clause eight would require within six months calendar

time from the date of which this act comes into force, the Secretary of

State must conduct a are view of the actual mechanism used to value

pensions schemes liabilities under Section 75 of the pensions act 1995.

A new clause nine, would compel the Secretary of State that must by

regulation exclude from the calculation of the act, the orphan

debt and any non-associated multi-employer scheme.

Mr Deputy Speaker, these am momentment would help deal with the

situation of plumbers in Scotland. -- amends. The scheme is managed by

a group of directors and appointees from the association of plumbing and

heating contractors in England and Wales. The scheme has over 36,000

members and assets is in excess of 1.5 billion. Under Section 75 of the

Pensions Act 1995, employers can in certain circumstances become liable

for what is known as a Section 75 employer debt. The debt is

calculated on a basis which tests whether there would be sufficient

assets in the scheme to secure all the member benefits by buying

annuity contract from an insurance company. Legislation specifies a

debt becomes payable when the employer becomes insolvent, winds

up, changes legal status or ceases to have active members in the

scheme. While we must be mindful that the purpose of these rules is

to protect pension benefit, however, the way they are currently framed

creates problems for some stakeholder, we are sympathetic to

the concerns raised... I will happily give way. Does he I degree

with me it is because of such examples of those he has already

touched on of unincorporated businesses, that it so pertinent

right now as to why the Government has to bring forward a solution now

rather than wait for the opportunity to pass? I am grateful for my

honourable friend and she is right, I mean these are complex issue, that

is why we make the the suggestion we are willing to work with the

Government on this, we have to find a solution to this, at the end of

the day ordinary people who have done the right thing, are being

faced with losing their house and that cannot be right. It is an issue

that has to be resolved. There are a number of options for the government

to consider, each one has complications for the pension

schemes and members, we would urge the UK Government to weigh up the

interest of employers with the need to protect benefits for pension

schemes. The former pension minuter in in the other place indicate shd

woe would look at how a solution could be reached. We need the same

assurances from the minister he will work to find a solution and use the

bill to bring forward a solution. Mr Deputy Speaker, their main concern

is for unincorporated businesses, who are at risk of losing their

personal asset, for government to conduct a review of the real methods

used to value pension schemes liabilities, as they believe the

calculation of Section 75 employerer debt on a full anew the I basis is

detrimental to schemes given current circumstances. They argue that

orphan debt and multi-employer schemes should be excluded from the

calculation of Section 75 employer debt and they suggest provided the

scheme is deemed to be prudently funded the PPF acts as guarantor of

last resort. They believe any changes in legislation should apply

are the speck thetively to all employers from 2005. It would be

helpful to get the Government's view on this request. Mr Deputy Speaker,

snip F met with the minister and advised SNP MPs that the minister

confirmed that the objectors may have been incorporated within the

green paper. We are interested to hear the Government's view as to

whether or not it has identified the solution. Briefly I want to make

passing reference to my two new clawses that have not been selected

for debate. I wanted to signal my disappointment and put it on the

record. Firstly beginning with new clause ten, this new clause would

require the ebbing is triof state to require... State ten pension age

equalisation, we have disappointed that a pension bill has not been

brought forward to deal with this. Give way on that please? I will

happily give way. Does the honourable member agree with with me

that Government are ignoring this opportunity much like they are

ignoring the women themselves? We don't discuss clauses we have not

chosen, we have to deal with what is before us, I know you want to stay

an order, not the ones that have been o mid. Thank you Mr Deputy

Speaker. I am happy for the guidance you have given me. I wanted to put

on the record we have missed the opportunity today and I hope and I

know we will have the opportunity to raise this issue again, so I will

skip on from making any further reference to these two issues. We

believe the we need to build on new opportunities such as autoenrolment.

By giving pensions thoughtful time and consideration can the Government

get this right. With I alarm bells ringing over injustices facing it

and concerned we could see a hike in state pension age, the contemplation

that the triple lock would be reviewed is deeply troubling. We

know, if I may say so by delivering an independent Scotland we can

deliver the dignity in retirement our Marine Le Pennioners would need.

Amendment five would mean the financial sustainlet must be taken

into account, when assessing a master trust scheme's financial

sustainability. The ABI have told us insurance companies hold a

significant amount of capital under the European regulatory framework.

Our view, it would not be reasonable not nor is it necessary for insurers

to hold separate or additional capital on top of this in order to

meet their new obligation as trust providers under the bill. We would

like to hear assurances from the Government that insurers will be

exempt if they adhere to requirements. As far as amendment

six and seven are concerned. 6 allowings for exceptions to the

requirement for scheme funders... For which it is a scheme funder.

Amendment seven makes provision for the Secretary of State to define

restrictive activity by regulation including a list of actives

restricted to minimise the loss of master trust scheme funders.

These amendments a knowledge there must be circumstances where the

scheme funder requirements within the bill should not apply. The --

already restricted by virtue of the existing regulation, the ABI have

said in particular the proden shall regulation authority riles mean

activity of the scheme funder not directly related to master trust

fund are not threatened. The ABI have said this is sensible and a

pragmatic approach. It would be useful to understand what a

requirement will need backbench met for firms fob exempt from the scheme

funder requirement. It would be helpful to gain assurance that the

Government is committed to working with the industry. As far as

amendment eight and nine, they provide the regulator with an

alternative to stopping payment to the scheme under sub section B of a

pause order. Nine is consequential to 8678 the bill created a new power

enabling the regulator to make a pause order requiring activety to be

paused once a trust has experienced a triggering event. This includes

accepting new members making payments, accepting contribution and

discharging benefit. We accept the impact as there is no mechanism

plays on outgoing contribution to be collected and held on behalf of the

save. We would contend this is unacceptable a member be penalised

through no fought of their own and in effect lose wages in the form of

employer contributions due to events out with their control. The society

of pension professionals have said it will be necessary to ensure that

the period of effect of a pause order cannot start before the

trustees receive notification of the pause order. This would then mean

that any controversial order could only occur after the trustees are in

receipt of the order. Without this, the they argue that the trustees

could be in breach of a pause order through no fault of that own. If a

direction is not complied with during the period between one, the

date the regulator makes the order and two, the date they notify the

trustees of it. For example, if new members joined the scheme in that

period, contrary to direction under clause 32 five A. The Government

should clarify if the intent to take action to protect savers now were

disappointed at amendments were defeated at earlier stages. Mr

Deputy Speaker, I look forward tore happening the minister respond, we

have sought to work with the Government in hand with the bill we

have in front of us today that we broadly welcome. We affirm or

position of working with the Government to create an environment

where workers can with have faith and trust. We should have a desire

to develop the landscape for pension savings and to achieve a situation,

that all pensions from their provision and the state pension

could have dignity and security in retirement.

This bill helps us awe long that road as far as regulation of master

trusts is concerned. There is more to do to enhance autoenrolment and I

look forward to working with the Government to take steps to include

those currently excluding from pension safes, particularly the

self-employed and part-time workers, in closing, while I welcome this

bill today, I also reflect on the necessity of having had to put down

a motion last night, on the issue of frozen pension after the Government

had brought forward a statutory instrument to freeze the pensions of

hundreds of thousands of British pensioners who have been denied

their rites. In pushing this through, the Government have denied

the right to members of this house to debate this matter. I encourage

all honourable members and right honourables to send it and as

believe we can demonstrate broad cross-party support against this

measures the Government will have the grace to bring forward the

debate on this matter, before recess. This EDM has been signed by

members from six parties, including the government. I would encourage

the Government to listen to this matter as part of the process of the

bill today. Thank you. Auto o a youed Thank you very much,

Mr Deputy Speaker. I would like to thank the, well I would like to

thank the honourable members for their amendments. I would like to

say, Mr Deputy Speaker, and I hope all would agree in this House, that

have been following this debate here, and in committee, that the

attitude of the Government has been to oppose all amendments just for

the sake of it. I give honourable members my word that that everything

has been considered. But it's Government's job to consider the

kind of o lobbying from comes from the many oxes that the honourable

member for Stockton North mentioned several times and I have also met

with most of them as I'm sure the honourable member from Ross Skye has

as well but it is the Government's job to weigh up everything and make

a decision. I mention that because I hope all agree that it is the

position that the Government finds itself. But I'm really quite

disappointed that we are, today, really almost exclusively revisiting

exactly the same amendments that we saw at committee and my arguments

remain unchanged. That doesn't mean I'm going to sit down anyhow and

ignore contributions from the previous speaker. I don't think that

would quite be the correct thing to do. The honourable gentleman, feel

free. No, I intend to go through in detail and try and answer some of

the questions which have been actually asked in very good faith

and try and answer them in exactly the same way. This is new clause 1,

as discussed in the other place, extensively discussed on committee

and very much considered by my officials and myself, this, would

require - Prince polyit would require the Secretary of State to

establish - principally it would require...

On the case of t the surface of t it seems a compelling argument. -- on

the face of it, on the surface of t and I must say having met with

Baroness drake and others before the Bill came to this House, considered

it very open mindlessly and I thought of all the points made it

was the most significant. I would also like to place on record, if I

may, Mr Deputy Speaker, that the distributions from the mobile Lords

has been very useful. I make that completely on a cross-party point of

view. Particularly I would like to pay tribute to Baroness Drake, a

person I have met several times to discuss this with, but there are

disagreements, there are honourable disagreements, where the two

positions - and neither are ridiculous positions, all would

agree but in the end the Government has to decide and that's why I'm not

able to give the Opposition the comfort it expects or is asking for

on this. I would like to state very clearly that the whole purpose of

this regime, introduced by this Bill is intended to mitigate the very

risk that the honourable gentleman is concerned about and he is

honourably concerned about because it is a concern and very cliches

have been used in different opportunities in these Bills and as

this Bill has gone through, usually involving nuts and sledge Hammers

and other such matters but I would prefer, if I may, Mr Deputy Speaker

to say it is a question of being proportionate or not being

disproportionate. And I think that really summarises it up. Because the

master trust, because before it is actually authorised in the first

place, Mr Deputy Speaker, it has to have a regime, where the pensions

regulator has to be convinced that it thoos meet costs of triggering

events. Remember, Mr Deputy Speaker, as I'm sure you do, that this is not

involving the pensions money, this is involving the scheme, the actual

organisations that'p running the funds, so the pensions regulator has

to ensure that the organisers of the trust has sufficient cost of

triggering the event and therefore, should it fail, they have the money

to transport it out to another scheme. The regulator will monitor

this situation on an ongoing basis to ensure the funds remain

available. Currently, it is very interesting, in the markets, Mr

Deputy Speaker, the market is responding well to deal with

existing master trusts that wish to exit before authorisation. It is

interesting that the regulation itself, the threat of what will an

act, the threat of this bill, is making smaller masser trusts

consider whether they wish to be in this new world, this new regulated

world and several master trusts have left the market already in an order

fashion. The regulator is confident that there are currently none that

could not afford to transfer out members. I feel that's a very

important point. And I do hope the honourable gentleman from Stockton

North will take that into consideration when deciding whether

to press this amendment. We're working with the regulator on

non-legislative measures to address concerns of potential liabilities

and trustees of receiving schemes that might arise if a master trust

should end up in wind-up and honourable members should be aware

that we do have this system of regulation to make sure precisely

that this doesn't happen. Interestingly enough I'm afraid I'm

taking, in a ditch way a survey that I believe the honourable gentleman

from Stockton North mentioned in committee from Pension Professional.

They found 50% of those surveyed said they did not want a scheme of

last resort as opposed to the 31% of who said they did. It's very

interesting, the honourable gentleman mentioned in his speech

the Standard Life's view. I accept the fact that it is the view of

industry players that they would much rather help the Government step

in and deal with it. That's very natural. #3r0b8 if I was in their

position, I would. But we have also spoken toins stugss, people involved

in inrollment and people involved in master trusts, etc and my impression

is clearly there's plenty of players who would bite the hand off nigh

schemes that they could get hold off because from their point of view

they are making on members, which would involve them in very little

costs because there are already running the schemes and they have

the set up and everything else. I would say quite clearly that they

seem to be desperate to take on these schemes, I give way.

The minister is taking great comfort from the existing measures that are

in place but there is still no 100% guarantee that there'll be somebody

to pick up the costs of in the event of a trust failure. We could see a

new trust go through authorisation process and it could still fail

through bad management, fraud, whatever. Who is going to pick up

the pieces in that situation? Mr Deputy Speaker, we have to deal with

the reality of the situation and that is not happening. Yes, anything

can happen. We all know in life things happen. This Parliament deals

with things that happen all the time that no-one could possibly expect

the day before. I'm convinced, as the minister for pensions, that the

regulation that's taking place, the view of the industry that the

regulator takes, that we have had regular views, with, and speaking to

the type of institutions that with willingly take on failing master

trusts that there is no need for the Secretary of State to have, in his

desk drawer armoury, the money or the weapons to deal with it This is

a problem that really does not exist. And the honourable member

says it's all left to chance. Well, it isn't left to chance. We've got a

finite number of master trusts that exist now. We know - well, thanks to

the support of the Government and the Opposition and general support

of this Bill, that this Bill will be enacted I hope as quickly as

possible. So it is a finite open. It is not the contingent liability that

will happen in years to come. We know hopefully in two years, it is a

clear regulatory system in place and the regulator is clear about what

trusts do exist. So we have all taken really quite a lot of care it

make sure that this is not going to happen and I do feel that the

measures suggested in this amendment are totally disproportionate to the

problem and for those reasons, I would ask the honourable member to

withdraw his amendment, which I don't think he will, but I do ask

him. A little honesty from the despatch

box I'm very pleased to see at least I have served to amuse the

Opposition front bench on this case. But if I may turn to new clauses 2,

3 and 4 which are in the honourable gentleman' from Stockton North's

name to do with engagement and during committee and in

conversations on and off the record involving everyone who is concerned,

I have made it clear - which I'm sure you would expect, that member

engagement is important and that members should be encouraged to

develop a strong sense of ownership in their pension saving but I do,

howover, remain of the view that these amendments are unnecessary. --

however. And I know the honourable gentleman is expecting me to say

this because these are points that we have, we have discussed before. I

would like to - I think my main rebuttal point would be to remind

the honourable gentleman that - to remind the honourable gentleman that

the majority of master trusts are subject to the rules on trustees in

the regulation of governments and those regulations require that the

schemes must have at least three trustees and the majority have to be

independent to provide service to the scheme. There must be an open

and transparent appointment process for recruiting independent trustees,

I agree but current arrangements ensure members have access to

appropriate information to make decisions about their pension

scheme. These include a mandatory annual benefit statement. For most

members a statutory money purchase illustration. That gives the members

a projection of their pension in retirement and what the honourable

gentleman says on request, he says it should be be on request but it is

available the trustee's annual report, the chair statement and the

statement of investment principles and the pensions regulator provides

guidance on trusteesees for communicating effectively and

transparently with their members. I would remind members in the House

that all trustees have these fiduciary duties. And other legal

requirements. Some master trusts are developing innovative ways for

engaging with members without overly prescriptive statutory requirements,

many of which I would like to say respectfully are of a general era,

than holding general meetings where people are expected to travel all

over the country and things like that. I would like to, very quickly,

discuss the points made about the auto inrollment review. If I may sum

prize by saying the purpose of the review -- summarise by saying the

purpose of the review is to discuss the points brought up by the

honourable member. We are looking very extensively about self-employed

people being included in it, by people of lower income. He mention

careers and I would like to point out that all careers now who are

employed are exactly the same as other people who are employed if

they fit into the criteria, they won't be. I wouldn't exclude at

looking at everything out. But it is a broad review, it is far, far braid

than it has to be as far as the law is concerned. If I may refer briefly

to the already honourable member's nements new clause 6 where he wants

to introduce a power to cap exit charges. We have said, as I have

said before, the power already exists because we are shed lating

the pensions act 2014, as amended by clause 41 of this bill and where by

existing powers the regulations are there to cap or ban early exit

charges in occupational schemes, including master trusts. And

existing members members of occupation schemes, of course are

eligible to the pension freedom if they have their charges capped at a

maximum of 1%. I do not think it is fair to exclude all charges because

the fact is that there are cost involved with exit. The new clauses

7 I, 8 and 9 introduced very eloquently, as ever, by the

honourable member from Rosses is Skye, they are seeking to make

changes in the provisions of the pension act which addressed the

issue of employer debt and defined benefit scheme. As he said, I've met

with representatives fted Plummers UK scheme and I have met with

stakeholders generally, employers and polies and I would like it make

it very clear that the issues raised on the green paper in sustainability

in our defined benefit pension schemes, there is a round table

represented from the relevant schemes to look at precisely what

changes to legislation may be needed. And it is a complex and

technical problem and there is no perfect solution because each

involves one of three parties taking responsibility for the debt.

The retired ones or the PPF. Each of have has its own problem, I do give

the honourable gentleman my work. I would like to congratulate him and

the work his colleagues have his party have done, it is not on deaf

airs and we will make progress on it. I trust the honourable member

will in fact withdraw those amendments. The new clause.

The honourable member for Stockton North, we have dealt with in

committee, the minimum requirement for annual reporting of

administration, etc, it is just something that we will have agree to

disagree on. We are committed to making regulations requiring

informational charges and trap axion costs to be provided to members in

the course of this Parliament. We will consult this year on the

publication of such information to members, the only consultation is

how, and not if in concerning disclosure, I also have read the

financial conduct's authority asset management market study. Sometimes

think the honourable member and I are the only people who have read it

in full detail, I am fully commend it. I have told the FCA and we it

will -- fully fwend to take action o on that. The Government processes

the necessary primary power and it is swell on its way to achieve the

stated purposement for that I would urge the honourable member to

withdraw his amendment. On scheme funder requirement, I will deal with

next. I have listened very carefully to that, he adds to the requirement

we put down in clause eight, that the mastertrust scheme has

sufficient financial resources for the scheme funder, but it is not

required, as the regulators assessment must take into account

matters specified in regulations which include insolvency risk,

enforceability of any funding commitped and whether the scheme

funder is subject to capital requirement. I do not believe we

need to expand the range of activity beyond that, because amendment six

and seven would expand it so that, it would expand the range of

activity that a scheme funder can undertake.

The Government's amendment we put four wad at committee mean that the

scheme funders no longer restricted solely to these activity related to

the mastertrust and I would remind him, as he has mentioned the ABI,

they welcome the cross-party consensus that needs to address the

issue and the common-sense approach the Government has taken to reflect

its concerns, in short, these amendments are not needed and I urge