22/01/2018 House of Commons

worked with developers and local

authorities about.

Order. Urgent

question. Debbie Abrahams.

To ask

the Secretary of State for Work and

Pensions if she will make a

statement on the government's plans

to stop private sector pension

abuse.

The Secretary of State.

Thank

you, Mr speaker. The vast majority

of employers do the right thing by

their pension schemes and members

can expect to receive the pension

benefits they have paid for

throughout their working lives. The

pensions regulator and protection

fund was set up in 2004 to provide

pension scheme members with the

safety net to make sure that their

pension benefits received some

reduction when things go wrong and

it is a fact that some businesses

will file. This pension protection

fund has been supported or a

cross-party basis since 2004 -- will

fail. The pension protection

a range of powers have been given,

including where boys have failed to

take account of the skin, are around

6000 defined benefit schemes --

it is the responsibility of the

regulator to strike a balance

between protecting members, PPF levy

payers and minimising any adverse

affects on sustainable employers

businesses when it comes to the

regulation of defined benefit

funding. The regulator doesn't have

the power to stop businesses paying

out thousands as bonuses or evidence

to shareholders, but where there is

a situation where they think the

scheme is not being treated fairly

the regulator will investigate to

see whether use of its powers is

appropriate. But this government is

clear that we are sponsoring

employers and where they are able to

meet their promises they should and

must do so, and that is why we has

adjusted ways that the current

scheme can be strengthened to enable

the regulator to be more proactive,

and in February we published our

green paper, security and stability

of defined pension schemes, which

could strengthen the pension powers

of the regulator by introducing

fines for actions which harm a

pension scheme and we also set out

powers to enhance the regulator 's

ability to make effective governance

and spot issues before damage is

done. The manifesto in June 2017

reaffirmed this intent by proposing

to give the regulator the power to

impose a putative fine alongside a

contribution notice, and the details

of the fine would be worked through

with all the relevant stakeholders

but it would represent a significant

strengthening of the deterrent. We

also intend to make corporate

transactions, some of them, subject

to clearance, but we must take care

to make sure that these measures do

not have an adverse affect on the

legitimate business activity and the

wider economy. We have received a

hundred plus answers -- 800

responses to the Green paper and

these are being looked at, the White

Paper will be published in the

spring. We need a pond flow of

information between parties

concerned and compliance with the

regulations -- a fast flow of

information.

It remains the case that the

government supports free markets and

enterprise and businesses but this

has to be conducted responsibly.

Yesterday the Prime Minister chose

to announce through the media in

part response to the collapse of

Carillion that the government plans

to introduce tough new rules to stop

private sector pension abuse and

Carillion had 13 defined pension

schemes with 28,000 members plus and

the combined pensions deficit of

£587 million. Between the end of

2015 and last year's interim results

the difference between their assets

and liabilities almost doubled. We

know profit warnings started to be

issued in the summer of 2017. Given

the severity of the financial

problems facing Carillion, why

didn't the government acts then

rather than attempting to close the

stable door after the horse has

bolted? We had been arguing for

years for the government to take

better action to protect people's

pensions and the government have the

opportunity to act in 2013 and again

in 2015 by supporting the memos from

Labour -- amendments. More recently

the select committee warned the

government on both the need for

protection is and more powers for

the regulator, and although we

welcome the Green paper, the urgency

has not been there, so why did the

minister ignored these warnings were

dropped the committee made a number

recommendation stash ignored these

warnings?

... New powers to impose fines at a

level which would deter

irresponsible behaviour, so why did

the government refused to implement

these recommendations at the time?

If the government ready to commit to

these fully? If they had taken

action the massive debt accrued by

Carillion might have been avoided,

but given the scale of the

liabilities what does this mean for

the adequacy of the pension

protection fund? The collapse of

kisses has led to a rise in pension

scammers targeting those with

pension pot stash the collapse of

Carillion. Will she be investigating

the backdrop to these schemes who

are simultaneously betting against

their employer question what can the

minister advised the house what

measures will be proposed in the

White Paper and when exactly will

they be brought to the house?

As

both sides of the house no, the

regulator is an independent

arm's-length body and it was set up

after much discussion in 2004, and

how it is best to work and support

the pensioners when it needs their

help, but what it never did is

interfere with the runnings of the

business. That is what was decided.

From there we have said we need to

make sure that if we need to go

further weakening, and that is why

we set about bringing forward a

green paper looking at where it was

best to intervene, we have had 800

responses on that to make sure we

get the balance right, because we

don't want to tip the edge and

unnecessarily cause harm to a

business, and we talk about profit

warnings, what they mean is, a

company is not going to get the

profit is expecting, no more than

that. We have to make sure that the

government does not precipitate

anything that could be seen as

negative from the business and that

is why we are taking all of these

800 responses and the King at them

carefully, how to make sure we

protect those people employed as a

company, protect the pension --

looking at them carefully. And how

we can go forward in a conducive and

careful manner, and the White Paper

will be coming forward later on this

year.

Mr Bernard Jenkin.

Can I draw

your attention to the fact of how

the British public are reacting to

this because they are seriously

repelled by the notion that

executive directors and even

ex-directors should carry on drawing

large payments at the same time as

there is a mounting pension deficit,

if this is what capitalism was

really like people would not want

it, so what is the government is

going to do to draw the attention of

businesses and to executive

directors for their government

responsibilities in these situations

in the future? Although this is

nothing as bad as the Maxwell

scandal.

I agree with my right honourable

friend. This is about strengthen

corporate governance of

organisations and giving power to

the board room, giving shareholders

responsibility, this is about having

responsible businesses doing the

right thing and where we can ensure

that happens, where we can look into

investigating what's... Is going

wrong should things be going wrong,

that is right. But as I said, most

businesses, the vast majority of

businesses, there are over 6,000 in

defined schemes, are doing the right

thing. Where it is not, it is right

that there is fury from the public

to make sure that they're doing the

right thing. That is wloo I the

Insolvency Services do

investigations and get money back

where they can.

Thank you for

granting this and congratulate the

member for securing it. We are talk

Ake private sector pensions again

highlights the need to address the

pension industry, something which

the SNP has been calling for years.

The BHS deficit scheme was in

deficit. The Carillion is £900

million in the red. And there are

schemes in deficit to the tune of

£900 million. A ticking time bomb.

The issue is while Executives make

bad decision and are rewarded, 11

million people who rely on a final

salary pension could be at risk of

having the rug pulled from under

their feet. The SNP has long called

for the establishment of an

independent pensions commission to

ensure that employees' savings are

protected and a more constructive

approach is considered. Will the UK

government make sure the regulator

is tasked with the authority to step

in and protect savers and pensioners

before cases like that of BHS or

Carillion happen again.

Well the

Pension Protection Fund is there to

do just that to support the

pensioners and they do step in and

support them where necessary. You're

right, where businesses have not

worked responsibly, we should be

getting involved and we did do that

when we saw the condition with the

British... Home stores. What

happened there, anti-avoidance

enforcement did take place and money

was gone back and we didn't have to

use the PPF fund and a prosecution

did take place. All the instances

have been different. But you're

right where there has been an abuse

of the system, we with do an

investigation and bring those people

to account.

Thank you Mr Speaker,

can my honourable friend say what

action she is taking in working with

the Secretary of State of business

to look at the conduct of the

directors of Carillion in this

particular case. And specifically

following on from my honourable

friend's... Sorry point... What can

be done now to recover any of that

money for the people affected? ?

I

would like to thank my honourable

friend. An investigation is going

on, not only one which has been

initialiate initiate by the

minister, but the Insolvency Service

will investigate and if there is

evidence that things have been done

untoward, a prosecution will follow.

That is what we are about. We want

businesses to act responsibly. They

employ the majority of people in

this country, so it is only right we

support them when they need their

support and also bring them to

account when they doing things

wrong.

Thank you, welcome the

honourable lady back to this

department. The Government is

responsible for the regulatory

framework for pensions, can she

respond to the point my honourable

friend raised about defined

contribution schemes. Is the

Government looking at possible

changes to the rules for defined

contribution schemes as well as

defined schemes?

At the moment, we

are not looking at rules to change

to defined contribution, because

they're in a very different type of

pension, one a contribution has been

made and therefore that will be

protected and moved across to

another pension whereas the defined

benefit scheme is what somebody was

expecting at the end and therefore

is protected and so they're

different and different rules for

both of them.

Can my honourable

friend confirm that constituents who

have an existing Carillion pension

will receive 100% recovery.

I can

state that is the case. If anybody

is concerned, about their pension,

then they should call the hotline

which is free and it is 08007561012.

Thank you. The Secretary of State

does not seem to have grasped that

the decision to carry on paying

dividends and to boost the bonuses

of the board, while running up the

pensions deficit were taken by the

board. So what is she going to do to

stop this happening in future?

I

want to thank the member. I do

understand the gravity of what

happened there. But what we never

seek to do in this House and hence

in 2004 after much discussion we

gave to it an arm's length body.

Where misdemeanours, have things

have gone wrong, investigations are

under way, because we are not the

investigator, we put the legislation

in place to make sure those people

will be brought to account and if

they have done something wrong, by

goodness we need to bring them to

account.

I have a number of

constituents affected by the

situation with Carillion. Can she

first set out what the Pension

Protection Fund will do to support

my constituents who have been

affected and have pensions through

Carillion and can she say what more

that the Government is going to do

to make sure that people who have

private pensions can be confident

going forward that it is the right

thing to do to invest their savings

in the future in a company pension

fund?

I would like to thank my

honourable friend and reassure him

that the Pension Protection Fund is

there to provide this lifeboat and

this support. People have got a

pension at the moment, it will be

100% support. Those coming forward

it is will be 90% with a cap. That

is what we are here to do. To

protect the people who have done the

right thing, people who are saving

up for their future, to look after

them in a responsible way and for

people who have done the wrong

thing, have the right leg lacings

lacings regulations.

A company was

is responsible for the pension while

betting against the company on the

stock market. Can we ensure this

conflict of interest does not happen

again?

I thank the member, what we

will be looking to do from the

advice that we have got from these

800 responses when weapon put out

our green paper is find from those

who know the area best what they

believe is the best way to tackle

this. We don't want to see matters

like this happen again.

What impact

would re-nationalisation have on the

funds

Be an absolute disaster.

My

constituent a retired employee of

Barclays has raised concerns about

the future of their pension fund

with a £7 billion short fall,

Barclays moving their liability to

the investment bank to avoid

covering the deficit?

What we will

do for people concerned about their

pensions it is take advice from the

Pensions Advisory Service. That is

the best place for this. And the

regulator will be looking into any

instances they think need to have,

to be investigated.

I welcome the

Government's commitment to do more

to protect pensions of private

sector workers. Will the Secretary

of State join with me in agreeing

that it is necessary that we have

private sector providers of public

services a and the Government should

continue to support them?

Thank you

very much indeed. Of course, it is

important we have the private sector

delivering an array of services,

because as the world gettings more

complicated and more specific we

need more people with these specific

skills to go forward and do that.

That is the best way to have... A

well-functioning country.

Thank you.

The creation of the British Steel

pension scheme market two created

fertile territory for unscrupulous

pension advisors to swoop in like

vultures and exploit vulnerable

people what. Lessons have been

learned from the British Steel

pension scheme experience and what

will the Secretary of State do to

see we don't see this tale leading

to the privatisation of profit and

the socialisation of risk?

What we

have learned from that and

straightaway was done, eight

companies were banned from what they

have done in any kind of pension

scam. What we are also doing that we

will talk about after is how we will

bring together advice into a single

body, so people are well aware of

what they can do and what they

should be doing and have they done

the right checks to make sure who

they're going to be dealing with is

a positive body and organisation for

their pensions.

Thank you Mr

Speaker, workers have been

encouraged to take part in buying

that are pension and they need to

have confidence in that scheme. My

My right honourable friend mention

that fat cats are seen to have no

risk. What more can we have to have

more transparency about how private

pensions are working and reassurance

that those affected have the best

information they can so they're not

sold short while others float above

the risk.

My honourable friend

raises a key point, there does need

to be transparency. This is

something you have invested in all

your life. And as I say, going

forward wur with our white paper it

must be what is best practice and

stronger corporate governance within

these organisations.

I would thank

you Mr Speaker for granting an

urgent question on this issue. I

would like to welcome the minister

back to her old post. But my

question is, is the Secretary of

State aware that under current rules

pension obligations are unsecured,

meaning that insolvent companies

only fund their schemes once they

have compensated their over

supposedly more important creditors.

If employees are given a higher

priority in future.

That is key -

where do they fit in the line of

creditors? Are people being given

the correct protection and that is

why the Pension Protection Fund was

brought in and that is something

that needs to be brought forward

going forward.

The whole subject of

pensions is complex. In the context

of providing advice for those

looking for a pension or have

pensions, what action will the

Government take to ensure the better

delivery of financial and debt

advice?

Actually, the bill coming

forward straight after that, after

this will be talking about the

advice that people can get. The

support they can get. The

understanding, the options that are

on the table. Because that is what

is I think very a very positive move

to have people to have understanding

of their finances and have assurance

it will come back in a good pension.

Further to my my honourable friend's

question, and in light of the board

members at Carillion who rewarded

themselves with bonuses at the same

time as allowing that pension

deficit to grow, does the Secretary

of State not feel that she needs

additional powers to bring to

account these executives? And the

core porate greed and

irresponsibility of the behaviour

like that at Carillion?

I thank the

honourable lady. At the moment,

there is an assessment of the

situation going on. There is also an

investigation going on as to what

happened and should the regulator

need it, they already have powers to

look at it, into anti-avoidance

measures. That might be able to be

used going forward, precisibly what

the honourable lady talks about,

strengthening the hand of the

regulator is what we will be

bringing forward in the White Paper

and was in our manifesto.

All members are focusing on eyes,

understandably, but you should also

look closely at the powers available

to pension trustees -- focusing on

Carillion.

I will indeed do that, it

is a friend who knows a lot about

these matters and we will be taking

advice like that and all of the

other 800 responses into coming up

with our solution to these matters.

Over the last 30 years from time to

time we have been back here under

successive governments and we get

promises you will strengthen the

rules on pension schemes but nothing

happens and Carillion will have a

major impact in the West Midlands,

when we going to get tough on these

directors with tough legislation? We

need to do something positive.

The

honourable member is right, people

are looking for ways in which we can

bring those who have not acted

scrupulously to account and there

has been measures that the

regulators have had and they have

proved successful. We had the

prosecution of BHS and we

recuperated £363 million but we have

got to adapt to the situations as

they come forward as well as

pre-empting things that are

happening because none of these

cases spoken about have resulted or

started from the same action, but

you are right, we have got to make

sure that unscrupulous business able

are brought to account because we do

need good business and we do need

good private business.

Rebecca

Powell.

I would like to applaud the

Prime Minister's call for tougher

action on executives who put

pensions at risk. We want private

pensions to be secure and

sustainable because we have

encouraged people to take them out.

Would my friend give assurances that

the government is taking this very

seriously and they can put their

minds at rest and soon?

The

honourable lady is right to raise

this issue. People watching at home,

people who are thinking of investing

in a pension or have a pension want

to know they are safe and they also

want to know what is the government

doing to make sure going forward

they are safe and that is exactly

what we are doing with the White

Paper, by reinforcing and also

making tougher corporate governance

measures, that is what that is about

and that is what we intend to do.

Alan Brown.

Thank you. Carillion

owed millions of pounds to

subcontractors and is inevitable

there will be other problems for

other businesses. It is unfair,

because the PPF refuses to act as

guarantor of last resort in

multi-employer schemes so when will

the government and this is another

may -- end this anomaly?

I'm aware

that this was debated with the

minister for pensions ten days ago

and they are looking specifically at

the points you raised. Clearly the

honourable member is raising these

points now and you are fighting a

good cause and I'm sure we will be

able to come up with a solution.

The

best form of pension protection

anyone can have is a sustainable

employer and whilst TBR has wide

powers they are rarely used and it

is often a bit toothless. Is the

Secretary of State satisfied that

any new powers will be backed by

proper resources?

It is always vital

that if you are going to bring

something forward it has to be

workable and it has to have strong

and secure footing to be able to

afford them, so that is one of the

points that we are looking at as we

review, how to bring forward

stronger legislation.

As a part of

the Tata Steel group merger, workers

faced slashing their pension funds

if they joined the PFP or joined a

new scheme with reduced benefits and

this led to a feeding frenzy of

mis-selling, does she think that the

steelworkers of Wales were treated

fairly?

What we have got to make

sure we do is look after the people

who have the pension and what we

have also got to make sure is that

we keep the company going as a

viable concern. At the time that was

deemed as the best way going forward

but we have got to make sure it is

always the best solution that is

there at the time and also secure

future legislation to make sure we

have better regulation and law in

place.

Nigel Havers.

This weekend I saw some commentators

who ought to know better, say things

like Carillion employees risk losing

their pension, what British to --

what percentage of their pension can

bake expect to get? -- candidate

those in receipt of a pension, that

is 100%, those in receipt in the

future, that is 90%, subject to a

cap, so please rest assured if you

are concerned about your pension

and

you can always come forward and go

to our free helpline.

May I welcome

the Secretary of State to her new

position and thank the reassurances

she has given the house. GKN employs

340 people in Telford and is subject

of a proposed hostile takeover, will

the minister confirmed that the

safety of pensions will be a

priority for her department in the

event that the takeover proceeds?

It

is a matter for the pensions

regulator but clearly we have the

regulator in place and we have the

pension protection fund implies an

clearly that is what we will be

looking at to make sure that

pensioners are safe and protected --

pension but action fund in place.

How is it that some of these pension

deficits are allowed to get so large

before action is taken?

Thank you

for the question. We allow

businesses to run their business

without interfering and therefore we

don't know the complete structure of

their profit and loss and their

assets and liabilities but what we

do have, should anybody wish to

bring a concern about their

business, they are free to do so, to

a regulator, and going forward with

the combined corporate governance

review that we are doing and also

the new legislation, we will make

sure pensions are on as firm a

footing as possible and make sure

that such abuses do not happen.

I'm

sure the Secretary of State will

agree that the recent prosecution of

Dominic Chappell should put

directors who are taking dangers

with employees pensions, on alert of

the dangers they could face, but

will she agree with me that we could

go further in attaching personal

responsibility to those who make

disastrous as Asians?

-- to those who make disastrous

decisions?

That is exactly what we

will be doing, how do we empower the

regulator and how do we allow them

to make finds going forward but this

needs to be a balanced response and

not a knee jerk response and we need

to make sure it works for pensioners

and businesses going forward.

When a

major UK business collapses it is

very important that the existing and

future pensions are given

reassurance about their situation,

and in the case of BHS this has

elected to constitute a joint select

committee to look at aspects of the

pension, so could a joint select

committee would be welcomed to look

into Carillion, and in terms of the

pensioners, existing pensioners

would get 100% of what is going to

go to them through the pension but

action fund and future pensioners,

90% -- pension protection fund. The

PPF is very capable of looking after

the worst case and are rare.

My

honourable friend has a lot of

experience in this matter and is

right in saying that the PPF is

robust and has got a lot of

resources so these people are safe

and they will be protected and that

is what they need to know now. The

government has clearly, from the

moment this happen, set out the

support for pensioners to know their

pensions were safe and also to go to

work, they were being looked after,

but you are quite right, we have to

make sure going forward we are doing

the right thing.

Point of order.

On

Friday, the Secretary of State for

Justice and Lord Chancellor came to

my constituency and attended a

meeting in Redbridge Townhall in

Ilford. The first I knew about this

is the website of the Ilford

recorder today, where the Secretary

of State has given an extensive

interview talking about policing and

crime and youth crime and other

issues relied -- relating to my

borough, he did not have the

courtesy to inform me and he did not

inform the leader of the council or

anybody else in Redbridge, except a

few selected councillors that he was

coming to my constituency. I have

informed the member to the answering

machine at his House of Commons

office, I tried five numbers at the

department of justice, but all of

them were unobtainable including the

public number given to me by the

House of Commons library. At least I

had the courtesy to inform him I was

facing this point of order but I

seek your advice Mr speaker, given

that ministers will be coming to

constituencies quite actively in the

coming months, can we have it made

clear that they should at least

inform the members of the

constituencies that they are going

to visit.

I'm grateful your advance

courtesy, and as the house has

learned, the honourable gentleman

has given as a detailed description

of the prodigious efforts that he

made to contact the Lord Chancellor

and the sedentary of State for

justice, even if they were to no

avail. I thank him for giving me

notice of the point of order, and as

I have said on many occasions, it is

a strong convention albeit not a

rule that members should give

reasonable notice to a member whose

constituency he or she is intending

to visit in a public capacity, of

the factor that prospective visit,

and I regard this as a matter of

courtesy as much as anything else. I

would just say I'm surprised to

learn of this development because I

know the Secretary of State for

Justice and ordinarily he would be

regarded as one of the most

courteous members of the house. I

regard this as a lapsed and it is

regrettable and I hope that it went

happen again. We ought to treat each

other with courtesy and that does

mean giving some advance notice as I

have said.

Point of order.

Point of

order.

Thank you. I seek your

guidance as to whether you have

received notification from the

Secretary of State for Work and

Pensions and whether she will make

an oral statement of personal

independence payments, as you may be

aware on Friday afternoon the

government put out a bit in

statement announcing they would not

appeal the High Court judgment of

2017 -- written statement. In effect

reversing the emergency Pip

regulations they endorsed last gig,

these regulations were brought in

without a vote of this house by

negative statutory incident despite

two urging questions and an

emergency debate and widespread

concern about the impact. I would be

grateful for your guidance on how

members can have the opportunity to

question ministers in detail on this

vitally important policy change

which will affect over 150,000

people, primarily those with mental

health conditions.

I'm grateful for

the point of order, and in short I

have received no notification from

the Secretary of State of an

intention to make a statement on

this matter but as the member will

no the Secretary of State for Work

and Pensions is in her place and

she's welcome to come to the

dispatch box and respond this matter

if she wishes but she is under no

obligation to do so. She doesn't

wish to do so at this time. What I

would say, the lady should table

questions and see where she gets and

if she and her colleagues judge that

they wish to seek a debate on the

matter it is open to them to do so,

but for now I think she has shared

her concern and it will have been

heard on the Treasury bench.

Gapes,

If there are no further points of

order we will proceed to the main

business. The clerk will proceed too

read the orders of the day.

Financial claims bill second

reading.

I call the Secretary of

State for work and pensions Esther

McVeigh.

Thank you. I beg to move

the bill now be read a second time.

The financial guidance and claims

bill reforms the current financial

guidance

Ensuring people can access free

guidance to help them make more

effective financial decision and

improve their confidence in dealing

with financial service providers is

an important step towards improving

people's financial capability. In

addition, ensuring that people are

able to access high quality claims

management services speaks to the

Government's commitment to ensuring

that action is taken when markets

work against consumer interests. The

provision in part one of the bill

followed three consultations on the

provision of pensions and guidance

on debt management. In particular,

the consultations examined the

demand for these services, how they

should be structured and how to make

the provision more effective for

consumers. The consultation revealed

a broad consensus for a single body.

As a result, this bill will bring

together the important work done by

the money advice service, the

Pensions Advisory Service, and

pension-wise. These measures have

received support from industry,

stake holders and from charities and

from consumer groups. I will give

way.

Can I thank the Secretary of

State for giving way. It is vital

that we all work across the parties

on this issue of financial guidance.

Can I encourage her to put in a duty

to promote financial resilience on

this new financial guidance body,

because each year there are two

million people who have unforeseen

sickness absence, they can't cope,

their incomes fall and eight out of

ten people have little if no savings

and I think proactively having a

body to promote that financial

resilience would be a real step

forward.

I want to thank the member.

What he raises an important point

and once this body is set up, it

will be able to see what is needed

out in the public arena and then

shape and craft what it does going

forward. So that is important.

Obviously, debt advice for

vulnerable people is key. They need

to be able to sort of plan a path

for their future. So the member

raises a very good point. I will

indeed.

On that note, household debt

is now at 1.9 trillion, which

highlights how important it is to

give people knowledge on

understanding their finances I would

like to welcome the introduction of

this bill and could she give us

assurances it will help constituents

like mine and you go through a

plethora of bodies to get advice, it

will help them make decisions that

may prevent them getting into debt.

My right honourable friend raises a

good point about how to help those

who are most vulnerable get out of

debt. Debts are at high levels.

Lower than they were in the first

quarter after 2010. The latest

figures in 2017 it had gone down.

However, they're still high and we

need to help people to understand

their finances. That really is key.

Understand what is going out, what

is coming in and how to get their

life on a firmer footing so they can

go forward with confidence. If I

progress a bit further and I will

take interventions. Old mutual

wealth has noted that consolidating

the money advice service, the

pension advice service and

pension-wise into a single body

presents an opportunity to improve

the quality and reach of

government-led primary

industry-funded services to

encourage consumer engagement. They

will ensure that people have access

to the information needed to make

the necessary and effective

financial decisions that we all have

to make throughout our lives. This

information, guidance and in respect

of debt, advice will not only be

independent and impartial, but free

at the point of use. Making it

accessible to all those who need it.

By merging these services into a

single body, we will remove

duplication of services increase the

efficiency of the service and ensure

those who require information,

guidance and advice know where to

find it. A single body also gives us

the opportunity to provide a more

seamless customer journey doing the

joining up and providing a hook back

into the customer for follow up

support. The Government is concerned

about low levels of financial

capability in the UK and we

recognise not enough people know

thousand manage their money. So we

are taking decisive action. I will

give way.

Aim grateful to the

Secretary of State. As she seems to

be acknowledging the evidence

suggests that too many people don't

have sufficient knowledge to make

the best choices about their

pensions. On that basis, does she

adegree that gree it is important

the new body concentrates on try

provide as much face to face support

and does not rely on web-sites?

The

honourable gentleman raises a very

guide point. Different people glean

information through different

channels. So a web-site works for

some. Telephone works for others and

there will be a need for face to

face. At the moment that is being

helped but the Citizen's Advice

bureau. He is right in saying face

to face is important too. OK I will

give way and then proceed further

and then I will come back.

I thank

the honourable lady for giving way.

One of thing big problems with

information for ordinary people is

it is complex. Can she give us an

assurance that any information or

advice that is given is in simple

language that people can understand.

That is the difficulty - a lot of

forms they don't understand.

Again

another valid point there. It has

got to be impartial, free and it has

to be in language that people

understand. And sometimes people

might not feel confident to say they

don't understand the terminology,

because they think there is a

presumed knowledge that there might

not be. The new body will have a

number of statutory objectives to

improve the ability of people too

make informed decisions, to support

the provision of information, money

and pensions guidance and debt

services to. Ensure that information

guidance and debt advice is clear,

cost effective and not dupe Kated

elsewhere. To ensure that

information and advice is available

to those most in need, particularly

people in vulnerable circumstances

and to work closely with the

devolved authorities. The body

will... I will.

I am grateful.

Further to the question asked by the

honourable lady on her own side

about the rise in household debt,

will she accept there is a

particular problem around household

debt generated by high cost, high

credit cost lenders. Such as Bright

House. Under clause 10 of the bill,

the Financial Conduct Authority can

levy to cover the costs of the new

single finance guidance body. Can

she reassure me that high cost

credit companies will be covered by

such a levy and tell the House what

this body will do to encourage the

take up and awareness of the

products offered by credit unions, a

far lower cost form of debt

provision.

First, debt isn't rising,

it has actually fallen, however it

is still high. What this body will

do is give guidance and where needed

advice so people know what...

What... Loans or what credit they

are taking out and fundamentally

what that means to them paying it

back. How the body goes forward

really again here today we are

putting in the legislative framework

so it exists and there are things

that it needs to do. But it will

determine what are the key thins it

wants to pursue with and I'm

convinced those people going forward

will listen to the people like the

member and the advice he is putting

forward. So the body will... I will

proceed a bit further. The body will

also provide advice on a breathing

space scheme, providing support to

the Government's policy development.

The scheme will allow an individual

in problem debt to apply for a

period of protection from further

fees, charges and endorsement

action. Alongside establishing a

statutory debt management plan. One

of the functions of the new body

will be to support over indebted

consumers, ensuring high quality

debt advice that is free. Last year,

money advice service spent £49

million to fund 440,000 debt advice

sessions. We want the new body to

build on that good work. I will give

way.

I'm very grateful to the

minister. Further to the point on

financial resilience, is the

Secretary of State aware that

household debt as a proportion of

income rose under the last

government... From 93% to a peak of

157% in 2008. Doesn't this

demonstrate these measures are

essential to help people make

sensible choices about their

finances?

The honourable gentleman

makes a very good point, that

household debt did rocket under the

previous Labour government and we

are now making sure it comes down.

It is still too high. But what I

particularly appreciate with this

bill it does have cross-party

support, because we all know that we

need to help people who are in debt.

Can I proceed further and I think

I'm... Taking as many interventions

as possible. Will just proceed

further. As a result of a range of

reforms such as automatic enrolment

which has increased the number of

people saving into a pension and

allow anyone that take their whole

pension as a lump sum, the number of

people looking for high quality

impartial financial guide answer

continues to rise. We look forward

to the -- -guidance continues to

rise.

Thank you for giving way. I

would like to return to the question

of the breathing space and ask

whether the minister has considered

it will apply to public sector debts

as well as the private sector debt.

Many people find that they in fact

are pursued more vigorously by those

creditors.

Whilst we are looking at

this respite, we are doing a call

for evidence to see how best to

proceed with that and that will be

one of the points no doubt that that

will be raised in that. I will now

discuss the second part of this

bill. Which makes provision to

strengthen... If we can... If I can

just proceed a little bit further

and then I will take interventions.

Otherwise I will never get get

through this and we need to. I will

now discuss the second part of the

bill which makes provision to

strengthen the regulation of claims

management companies. There is

evidence of malpractice in the form

of disproportionate fees, nuisance

calls and the encouragement of

fraudulent claims. Following a

review of claims management

regulation led by Carol Brady, the

Government announced its commitment

to clamping down on malpractice in

this sector. Part two of the bill

delivers this commit commitment in

two ways. To transfer responsibility

if from the claims management

regulation unit which is based in

the Ministry of Justice to the

Financial Conduct Authority.

Secondly by introducing new measures

to ensure that consumers are

protected from excessive fees. This

includes a duty to make rules

restricting fees charged for

services in relation to financial

services such as PPI claim and the

power of the FCA to introduce caps

in other claims sectors should need,

should it need to arise.

Thank you very much. Can I go back

to the first part of the bill, in

terms of the devolved functions and

debt advice, how would baby funded?

Would it be a percentage share? --

how would they be funded. Would it

be done on a Welsh need? The worst

government will send a bill to the

Treasury?

Thank you very much.

--

the Welsh government for

I also want

to welcome the deputy to the chair.

What is being spent and how it is

being spent is something down to the

new body being formulated. However,

it will be done, by which it will be

government grants and then money

taken back from those, the financial

bodies who are paying into it, but

clearly going forward, where there

is most need is where most money

will be going and that is the way it

will be viewed.

I welcome the second

part of the bill, it improves

productions. Are you aware that the

justice committee looked at this

issue in relation to changes to the

small claims limit to personal

interest, which you bear in mind the

very strong evidence that suggests

because the interest likely in the

small claims limit, impersonal

injuries cases, the cat in relation

to payment protection insurance

should also be extended to personal

injuries cases to extend consumer

protection and also consider a fit

and proper person's test in relation

to this area?

You always provide

wise words and I can assure you that

those matters will be taken going

forward. Mr speaker, Deputy Speaker,

this is not to say that claims

management companies should be

regulated out of existence and the

government believes these firms

provide a valuable service to

consumers who may be less likely not

able to bring claims themselves and

a well functioning CMC market can

also benefit the public interest by

acting as a check and balance on

business conduct. The measures aim

to strengthen claims management

regulation in the round in order to

enhance consumer protection and

professionalism in the sector, and

the bill also makes sure that those

who use claims management services

to make claims in relation to PPI

are protected in the interim period

before the FCA exercises its duty to

introduce a fee cap and it does this

to the provision of an interim fee

cap on PPI claims management

services during the period between

ascent and implementation of the FCA

cap, and the bill will cap these

fees at 20% of the final

compensation amount. The ABI

welcomed the claims regulation

measurement stating that

confirmation of tougher regulation

cannot come soon enough for the

people who are plagued by

unsolicited calls and text messages,

I will give way.

One thing the bill

was silent on until amended by the

opposition in the other place was

cold calling, the opposition had

been pressing since the last bill

seven years ago to have cold calling

outlawed and wondering why the

minister isn't going to say anything

about that or will she agree there

is no defence for something which is

a blight on almost everyone's lives

in this country.

There will be a ban

on pension cold calling and then it

is working through the detail of how

that works best for consumers at

home for the if I can continue a bit

further and then I will take a

question. I will reflect on the

question in the Lords, there was a

bottle support for the measures

contained in the bill, and they

tried to include a government

manifesto commitment. Some

amendments made explicit on the face

of the bill what was always the

implicit in policy, these include

making clear that the single

financial guidance body services are

free at the point of use and making

sure that the information advice and

guidance is in partial. Other

changes were more substantial but

nonetheless welcome and these range

from the inclusion of a clause which

will make it a criminal offence to

impersonate the body, safeguarding

clauses for its wind-up and

requirement for the FCA to create

rules on signposting individuals to

the body, and further additions

include the interim fee cap for PPI

claimants which would make sure the

charge is fair and proportionate

relating to financial services. And

making provision for the

establishment of a debt respite

scheme which I would expand upon

shortly. Did the honourable

member...

Thank you for allowing me

to raise a point. I wondered if she

had my concern about the intention

of UK Government to adopt the

provisions in my ten minute rule

built on unsolicited communications

marketing for the government has had

occasion is to adopt this

legislation but the deadline passed

for top I wonder if the Secretary of

State is concerned that this will be

confined to protecting consumers

regarding pensions but not right

across the marketplace in a host of

areas.

We are looking at pensions

today but there are other rules and

regulations and laws in place to

protect people from unsolicited and

unwanted cold calls and at the

moment the Digital culture is

looking at how to strengthen those.

I would now like to address some of

these issues... I will briefly give

way to the honourable lady first and

then I will continue with the second

reading.

Thank you very much. I

listened very closely to what you

said about breathing space which is

a very welcome period to help

individuals and you mentioned

individuals, sort out their debts

without getting into more problems,

could you confirm that that covers

households and families in

particular to help the whole family

and not just the individual?

When

people call up seeking advice and

support, it could be for them, it

could be for their household, they

might need respite for all of them,

and they will be looking in therapy

not just at themselves but at their

family in its entirety -- looking in

variability.

I'm grateful to you and

may I welcome her to her position as

well. I was involved in trying to

stamp down on cold calling as the

former minister telecoms and it may

not be this Richard Bland cold

calling entirely but on -- it may

not be necessary to ban cold calling

entirely but I hope the Secretary of

State will comment on the need to

make it expressive that the new

regulator mask consult with Ofcom on

some of these issues -- must consult

for the women introduce what are

consumer friendly measures, -- we

must remember when we introduce what

are consumer friendly measures, it

might mean that some of the less

scribblers up their game when it

comes to cold calling. -- scrupulous

no one knows more about this

subject

than him and I'm glad this is on the

record and these other things we

need to consult on to make sure that

we get the new regulation right. I

will give way and then I will

proceed.

Thank you. On the question

of cold calling raised by my right

honourable friend, I noticed the

cold calling provisions appear in

part one of the bill in clause four

and I was wondering if the Secretary

of State could verify whether those

powers allowing cold calling to be

prohibited apply just in relation to

financial guidance or also in

relation to claims management

companies, the topic of the second

part of the bill, and I'm hoping the

answer is yes.

Yes, that will be

what we are doing, that will be our

intention, but again these are the

final points it have to be worked

out by the body as it comes forward

in what it intends to do to work

responsibly on behalf of the

citizens of the UK. I look like to

address some of the issues that I

know will be of interest to

honourable members, the government

has been clear that we will not

stand for unlawful persistent cold

calling made by companies in the

claims management sector and cold

calling is already illegal under

certain circumstances, and we have

forced companies to display their

numbers when they call, make it

easier to take action against those

involved in making the cause and

strengthened the information

Commissioner 's office powers to

impose fines. A number of companies,

though, continue to act disreputable

the so it is only right that the

government take steps to further

regulate the sector. That is why the

government has committed in the

other place to introduce measures to

tackle these issues and the

Department for digital culture media

and sport is working through the

details of amendment to prohibit

CMCs for making light unsolicited

calls unless the receiver has given

prior consent. This step combined

with previous actions in this area

should act as a warning to those

acting unlawfully, that they... That

we will not rest until this problem

has truly been eradicated. If I can

continue for a bit longer and then

take some more interventions. The

government welcomes the findings of

the work and pensions select

committee report which explores the

issues of how to protect pensions

from scammers and we remain

committed to protecting savers from

pension scams and we have already

announced that we are banning

pensions cold calling, tightening

HMRC's rule to stop pension scammers

and fraudulent schemes and

preventing the transfer of money

from occupational pension schemes

into fortunate ones, and the

government is reviewing the

alternative proposals for banning

cold calling within the bill, we

have also listened to the concerns

are rounding the risks of not

receiving sufficient guidance and

advice prior to taking advantage of

the pensions freedoms and we are

considering the amendment's

recommended to make sure that

members of the public are aware of

the importance of receiving

guidance. Honourable members will

also be interested in the edition of

the debt respite scheme which

includes a breathing space period

and a debt repayment plan, and we

understand the valuable additional

support that the scheme could have

for thousands of vulnerable

individuals and we want to implement

a breathing space scheme as quickly

as possible, the government is

pressing on with policy development

and we have already set out a firm

timetable for consultation and are

continuing to work closely with a

wide range of stakeholders. The call

for evidence on breathing space was

published in October and it has now

closed, and after responding to the

call for evidence, we will consult

on a single policy proposal. The

bill gives an and enabling power to

establish the scheme after receiving

the advice from the financial

guidance body. It is important that

we take the time to get this right,

the scheme will only achieve its

intended benefits for indebted

individuals if it is properly

designed, and I look forward to the

government working with honourable

man was constructively so we can

enable the scheme to benefit

vulnerable people and families as

quickly as possible.

I thank you

forgiving way. -- for giving way for

cold calling is more than just a

nuisance for some vulnerable people,

and some of my constituents have

said they had signed up to this but

they are still bombarded by these

parasites and one person with

dementia gets several calls a day

full -- and be any way to stop this

practice is to hand out punitive

fines. -- the only way. Will Maher

honourable friend required the

regulator to clamp down on this? --

my honourable friend.

A very

important point, there are many

constituencies I'm sure who could

bring similar cases forward, the

maximum penalty will remain the same

but that is up to half £1 million,

we have got to make sure that people

don't abuse the system and that is

why especially within this bill we

are looking at ways to ban pension

cold calling. I will indeed and that

will be my last one.

I sense puzzlement on both sides

that the government is pulling its

punches on cold calling. There is

consensus that this should be

banned. That includes claimant

organisations like the Association

of Personal Injury Lawyers, why

won't the government just ban cold

calls?

We have pulled that forward,

but that will be for this bill and

there will be a ban. It is working

out how that is done. But that is

the intention. Members will be aware

that the DWP took on responsibility

from Treasury in October to work

with the regulators, industry and

others to create a pensions

dashboard. This is a digital

interface to I allow individuals to

see all their pensions information

in one place. We are conducting a

feasibility study to explore the key

issues and determine a path towards

this implementation and expect to be

answerable to report in March. The

Government believes the needs of the

consumer must be at the heart of the

dashboard's design. We will ensure

that people's interests are properly

safeguarded and their information

protected. As part of the study we

are considering what role the single

financial body may have. I firmly

believe that this bill is useful and

fair. One that has the individual at

its heart. Its goal is to make sure

that people are easily able to

access free and impartial financial

guidance to help them make more

effective financial decisions.

Having access to guidance will boost

their confidence and is a crucial

step towards improving their

financial capability. The bill sends

a clear message to the CMCs by

transferring regulatory

responsibility to the FSA, providing

a stronger framework to ensure

individuals are accountable for the

actis of their businesses and

protecting the consumers from

excessive fees. This lies at the

heart of Conservative fros

philosophy and understanding how you

can a stronger individual by

understanding your finances and not

allowing yourself where possible to

get into debt. It is about

supporting the individual and the

family and the community and they

can best do that by understanding

their own finances. I look forward

to having a positive and

constructive dialogue in this house.

The question is the bill be read a

second time. Debbie Abrahams.

Thank

you. Can I just say how lovely it is

to see you in your place and extend

my good wishes to you. It was very

re-Miz of me as well not -- remiss

not to welcome the honourable lady

to her place when we had urgent

question and I do congratulate her

and look forward to working with

her. Possibly not in the same tone,

I think this is going to be a

constructive debate. There is a lot

in the work and pensions portfolio

for us to debate. In addition thank

you for outlying the content of

guidance and claims bill and take

the opportunity to thank members

from the other place as well who

have spent many months scrutinising

this bill. Although there have been

occasions made already, concessions

already, we believe that there are

still several more that need to be

made. However, we recognise the

importance of the stated aims of the

bill, principally to increase the

levels of financial capacity, reduce

the level of problem debt and

improve understanding of pensions.

As such we won't be opposing this

bill. As has been explained and will

rush through this, the bill

introduces a new entity to provide

guidance. This will replace three

organisations. The new single

financial guidance body will have

responsibility for us to treat

strategic function to support the

development of a national strategy.

To ensure the bill's aims are met,

we want the new body to be a visible

and properly resourced organisation.

So that it be identify and support

the people who need help. The second

part introduces a tougher and

welcome regulation regime to...

Tackle conduct. Can I just finish

this point? To tackle conduct issues

in the claims management market

which we can also support.

I am

grateful. Is not one of the problems

that potentially risks inhibiting

the success of the new single

finance guidance body the that we do

not know where the highest levels of

problem debt are as yet. And might

it not be sensible to take the

opportunity at committee or report

stage to look at the example of an

American piece of legislation, the

community reinvestment act which

requires all lenders to publish

anonised details of debts that have

been taken out with them. So that as

a result community organisations,

debt advice bodies, know where to

target their expertise to help.

I

think my honourable friend makes a

valuable point. I'm not Fram with

that particular piece of American

legation. But will look at that and

see what we can do in terms of

placing amendments before the

committee stage. The Financial

Conduct Authority will regulate

company activity as a regulated

activity, taking over responsibility

pr the Ministry of Justice. This is

a high level framework bill. We

particularly welcome the

Government's assurances that the SF

GB will work with the Financial

Conduct Authority and the Treasury

on issues regarding financial

inclusion. However, give than the

work and pensions Select Committee

raised concerns about the inadequacy

of Government measures to protect

pension savers nearly three years

ago, and the difficulties we have

seen arising from that, I'm bound to

ask why it has taken so long to

recognise these failings. I'm also

concerned that there are no

specifics on delivery channels,

given the large number of people who

are currently failing to access

services. It is vital that the SF GB

can has the resources to make it

available. Digital... Is not a

mantra we want to hear. Given the

complex needs and limited resources

of people who most need its

services. I will give way.

The

experience of the transferring of

the British Steel pension scheme

into a new scheme is something that

was announced in early 2017 and was

very public. When it all blew up and

we saw it becoming fertile territory

for unscrupulous pension advise ors,

the FSA seemed to be surprised. Why

didn't they see it coming and what

should be done to improve the early

warning system, so the regulators

can see these things coming and be

more proactive, because prevention

is better than cure.

My honourable

friend makes a valuable points and

I'm going to come on later exactly

to that point, because this is what

we are seeing. We have seen in BSPS

and now in Carillion the pension

savers there. Last year's figures

from the FCA make shocking reading

of those planning to retire only

10%, 10% had used the Pensions

Advisory Service and only 7% had

used pension-wise. The new SF GB

will have to do better. Eight

million people are over indebted

according to a report in March last

year. Fewer than one in five

currently seeks advice. Many of

these people are the most

vulnerable. Half the clients seen by

projects have had a diagnosed mental

health condition. It is vital these

people continue to be supported

during the transition period and

that SF GB identifies strategies to

reach people who don't use services

now. They talk about long-term

savings once it has been

established. It is difficult to see

how that will happen if the new body

is to fulfil all its objectives,

particularly to en sure that advice

is available to those who most

needed. Has the Government thought

about what resources the SF GB will

require. Has the minister considered

what arrangements will be put in

place to ensure that people can

continue to access existing services

during the transition period? The

five areas that SF GB is expected to

concentrate on are provision of debt

advice, information and guidance

relating to pensions, accessing DC

pots and retirement planning. We

welcome the Government's decision at

the urging of our colleagues in the

other place to make it explicit that

this will be impartial information

and continue to be provided free to

members of public. The SF GB will

also help consumers avoid fraud and

scam and give information on wider

money matter and co-ordinate efforts

to improve financial capability as

long as programme for children and

young people. It has a strategic

function to support and co-ordinate

a national strategy, specially given

the appointment of the minister of

financial inclusion, this needs to

be strengthen to a develop and

deliver function. We welcome the

focus on the provision of financial

education for children and young

people, but we think the Government

should be bolder as recommended by

the House of Lords committee. The

new body will have to cope with

rising prices and a fall in real

incomes and saving levels that have

crashed. Evidence provided to the

Lord refer to fears expressed about

the rising in queries covers rent

arrear, energy and water and

telephone bills and Council Tax. And

then there is the impact of

universal credit. As I have

mentioned on numerous occasions, we

support the aims to simplify the

benefit system and make transitions

into work easier and reduce child

poverty. However, the Citizen's

Advice report showed that some

aspects of UC risk causing or

exacerbating problems. Clients are

more likely to have debt problems, a

quarter of the people they helped

needed help with debt and are

struggling to pay their debts. More

than two in five clients in UC have

no spare income to pay creditors.

Sit Citizen's Advice makes

recommendations that are pertinent.

Including more funding for debt

advice. They want the FCA to monitor

the role of the UC. And the role of

it. Has the minister considered the

impact of UC on personal debt and

the implications this has for the

resourcing of the new FS GB. Taking

up recommendations from Citizen's

Advice would achieve some of the

problems, but the Government must

stop the roll out of this programme

and reverse the cuts which makes it

is failing to make work pay. The

SFGP will have to cope with a

complex pension sector. More and

people are within the scope of

occupational pensions. The other

change has been the introduction of

pension freedoms. We welcome the

Government's commitment to the

delivery of the pensions dashboard,

given the issues pension scheme

members are facing, including

British Steel and Carillion, I want

the Government tackle the abuse of

scammers who have been targeting

BSPS and Carillion pension members

and which will say more on this

later. I will do.

I wonder if she

would agree it would be useful to

have a connection between the new

body and the financial conduct body.

I regret we are move away from a

Treasury involvement she may know

some of the products that people

investing in after their pensions

freedoms are from assets managers

known as prips, these products

related to investment or insurance.

New regulations came out, but there

could be a new mis-selling scandal

as they have wild predictions about

the amounts that could be earned.

Does she gree the guidance body

should deal with this.

You have made a key point the man

things are slipping through the net,

and it needs to be tightened up and

this is something we need to explore

at the committee stage. As it stands

they will provide advice on personal

finances and debts only and not

business finances and debts, the

money advice trust which has had

more than 38,000 people last year

says the many self-employed people

there are no distinctions in their

personal and business finances.

To

exclude business finances from the

SS GB's remit is a missed

opportunity especially given the

growth and implement problem there

has been in recent years, many

self-employed as a group have also

seen falling income since the

recession you'll macro, double the

minister

since the recession, and as

for the changes to claims management

companies, the changes are not

satisfactory, and it has been

characterised by an poor value for

money and nuisance calls and

speculative and fraudulent claims.

This can provide access to justice

for those who are not willing to

bring a claim for compensation

themselves. Further, as the Karren

Brady review says, well functioning

market can act as a check and

balance on the conduct and complaint

balances. We know the review

considered a move GDS FA would

represent a step change and this

seems the right decision, especially

as 99% of turnover relates to

financial services, and PPI and

package bank accounts. Turning to

the other part of the bill, there

are some aspects we want to

strengthen especially clauses, four,

five, 20 and 28. I will.

Thank you

forgiving way. I am fortunate enough

to chair the co-operative party and

when the things we are keen to

encourage the take-up of services

offered by the financial

cooperatives like credit unions,

would she be sympathetic to an

amendment at report stage from Co-op

MPs urging single finance body to

promote credit union services across

the country?

Again, you have made a

very interesting point. I would look

to work with him on the details of

that and to understand exactly what

he wants to achieve. I also want to

talk about the need for a duty of

care on financial service providers

and a breathing space for those

trying to manage their debt

problems. Moving ontohorse-4-macro,

we welcome to the ban on cold

calling but the scope of the clause

is too narrow and not urgent enough

-- clause four. People are being

conned out of their life savings.

There also scams which work against

businesses and the Association of

British travel agents has recorded a

520% increase in the number of

gastric illness complaints and as a

result hoteliers are now threatening

significant price increases and some

are even considering withdrawing the

all-inclusive product from UK

holiday-makers entirely. Recently

released statistics have shown one

in five people have been contacted

about making a holiday sickness

claim with cold calling being the

most often used approach. Adverts

have appeared online of encouraging

people to cash in their pension

pots, and the minister, I'm sure,

will have noted the evidence from

the work and pensions select

committee where the extent of

pension scammers was revealed, this

has involved advisers travelling

hundreds of miles in the hope of

capturing high fees for each pension

pot basic seed in transferring. The

select committee described these

predatory sharks, providing a