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Pensions

– in the House of Commons at 7:30 pm on 4th May 2020.

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Photo of Guy Opperman Guy Opperman The Parliamentary Under-Secretary of State for Work and Pensions 7:30 pm, 4th May 2020

I beg to move,

That the draft Automatic Enrolment (Offshore Employment) (Amendment) Order 2020, which was laid before this House on 16 March, be approved.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means)

With this we shall take the following motion:

That the draft Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2020, which were laid before this House on 16 March, be approved.

The Minister is asked to speak for no more than 20 minutes

Photo of Guy Opperman Guy Opperman The Parliamentary Under-Secretary of State for Work and Pensions

I am pleased to introduce these instruments, which follow the statement that I laid before the House on 16 March. It is an honour to address the House remotely, and to be the first Member of Parliament for Hexham to do so. I hope that it is also the last time I do so, and that we can get back to business as usual and to the Parliament that we had before.

Before I turn to the substance of the instruments, Mr Deputy Speaker, I hope that you will indulge me briefly while I comment on some of the matters before us. We have a situation in which 25% of the working population are furloughed, with their wages paid for by the Government, and the Department for Work and Pensions is undertaking the Herculean task of taking well over 1 million people on to universal credit. As you will know, Mr Deputy Speaker, it is also Star Wars Day. While I am absolutely certain that the force is with you, I hope that the force is also with my broadband provider. If it fails, I can assure you that I will not blame the Government.

It is an honour to be a Minister at the DWP and to be the first to move regulations in this way. In her statement earlier, the Secretary of State rightly thanked our fantastic workforce, who have worked day and night to ensure that all the DWP’s services are provided in a professional and competent manner. I should like to put on the record my thanks to all the staff who work at the DWP, including those in jobcentres up and down the country, such as Hexham jobcentre in my constituency.

I also thank everybody at Team Pensions, who have worked tirelessly to ensure that covid-19 does not adversely impact local and national populations. In particular, we have cancelled the pension levy increase, help has been given to defined contribution and defined benefit providers, and we continue to try to stop the public being scammed. Finally, I thank my team in Hexham, led by James McArdle, and my team at the DWP, led by Lauren Thomas.

Mr Deputy Speaker, you are aware of the importance of automatic enrolment in all our constituencies, and these instruments are important. Automatic enrolment is one of the great cross-party success stories. Conceived under a Labour Government, formulated and brought forward under the coalition, and expanded under a Conservative Government, it is one of the finest public policy successes in the last generation. We now have 10 million plus people who have been automatically enrolled on to an occupational pension; automatic enrolment has transformed workplace savings. They are now saving 8% per annum on an ongoing basis, which simply was not the case previously.

The instruments will implement the conclusions of the 2018 statutory review. The review concluded that automatic enrolment into workplace pensions should continue for eligible employees in the maritime industries, ensuring their access to a pension in the same way as workers in the rest of the UK economy. Subject to the approval of the House, the instruments will remove the sunset clauses contained in the original 2012 legislation so that it continues in force beyond the current expiry date of 1 July 2020. The business of the Government goes on notwithstanding the impacts of covid-19. We will overcome this pandemic, we are Great Britain. I commend these regulations to the House.

Photo of Jack Dromey Jack Dromey Shadow Minister (Work and Pensions) (Pensions) 7:35 pm, 4th May 2020

Thank you, Mr Deputy Speaker.

Following on from what the Pensions Minister said, our country is gripped by the greatest crisis since 1945, and in the great battle to save jobs and livelihoods I too have nothing but praise for the DWP staff, who, together with key and essential workers throughout our country, have been utterly magnificent in rising to the challenge of protecting the public and the public interest. We will come through this, not least because in an hour of darkness what we saw was our staff, the very best of Britain, rising to the challenge, putting themselves on the line to support others, sometimes in desperate difficulty and occasionally putting themselves in harm’s way, to do the job they are determined to do. They deserve nothing but our warmest praise.

The Pensions Minister has heard me say before that auto-enrolment, introduced by the last Labour Government, was a landmark achievement. It is deeply welcome that there has been a continuity of policy, as a consequence of which 10.2 million people are now saving £90 billion a year via auto-enrolment. We are seeing extraordinary benefits: for example, 77% of people are now engaged in a workplace pension. It was a dream that we would ever make such progress in years gone by; it was a vision that we gave birth to and carried forward. I stress once again that I welcome the continuity of policy on the part of the Government.

There is undoubtedly room for improvement with auto-enrolment; 8% cannot be the summit of our ambition —the £10,000 threshold and the age of 22 threshold likewise. There are improvements that require to be made at the next stages, including tackling the deep-seated problems for the self-employed. Having said that, it is absolutely right that we celebrate the progress made thus far.

Turning to the statutory instruments, we must constantly broaden the scope of auto-enrolment to take in yet more workers on the one hand and ensure that nobody falls out on the other. To that end, these statutory instruments are necessary; otherwise, the interests of maritime workers and seafarers would be put at risk, and that cannot be right, not least because of the job that they do. The sunset clause that would otherwise have created real problems for continuity requires to be dealt with by way of these statutory instruments, and we are therefore pleased to endorse them and we will certainly not be voting against them.

Going forward to the next stages, in the spirit that the Pensions Minister referred to I say that we have monumental problems as a country and I am in no doubt whatsoever that there will be significant implications for pensions and future generations of pension earnings for years to come. But today these are necessary statutory instruments, which we are more than happy to support.

Photo of Nigel Evans Nigel Evans Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. There is a 10-minute limit on contributions and I hope contributors have timing devices so they do not go over that limit.

Photo of Stephen Flynn Stephen Flynn Shadow SNP Deputy Spokesperson (Treasury - Financial Secretary) 7:39 pm, 4th May 2020

Thank you, Mr Deputy Speaker.

It is great to join you from Aberdeen, just 400 miles or so north of Parliament. It is perhaps apt that I am partaking in these proceedings from the north-east of Scotland, given that many of those who will be directly affected by the business before us will live or work in this wonderful part of Scotland.

Before I start, I wish to echo the Minister’s sentiments about the tireless work being undertaken by public sector staff across Scotland and the rest of the United Kingdom. It is important to state from the outset, without equivocation, that we must always treat the health and welfare of seafarers and offshore workers with the utmost importance and to commend these workers for the duties they undertake on a daily basis, in conditions that can often be harsher and more challenging than any of us can imagine. From those working on oil platforms to those fishing the seas, the workers we are referring to tonight are many of the unsung heroes who keep our society functioning, and many of them will still be working as hard as ever despite the obstacles posed by the ongoing pandemic. That is why it is important that we all agree to the business before us tonight, for it ensures that these key workers continue to quality for auto-enrolment into a workplace pension, something that many of us on dry land simply take for granted.

In such challenging circumstances, doing anything but continuing to provide this guaranteed access to a workplace pension would be unforgivable, and I am glad that we all seem to be in agreement on that point. However, given the subject matter before us, it would be remiss of me not to outline where the Government can and should be going further in their support of these workers in the future. It should come as no surprise to anyone that my colleagues and I in the Scottish National party have many, many frustrations about the policies of the UK Government, and that is very much true of the business tonight, because despite this debate being focused on protecting workers’ rights to auto-enrolment and to a workplace pension, these measures will ultimately fail to cover all seafarers and offshore workers. The reason for that is simple, and it lies in the fact that those who earn less than £10,000 each year, through low pay or having part-time work, or, in some instances, a combination of both, are simply not eligible for automatic enrolment. It is not unreasonable to suggest that fair pay and fair pensions should be at the forefront of what we seek to promote as parliamentarians, so I urge the Government to look again at this point in the future. I appreciate and accept that many immediate and pressing challenges are facing Ministers, but where they have the power to elicit positive change, they should be doing so, and lowering the auto-enrolment threshold of £10,000 would be a proactive and positive step in the right direction, one that would undoubtedly provide a further layer of support to many of the hardest workers who find themselves on the lowest pay.

The second key area of frustration that I wish to reflect on relates to the situation facing many offshore workers based here in Aberdeen. At present, not a day goes by when we do not pick up a paper, or look online, and see that companies and organisations operating in the offshore industry are looking at job cuts. Indeed, in some instances the decision has already been taken to dismiss hundreds of staff members. However, despite that worrying trend, coupled with continued pleas for support from both workers and businesses, the UK Government have opted to sit silent. It is all good and well the Government bringing forward this business tonight to ensure that offshore workers have access to a workplace pension, but when will the Government bring forward measures to ensure that jobs are protected in the first place? Put simply, someone cannot have a workplace pension if they no longer have an employer.

I have raised this issue of the lack of support for the offshore industry with the Government on numerous occasions in recent months, and it is important to stress that the challenges facing the industry are not isolated to the coronavirus pandemic. On 3 January, the price of a barrel of Brent crude oil was almost $70, whereas as of 5 pm today it stood at about $26, having been as low as $19 last week. The industry has had to face the perfect storm of an OPEC price war coupled with the unprecedented situation posed by covid-19. The harsh reality is that the storm is being felt in Aberdeen, and I, like many others, feel that it could get much worse before it gets better. One way in which it can get better, and sooner, is if the UK Government listen and act upon the support mechanisms proposed by the likes of Oil & Gas UK in relation to the job retention scheme, the covid corporate financing facility and the coronavirus business interruption loan scheme—CBILS. Another way is to provide the money necessary to support the city and wider region to embark on a just transition that protects jobs and builds a sustainable future.

If this UK Government do not act, the reality is that the business before us tonight will not be worth the paper it is written on for the thousands of workers who will lose their jobs. We should all back this motion as it protects the auto-enrolment of seafarers and offshore workers at present, but let us not stop there. Let us remove the unnecessary financial cap on entry to the scheme, and let us do everything we can to ensure that those workers whose jobs are currently uncertain have their futures protected by this UK Government.

Photo of Guy Opperman Guy Opperman The Parliamentary Under-Secretary of State for Work and Pensions 7:45 pm, 4th May 2020

I will speak briefly in response. I thank both hon. Gentlemen for their support for the regulations. It is entirely right that my Labour colleague, Jack Dromey, should say that this is a cross-party success story, and I thank him for the commendable way in which he has approached these regulations and the work that we do together. On the comments by Stephen Flynn, who speaks for the Scottish National party, I would merely point out that approximately 24% of the population have been furloughed and are being supported by taxpayers and the Government and that over 1 million people have recently moved on to universal credit, massively enhanced. There is no doubt that there are great difficulties in the north-east of Scotland, but I am certain that the Chancellor and the entire Government are fully supportive, whether through the coronavirus job retention scheme or any of the other schemes that they are putting forward, to ensure that this country gets through this terrible pandemic.

Question put and agreed to.