Financial Assistance Scheme (Increased Cap for Long Service) Regulations 2018 — House of Lords, 2018-01-22
Topic: Social Welfare
Archibald Kirkwood (Liberal Democrats, Centre to centre-left): My Lords, it is a pleasure to follow the noble Baroness, Lady Altmann, who has devoted her lifetime to working in this area. It is much to the benefit of the House that she is able to contribute to these debates. I agree with much of what has just been said, both by her and by the noble Lord, Lord McKenzie These regulations are welcome as far as they go. I agree strongly with the parity position the Government have taken between the PPF and the Financial Assistance Scheme. That makes me ask why there has been this delay in getting this statutory instrument brought forward, because last year we dealt with the PPF in a similar set of regulations, and I cannot understand why the two sets of regulations were not done at once. That might sound nit-picking, but it is symptomatic of the way the Financial Assistance Scheme can be treated as a poor relation of the PPF rather than as having full parity I declare an interest, although it is with a small "i", because I am a member of the Secondary Legislation Scrutiny Committee, which looked at these regulations quite carefully. We got some assistance from the DWP, for which we are grateful, and the responses now appear in appendix 3 of the committee’s 15th report. A number of questions were raised when the committee looked at this issue. The noble Lord, Lord McKenzie, mentioned it, but although the Hampshire case has been going on for a long while and is now in the Court of Appeal and subject to the European Court of Justice, it has a bearing on this. We are entitled, at the very least, to an update on where the Government are. I know that the matter has been referred by the Court of Appeal for some further advice to the court in Europe, but the implications for these regulations would be quite direct and could be dramatic. It is therefore only right that the House should ask for what further update is available to the Minister this evening I will also ask some questions about the administrative costs. It is music to my ears that the costs of the IT system that is being introduced have been cut by nearly half—except I wish I believed that that happened in the real world. If we are talking about 290 continuing members—it is essential financial support for them—and the total cost of the scheme is £1.2 million a year for the next eight years or thereabouts, the Scotsman in me thinks, "Is there not a cheaper way of doing this?". We are spending a lot of administrative money which might be made available to the 290 members currently in receipt of support from the FAS With the help of some clever actuaries—who do exist, and can come up with creative solutions—I wonder whether, in a closed scheme, some of the liabilities that the FAS has taken on could not be capitalised to the advantage of the members of the scheme. I see the noble Baroness, Lady Altmann, who I call my noble friend, having a long look down her nose at that suggestion. That may conceivably not be possible but my point is that we have a lot of administrative work in taking these liabilities seriously, as we should. But does common sense not give us an opportunity to look at a cleaner, long-term way? It might mean a payment up front to deal with it but we could then close the book on a full and final settlement, which would be to everyone’s advantage The proposal is that the DWP will have to bring in these uprating orders for the FAS of plus 3%, or whatever it is, for the next eight to 10 years. I do not understand why they are not valorised in some way to CPI. I know that some elements of it are but it seems something of an administrative sledgehammer to crack a nut to go through regulations to do this, when it is obvious that it is in parallel with the PPF scheme. We all know what is going on. Why is it not automatic and set at a rate that everybody understands, to prevent us having to do this in future Finally, on a powerful point made by the noble Lord, Lord McKenzie, in my experience, when there are requests for information on which some of these calculations are made, the data that some pension trustees produce are dodgy if not fake. The Government need to be careful that they address that problem properly because, if they do not, inaccurate calculations are being made in a way that could prejudice the members of the scheme, who are not in a financially advantageous position. It is in everyone’s interest to make sure that they get what is due to them. Having said all that, I am happy to join others in supporting these regulations.