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I thank the Minister and wish him many happy returns. I hope that he has a happy birthday. We are satisfied with the Minister’s comments. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause, as amended, stand part of the Bill.
On new clause 31, as we have heard, the local government pension scheme in England and Wales has reached a record surplus of some £45 billion, which is 112% of funding levels, as of June 2024, with some estimating that it will rise to more than 125% by the end of 2025. Despite that strong funding position, no measures have been introduced to make it easier to allow councils or employers to reduce contributions or take contribution holidays. The surplus could be used to create contribution holidays for local authorities, as we have heard, or potentially to reduce council tax or increase the money available for spending on local services. The current Government focus remains on asset pooling and local investment strategies, rather than enabling the more immediate and flexible use of surplus funds. Councils can already reduce employer contributions under regulations 64 and 64A of the Local Government Pension Scheme Regulations 2013. The problem is that, in practice, actuaries and administering authorities hold the cards, and the guidance has been used to shut down reviews even when funding levels are strong. The Minister needs to consider issuing better guidance to councils to make the process more transparent, to rebalance the power between councils and funds, and to ensure that actuaries properly consider reductions when the funding position justifies it. The mechanisms that are currently in place mean that the assumptions are overly prudent, reviews come only in cycles, and councils have no leverage in disputes. New clause 31 seeks to introduce provisions to allow employers within the local government pension scheme to take contribution holidays or reduce employer contributions when surplus funding is confirmed, with actuarial valuations, subject to maintaining the security of member benefits. It would also require the Secretary of State to issue guidance on how surpluses could be prudently deployed to balance member security with local fiscal needs. That would enable councils to better manage budgets, support local services and stimulate local economies without compromising pension schemes. However, the Minister seems to be working with the Opposition on trying to find ways to move all this forward, so for the sake of brevity we will seek to withdraw new clause 31.
I beg to move amendment 244, in clause 5, page 6, line 6, at end insert— “(2) In the case of merger of schemes for local government workers, the Secretary of State must consider the geography of scheme areas and ensure these areas align with strategic authority boundaries before implementing the merger.” This amendment requires the Government to explicitly consider the geography of new LGPS areas in any reorganisation. The amendment would amend the Public Service Pensions Act 2013 to explicitly empower the Secretary of State to make regulations if there was a merger, including a compulsory merger, of two or more LGPS-funded schemes. The change in clause 5 would support flexibility for structural consolidation to enhance fund management and efficiencies; however, there is uncertainty about how the Government will confirm geographical boundaries for the local government pension scheme asset pools amid local government reorganisation. Currently, LGPS reform aims to consolidate assets and strengthen local investment, but concerns remain about the implementation timescales and risks of disruption. Stakeholders highlight the need for clarity on new geographical boundary definitions and on alignment with new or existing local authority boundaries. Potential challenges exist in meeting asset-pooling and Government deadlines if changes coincide with wider local government changes. Amendment 244 would require the Secretary of State to explicitly consider, for any LGPS scheme merger, the geography of scheme areas, and ensure alignment with strategic authority boundaries. This would help to provide clarity, promote smoother transitions and reduce disruption from concurrent local government reorganisations. The amendment emphasises the importance of integrating pension scheme boundaries with local government structures to support effective government and investment strategies. We hope the Government will reflect on this issue as the Bill progresses through the House.
I am reassured by the Minister’s comments and appreciate that he wishes to make the measure work in the interests, geographically, of local government or local authorities as they undergo a transition through the reorganisation of local authorities. Obviously, this provision needs to work concurrently with that process, but I appreciate that it is up to the authorities in the first instance. We wanted to be reassured, and the Minister has made the point that there will be no or little Government interference unless they really do disagree with themselves. I am reassured. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.
I thank the Minister for his comments. We agree that the law needs to be updated to reflect current circumstances, and it makes sense to ensure that companies that have not made pre-2016 resolutions are not unfairly penalised. We broadly support the update to the law because it corrects an important imbalance. However, it is crucial, as we move forward, that we maintain the necessary guardrails and uphold the independence of trustees to protect scheme members’ interests. These important aspects will be further discussed in relation to clause 9. I will raise a couple of points made by people we have been engaging with while looking at the Bill. First, the Pensions Management Institute highlighted its disappointment that the Government did not take the opportunity of this legislation, which broadly talks about defined-benefit funds, to make it easier and more tax efficient for employers and schemes to use scheme surpluses to fund contributions under defined-contribution arrangements, including those not held in the same trust. That would have opened up possibilities for many entities that have long since moved their ongoing DC provisions to a master trust or contract-based arrangement. The Phoenix Group also highlighted an issue. To protect funding levels after surplus release, schemes may adopt more cautious investment strategies, reducing allocations to private and productive assets. That could undermine the Government’s growth objectives. Aside from those points, we are happy with the clause.
I will not take up too much of the Committee’s time, but suffice it to say that we all heard the evidence that was presented on Tuesday, and we in the Conservative party agree with the Liberal Democrats’ amendment. We will support it.
I beg to move amendment 247, in clause 9, page 8, line 23, at end insert— “(aa) prohibiting the making of a payment unless the scheme’s assets have exceeded a buyout valuation,”. This amendment requires that surplus extraction is only permitted once buyout funding levels are achieved.
Any decision to release surplus funds from defined-benefit pension schemes should rest firmly, as we have discussed, with the trustees. It is important to emphasise that trustees bear the ultimate responsibility for such decisions. We believe that surplus repayments to employers should be permitted only when members’ benefits are fully protected and robust safeguards are in place to maintain the security and sustainability of the scheme. The Bill notes that the detailed criteria for surplus payments will be set out in forthcoming regulations, and those regulations must be subject to close scrutiny with a primary focus on safeguarding members’ benefits before any funds can be released. There remain important unanswered questions regarding what appropriate guardrails for surplus release should look like. One firm belief is that defined-benefit pension funds should be funded to buy-out levels, to the extent that they are capable of securing members’ benefits with an insurer. Additionally, any surplus extraction should demonstrably provide clear benefits to scheme members, rather than simply serving the employer’s interest—although we heard evidence on Tuesday that did not necessarily agree with that. We acknowledge that there are broader issues facing defined-benefit pension schemes that we intend to explore further when the Committee considers the new clauses. In particular, the post-Maxwell accounting framework is a significant constraint on defined-benefit pension funds. The requirement to show deficits on company balance sheets suppresses growth potential. The Bill should not miss an opportunity to address those structural hurdles. One of the behavioural outcomes we have seen is that defined-benefit pension funds have been investing large amounts of money into bonds, including Government bonds, and not into equities where there is the greatest growth potential in the economy. That throws up a couple of problems in this area. First, the money is not going into equities, which are much more volatile than bonds. Secondly, if we see surplus extraction from some of those funds, that money will come from the Government bond market—the gilt market—and there may be an impact on the Government’s ability to borrow funds, which is something we will hear more about on 26 November. Crucially, the Minister will now be part of that, and I suspect he will be taking into account the bond market’s ability to meet Government borrowing requirements when he gets close to that date. Moreover, there is nothing in the current legislation to prevent surpluses from being used for purposes that do not support economic growth, such as share buybacks or dividend payments by the host employer. Neither of those outcomes necessarily aligns with the Government’s growth agenda, although it could be argued that the money is going back into the wider economy and finding its way back. None the less, we would like to see more guidance on how that money is to be spent. Simply repaying—potentially—private equity funds a large dividend will not necessarily help the greater good. The Bill proposes new flexibilities for defined-benefit schemes in surplus. Currently, the Bill is unclear on the level at which employers can extract that surplus and there is concern that, once a scheme is fully funded on a low-dependency basis, buy-out could happen. That is a lower threshold than for a gold standard buy-out and, while it may free up capital for employers and support investment, there are concerns that the change could risk members’ security, as buy-out remains the safest way to guarantee benefits. Amendment 247 would provide strong protection against a change of environment where DB funds start to slip back into deficit positions. Our amendments 260 and 261 are linked. Just Group plc wrote to the Committee to highlight that members of pension schemes that undertake employer surplus extractions should receive proper notification. Engagement with members should be undertaken before extraction, because ultimately any decisions on surplus extraction could be impactful on them. Setting out clearly in legislation what effective engagement would look like, including the role of the actuary in the process, would help trustees to understand their obligations and Parliament’s intent. Amendment 260 requires trustees to notify members at least 60 days before making surplus payments to employers, and ensures that members receive full information about proposed surplus payments, enabling informed participation. Amendment 261 aims to strengthen an actuary’s role in oversight of schemes accessing surplus, by requiring confirmation that member notification has occurred before certifying surplus payments. Both amendments strengthen the guardrails around DB surplus extraction, as part of our overall strategy of putting member interest first and protecting trustees. We will be pressing these amendments.
Sir Christopher, I am happy to proceed in order to get things moving. Question put, That the amendment be made.
As we have heard, the amendment authorises the use of surplus pension funds to contribute to the provision of free, impartial pension advice and guidance services to scheme members. The age of 40 is very important, and I hope that the Minister, on his 42nd birthday—
Forty-third! He looks 28. None the less, I hope he is getting plenty of pension advice; who knows when he may need it? This is a very good provision. The more informed people are about their retirement opportunities, the better. I suppose I have to declare a bit of an interest, inasmuch as I will retire in five years’ time, hopefully. It is incredibly important that people are well prepared for their retirement, and the more information a member of a pension fund has, the better it is. If the amendment is pressed to a vote, we will support it wholeheartedly.
Conservative amendment 258 would ensure that all regulations made under proposed new section 37(2A) of the Pensions Act 1995, which governs surplus payments from defined-benefit pension schemes, are subject to the affirmative procedure always, not just the first time that they are made. That would give Parliament ongoing oversight and scrutiny of any future regulations in the area. Without the amendment, regulations on defined-benefit surplus extraction would not consistently require parliamentary approval. That would potentially lead to insufficient scrutiny. The amendment aims to provide better parliamentary control over regulations as they are introduced. The key worry is the risk that the Secretary of State, whoever he or she may be, might use these powers to allow the payment of a surplus at funding levels below buy-out standards at some point in future, which could jeopardise scheme security and could happen without parliamentary scrutiny. The amendment is about improving the transparency and accountability of surplus extraction regulations for DB pension schemes, ensuring that Parliament maintains consistent oversight and guarding against premature surplus extractions that might undermine scheme funding security.
These are not amendments that we feel particularly inclined to support. They would require pension fund managers to make, publish and keep under review data to show that their portfolio investments are consistent with the goals of the Paris agreement on climate change and clean energy. That would include publishing prescribed information relating to climate change alignment and sewage discharge. Those are immensely important and worthy ambitions and intentions; we share their spirit, as we want a cleaner planet, cleaner waterways and improvements to our climate, but I do not think that this is the place to do it. Pension funds should be allowed to look at the best interests of their members, irrespective of wider public and social aspirations, so this is not a proposal that we feel we can support.
I beg to move amendment 254, in clause 10, page 10, line 20, at end insert— “(2A) Value for money regulations must require responsible trustees and managers to make an assessment of, benchmark and regularly report the— (a) net benefit outcomes, (b) investment performance, (c) quality of service, and (d) long term members outcomes of regulated VFM schemes.” This amendment broadens the definition of value for money to require assessment of net benefit outcome, investment performance, quality of service, and long-term member outcomes, and require schemes to report on these. On the wider point about value for money, we broadly support the introduction of a robust value for money framework as set out in clause 10. The framework, which was initially introduced under the previous Government, is essential to promoting transparency and accountability in the management of defined-contribution pension schemes, and it mandates responsible trustees or managers to assess and publish reports on the performance of their schemes. Ultimately, that should mean improved performance. It is worth bearing in mind, though, that there are potentially perverse outcomes —as we have seen, for example, with the Phoenix Group—as the consequences of an intermediate rating could drive less growth. I suppose it could be a less risky approach, but greater risk can lead to greater growth. None the less, we need to be careful as there could be perverse outcomes. I tabled the amendment as we are worried that the current value for money framework for defined-contribution pensions risks focusing too narrowly on costs and charges as the primary determinant of value for members. By contrast, the Australian superannuation system adopts a more holistic definition of value for money, including a net benefit outcome metric, which is defined as the sum of contributions and investment earnings minus all costs, fees, taxes and insurance premiums. Australian trustees are required not only to consider costs, but to act in members’ best financial interests, broadly encompassing factors beyond merely minimising fees. The Australian framework incorporates additional core metrics including service quality, investment performance and member outcomes. This broader approach reflects a more comprehensive assessment of value for money delivered to members.
That is a very good question. Ultimately it means, “What is the performance of the fund?” Members’ best interests can include a lot of different things, but ultimately we need to see the fund grow with the best performance it possibly can, given all things brought together. When members start to receive their pensions, they will therefore get the best terms they possibly can. We run the risk of trying to look at the wrong definition. For example, there has been an argument recently about the local government pension scheme—this came up earlier this week—with the Reform party talking about the fact that the scheme is charging 50 basis points. The argument is that reducing it to 10 basis points would save money. However, as I was discussing with a Government Back Bencher the other day, one of the problems is that if fees are too low, that reduces the ability of the managers to assess more complicated financial opportunities. If fees are kept at 50 basis points, the capacity to start analysing unlisted investments is retained. If fees are reduced to 10 basis points, the ability and skill of the managers to look into more than investing in other people’s funds or into simple listed equities is reduced. If we start to look at it as a cost-based issue only, we miss out the fact that we get quite a lot of extra expertise if slightly higher management fees are paid. The Australian framework incorporates additional core metrics including service quality, investment performance and outcomes. There is a concern that the UK value for money framework overemphasises costs and risks discouraging investment in asset classes, as I discussed, that historically produced higher returns but that might have higher shorter-term fees or complexities. This narrow focus could also dampen innovation in pension scheme design and reduce member engagement, ultimately harming long-term retirement outcomes for scheme members. It may be valuable to learn from the Australian approach by developing a value for money framework that balances cost transparency with metrics that encourage good investment strategies and quality services, aligning regulators’ and trustees’ incentives with members’ long-term financial interests. Our amendment tries to broaden the definition of value for money using the Australian model as a template. It would require the assessment of net benefit outcome, investment performance, quality of service and long-term member outcomes, not just cost. It would introduce a requirement for schemes to report and benchmark across these holistic measures, thereby enabling a more balanced and meaningful comparison of value.
I thank the Minister for a great effort—“spot on”, maybe, but we still feel inclined to press the amendment to a vote. That is important, even though we know that, rather depressingly, we will probably lose it—although who knows? You never know. It is important to put on the record that we feel that certain measures can be pushed forward, so we will be pressing the amendment to a vote.
This seems like a very technical clause, and we certainly have no objections to it. I also have no doubt that we will not be voting against the Government amendment. I think we are very happy with it.
Clause 12 seems fairly reasonable in its approach. Liberal Democrat new clause 42 seems in the broadest sense to follow our amendment 254 in respect of the Australian model; should it be pressed to a vote, we would be happy to support it. I have nothing more to add.
We are very happy with this measure. One of the important points, which has been made on a number of occasions, is to do with the wider financial education piece. One would hope that the satisfaction surveys would ask not only whether members of pension schemes are being given sufficient information, but whether they are being taught how to understand what that information means. That is quite important. It is more of a cultural thing than something that should go into the Bill. When we start talking about the complexities of pension funds, it does not necessarily mean a huge amount to the vast majority of people out there, and customer satisfaction surveys should be constructed on that basis. We need to ensure action on that financial education piece, but aside from that, we are very happy to support the clause. Question put and agreed to. Clause 13 accordingly ordered to stand part of the Bill. Clause 14 VFM ratings Question proposed, That the clause stand part of the Bill.
In a broad sense, we are very happy to support the clause. There are, though, a number of issues, and the point about benchmarking and what performance is being valued against can be rather complicated. We heard from the Liberal Democrat spokesman, the hon. Member for Torbay, a little earlier about his father’s experience of putting money aside and finding himself wanting to take it out in October 1987—I remember it well; I had been a dealer on the floor of the London stock exchange, so a stock market crash was a pretty hideous thing. However, if we look at a chart of the FTSE 100 from the early 1980s up to now and the 1987 crash, although I think it was down 37% at one point, looks like the smallest of blips in what was otherwise a very long-term bull market that continues to this day. The one thing we do know for sure is that those wanting better performance are likely to be investing in slightly more volatile assets. That can come from investing in equities or higher-growth businesses. There is no doubt that some higher-growth businesses will go bust, because they are taking risks, but ultimately, how many of us wish we had put more money into Amazon, Google or Apple back in the late 1990s? At the time it was not necessarily seen as a brilliant thing, but some of these businesses have done unbelievably well. That said, how can anybody understand how a company like Tesla, which is really a battery manufacturer, is worth more than General Motors, Ford and Chrysler? It does not necessarily make a huge amount of sense, and yet people are still investing in it. We can find ourselves looking at the value for money framework and come up with a load of benchmarks, which brings us to the point about the intermediate rating. We could find that an intermediate rating is done at a time when there are particular problems in the stock market, yet, looking at the long term, we could have what could turn out to be a stunning performance. We have to be very careful and not find ourselves throwing out the good in favour of the perfect. This will be something quite complicated; I do not necessarily think it is something for the Bill to worry about, but, as we continue the discourse of pensions performance and adequacy, we need to be very careful that we do not become obsessed with ruling out risk. There is a big argument about risk in our economy at the moment, which, again, is not for this place, but we could find ourselves ruling out risk. The other thing worth bearing in mind is that, by ruling out risk, we could stop money being invested into businesses that may look absolutely bonkers today, but turn out to be the next Apple, Amazon or Google. We just have to be careful about that. I suspect we shall have lots of debates over this. The Pensions Minister is on such a meteoric career progression at the moment that I am sure he will find himself as Chancellor of the Exchequer before very long—probably quicker than he imagines—but this is something that we need to keep an eye on. As I say, it is about making sure that we do not rule out the good in pursuit of the perfect.
My hon. Friend makes an incredibly important point. The story that the Liberal Democrat spokesman, the hon. Member for Torbay, told about his father is the most important point here. As we come to the point where we want to cash in the defined-contribution pension, we could find ourselves cashing in at completely the wrong moment. In a stock market crash, although it could be just a blip in a long-term bull market, none the less the hon. Member’s father would have seen a 37% drop in the value of his equities if he was benchmarked to the FTSE 100. If he was in higher growth businesses, he could, as the hon. Member said, have seen a 50% drop. So we have to be very careful. We can be as risky as we like when we are 21 years old. I cannot remember whether it was Adam Smith or Einstein who said that the eighth great wonder of the world is compound interest. Obviously we want to take risk early but, as we come up to that day when we finally turn our papers in and go home on the last day of work, we need to make sure we have got as much money out of our pension fund as we possibly can. That is why it is important to ensure that the VFM framework does not cause problems.
Broadly, we welcome clause 20, which builds on important work that was started under the previous Government to address the issue of small, dormant pension pots. This is a critical step forward to consolidate small pots, which can otherwise be costly and inefficient both for pension schemes and, importantly, for their members. However, we have some concerns about certain aspects of the measure that require further scrutiny. Notably, the Bill gives the Secretary of State the power to change the monetary value that defines a small pot at a later date. Although that is a logical measure that will probably need to be exercised as the small pots regime becomes more established, there is a risk that drastic changes to the minimum pot size could significantly alter the defined-contribution market in unintended ways. In particular, the potential market impact on schemes serving members with lower average account balances needs to be carefully considered. Automatically consolidating larger pots could reshape the market landscape, affecting members and schemes differently across the spectrum. Pensions UK has suggested that any future increases in the monetary value of the definition of a small pot should be subject to robust consultation with industry stakeholders, alongside an independent market impact assessment, to understand fully the ramifications of such changes. The Liberal Democrat point is extremely important. I hope that the Minister will verify how the small pot size was set at £1,000. The amendment seeks to increase that to £2,000, but why not £5,000 or lower it to £500? It is very difficult. The other problem with the clause is that a small pot defined as inactive could be inactively invested—for example, sitting in an index fund for 10 years without anybody worrying about it—and have crept up or down in value. It could be £1,005 one day and £995 the next. Does that change it from being an okay pot to a small pot, and therefore due for consolidation? This is a very difficult measure. Inevitably, it comes to the point of where it is defined. Similarly, will the amount be indexed against inflation, or against the stock market indices? How will the Secretary of State decide to increase it? There are so many questions about this. My gut feeling is that £1,000 is too small, but equally that it is incredibly difficult to determine what the right size is. I look forward to the Minister extensively discussing with the Committee exactly how he came to £1,000 and not £1,001, £999 or indeed any other number.
I beg to move amendment 259, clause 20, page 21, line 23, leave out from “procedure” to end of line 29 This amendment would make all regulations on consolidation of small dormant pots in DC schemes to the affirmative procedure all times they were made rather than just after first use. The hon. Member for Aberdeen North asked an interesting question about the application of the affirmative procedure to regulations on the pot size. Our amendment seeks to address the use of the affirmative procedure in the wider legislation that goes with this. As we continue to table amendments urging extra parliamentary scrutiny, I feel myself becoming slightly depressed at the prospect of having to see too much of the Minister, even though he is undoubtedly a lovely chap, in Delegated Legislation Committees as we consider every single change. It is important though, because at the end of the day Parliament needs to scrutinise what is going on, so it is a good thing that the size of the pot is subject to the affirmative procedure. It is okay, but not ideal that for anything that could be to do with the wider legislation, the negative procedure applies. Members having to look for a very material change going through in a written ministerial statement or whatever and then raise it is not necessarily such a good thing, given that this is fixing 13 million of these pots. That is an awful lot of them. If we increased the threshold to £2,000, would that number be 26 million? A lot of people that could be affected by this. This was largely a probing amendment to see what the Minister has to say. We are unlikely to divide the Committee on it. None the less, I am very interested to hear what the Minister has to say about the affirmative procedure.
I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.
I visited a nursery in Staines in my constituency, and the head there reported to me that, because of the charging regime and what they can and cannot charge for, every Saturday morning she ends up doing many hours of work on education, health and care plans, for which she cannot pass on the cost. Does the Minister recognise that phenomenon? If so, is it widespread?
My right hon. Friend is making an excellent speech. I know he is acutely aware that many communities that he and I represent in the Scottish borders rely on that television service. At the same time, they do not have access to a high-speed, high quality broadband connection unless they pay significantly for it. Does he agree that we need a commitment from the Government to extend the Freeview service to reassure residents in those communities?
State-owned Scottish Water is responsible for the water supply across Scotland. Last week, thousands of residents in the Scottish Borders were left without water for days, and terrible communication by Scottish Water made matters worse. We were facing a public health crisis, as well as an animal welfare crisis. Does the Secretary of State agree that the Scottish Government should undertake a full investigation into what happened and ensure that Scottish Water executives are held to account for their failure to act?
My hon. Friend is making a very powerful case, and I echo the sentiment that she has expressed so far. My constituent Sara Taylor came to me to make the case for the restoration of the fund. Her key point was that the economic and fiscal consequences, as Members across the House have said, are so obviously detrimental. If we do not spend the money on this, that means that the costs are displaced to society in other ways for the whole generation to come. Does my hon. Friend agree with that sentiment?
A month ago, I met Oliver Robinson from the British Trout Association. The association has produced an excellent report on the trout farming industry in the UK, but Oliver is struggling to get engagement from Department for Environment, Food and Rural Affairs Ministers. I tried to ask the Secretary of State about this in DEFRA questions earlier, but it would be much appreciated if the Leader of the House could make representations and try to set up that vital conversation.
It is a pleasure to serve under your chairmanship, Mr Twigg. I want to begin by thanking my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) for bringing us this debate and for speaking so eloquently. It is always good to see colleagues from across the House, particularly my neighbour, the hon. Member for Isle of Wight West (Mr Quigley), contributing to an important discussion like this one on the future of television. Terrestrial television matters. For generations, it has been one of the few services in public life that, subject only to payment of a licence fee, is free, universal and trusted by the public. Beginning almost a century ago, programmes were broadcast via radio waves through local transmitters to household aerials. Here in Britain, the British Broadcasting Corporation—the BBC—launched regular television services in 1936. Independent Television, or ITV, followed in 1955, breaking the BBC’s monopoly. Channel 4 followed in 1982, as did Channel 5 in 1997. The commercial sector too has enhanced the choice and diversity available to consumers in recent decades. For more than half a century, free-to-air channels have helped to shape our national culture and to inform our shared experiences. The digital switchover, completed in 2012, expanded choice and picture quality, with terrestrial television remaining a vital, universal service, trusted for news, public service broadcasting and live national moments. With the simplest of aerials and without any subscription or broadband package, families can switch on their televisions and know that they will find news, culture, sport and drama of the highest quality. That civic reach, as we have heard in this debate, is available to 98.5% of households. The current guarantee, provided by the last Conservative Government, for terrestrial broadcasting runs into the early 2030s. Decisions will soon need to be taken about what comes next, and that is why my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale sought this debate. Ofcom and the Department for Culture, Media and Sport are considering whether to maintain, reduce or phase out digital terrestrial television—DTT. These are weighty choices, which will have real consequences for households up and down the country. It is true that viewing habits are changing, and changing rapidly. Already, most households combine terrestrial, satellite and online streaming. According to Ofcom, 94% of households have internet at home, and 85% use video on demand services. It is not just younger people; older people do so too, but younger people are certainly doing it in greater numbers, and they of course will carry forward their viewing habits into the future. This debate is not about technology in the abstract; it is about people. If terrestrial television were to be withdrawn too hastily, it is clear who would be worst affected: older people who rely on accessible services they are used to; our rural communities; lower-income households, for whom streaming subscriptions are often a stretch too far; and people with certain disabilities who continue to depend on reliable and familiar formats. Those groups are not small in number; indeed, many such people live in my constituency on the east of the Isle of Wight. Those are good examples of groups that could struggle if this is done too early or in the wrong way. Maintaining the current system for a declining audience will not come for free. There will almost certainly be a need to upgrade transmission equipment by 2034 if DTT continues beyond that date. It will come at a cost to public service broadcasters too, and they may not be willing to bear that indefinitely. Managing the transition into a world without DTT, if that becomes the Government’s final decision, would need very careful planning, communications and support. The successful digital switchover in 2012 demonstrated what can be achieved when change is handled carefully. It was gradual and well supported, and no household was left behind. That must remain the principle today: whatever the future holds, nobody should be excluded. This debate is not about nostalgia for the past, but about fairness, resilience and continuity. It is about ensuring that the march of technology does not leave anyone behind, and about giving broadcasters and audiences alike the reassurance that free-to-air television, in whatever form it takes, will continue to serve the whole nation. I would also urge the Government and public service broadcasters to ensure that in the internet protocol television world, when it comes, their content is made as freely available as possible on as many platforms as possible. There should be no walled gardens.
As the Solicitor General knows, I have been campaigning to support victims of spiking. I thank her for meeting me before the recess, but unfortunately the correspondence from her office subsequent to that meeting seems to entirely miss the point and does not follow at all the conversation we had. Given that it quotes heavily the CPS, will she agree to meet again with me, and with representatives from the CPS, to understand the loophole in the law that I have identified? It would be a tragedy for the victims of spiking if this were not dealt with because of something as frustrating as a misunderstanding by people who were not in the room at the time.
Thank you, Madam Deputy Speaker. I hope you and everyone in this Chamber had a very good summer break, with just the right proportions of sun, sleep and family. If I may, let me start with a double round of congratulations: first, to the Prime Minister on his 63rd birthday this week, putting him squarely in the prime of life; and secondly, to my brilliant colleague, my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont), who has just been appointed to the giddy heights of shadow Deputy Leader of the House. That is the reshuffle that really matters. As befits a former lawyer at Freshfields, he will bring his forensic intellect to scrutinising the Government. I had been planning to talk about the Government’s performance over the summer, taking into account the escalating union demands for pay, the rise in inflation, unemployment and gilt yields, and the record number of small boat crossings in the first half of the year. I think it is fair to say that the past few weeks have been a total shambles for the Government. Little wonder that the Prime Minister has undertaken yet another of his performative Government resets to distract the media and the general public. He insists that everything is absolutely fine, which is doubtless why it is all being changed round yet again. They cannot blame these things on the previous Government, though doubtless the Leader of the House will try. There can, however, be only one topic today, and that is tax. In the real world, it seems that those of us poor souls who actually do pay tax are about to be confronted with a massive tax-raising Budget, perhaps with a particular focus, it has been rumoured in the media—or kites have been flown—on property taxes. Last year, the Chancellor increased spending by £70 billion, funding half of that through taxes and half through increased borrowing. Of course, it seems that the only person who will not be paying more tax is the Deputy Prime Minister. I like and rather admire the Deputy Prime Minister—uniquely among the Government, she at least has a policy of trying to reduce taxes. We just heard the Solicitor General talk about Government taking a strict line on fraud; I did not hear so much about taking a strict line on tax fraud—[Interruption.] Or potential tax fraud, but we now have a situation in which the Deputy Prime has tried to dodge paying £40,000 in tax on her third home after demanding that previous Ministers should resign over tax scandals. It appears that she failed even to look at His Majesty’s Revenue and Customs guidance on the internet as to whether higher rate stamp duty was payable. That guidance is readily available and is straightforward. It is hard to imagine that any qualified tax adviser—let alone any individual seeking to question their own tax arrangements—would not have taken a look or know about it. The Deputy Prime Minister signed a deed for what appears to be an off-the-shelf trust scheme from Shoosmiths, the solicitors. Was that crafted to avoid tax? We need to know more about what disclosures she made to the civil service about her three homes, what review was carried out and what advice she was offered. I hope the Prime Minister’s adviser will look at those issues, in addition to all the other issues he is looking at. Does the Leader of the House believe that Cabinet Ministers—let alone the Deputy Prime Minister of this country—should be using schemes to dodge tax? Should the Secretary of State responsible for housing be flipping her own main residence to avoid paying tax due on it? Does she concede that there is the appearance of very serious impropriety about these proceedings? Does she see how difficult they have made the situation for her colleague, the Chancellor of the Exchequer, who is planning to put a Budget in front of this House that will include tax-raising measures, many of which will likely be focused on property? Above all, Labour—and every Labour Member stood by this—made a solemn commitment to maintain the “highest standards” in office in its own general election manifesto. Does the Leader of the House accept that this conduct by the Deputy Prime Minister massively falls short of that, and that it discredits both the Prime Minister and the Government as a whole?
I rise to speak to Lords amendments 1 and 8, and therefore against the motion, in two minds. I say in two minds because I find the unilateral removal of the hereditary peers without seeking consensus, which is what a rejection of Lords amendment 1 would mean, both regrettable and exciting. I would like to take each of these two polarising mindsets in turn. My first emotion is regret. Britain has something of a Schrödinger’s cat constitution. We are simultaneously a modern, plural and open democracy, and a kind of autocratic theocracy. Our national motto, “Dieu and mon droit”—God and my right—points to the hereditary monarch being appointed by and accountable only to God. We have a state religion in England and Scotland, and in England the divinely appointed monarch is the Supreme Governor of the Church. The bishops, whom the King appoints, sit in our legislature, as do hereditary peers, who are the focus of the amendment. The King appoints the judiciary and is the commander of the armed forces. On paper, as Labour Members have pointed out, the country with which we have most in common is the demonic Islamic Republic, but unlike Iran we have simultaneously free and fair elections, broad debate in a free press, and freedom of religious and belief, and we are an open member of the international order. The point is that we would never design our tapestry of a constitution. In many ways it is absurd, but it is organic. It is rooted in the millennia of history. In two years’ time, we will celebrate the 1100th birthday of England, the most remarkable nation on earth, which a majority of us in this place are fortunate to have won the lottery of life to be born in. We should be respectful of that evolution, because that evolving constitutional order has empirically served us well. It is how it works in practice that matters, not how it looks on the ideological grand planner’s piece of paper.
My right hon. Friend is right. Our national story has brought us to a place where this House is rightfully dominant among the three parts of Parliament in exercising the sovereignty of the King in Parliament, but we should be careful of the wholesale execution of one of those arms. Let us be clear: that is what the unilateral removal of the hereditary peers would do. The other place without them is no more a House of Lords than my terraced house in Sunninghill is. A Cromwellian purge, it would leave that place the preserve of political cronies and failed advisers. Is that what we want? Is that progress? The House of Lords today is difficult to justify, but it works. This place has the attention span of a TikTok-addled teenager, as we jump to half-hourly news cycles driven by Twitter and rolling news.
My hon. Friend’s point is right, and I thank him for it. We walk through the Division lobbies, directed by the Whips, often having had no time, because of the impossible juggling act, to develop real knowledge of the topic in question or to think through properly the implications. Some of the stuff that leaves this place with a massive majority might have well been written in crayon. Thank God for the other place. Do not remove long-serving public servants and outstanding legislators. Do not pick at the threads of our constitution. The other place is one of the parts of our constitution which works best. We should retain Lords amendment 1 and 8. I talked of a tension, a conflict in my thinking. I have tried to articulate a deeply conservative instinct, but I also feel excitement, as I will explain. My view is that the British state is way off course, dangerously off course. It needs deep and radical change. To take one issue, immigration, almost nothing is now too radical to consider. Whether we look at the asylum system or legal migration, the radical change that the country needs will be of significant scale. None of that will be possible in the Blairite constitutional straitjacket that is at direct odds with our historic constitution.
That is the tension that I am trying to bring out. Who would seek to frustrate such an agenda—the Lords might, in their current form. I find it exciting—and this is a warning—that a majority in this House, gained from 33.7% of the vote on a 59.7% turnout, which is almost exactly 20% of the adults in this country, can remove their opposition from the other place. Labour Members may not agree with the hereditary principle, but who else does not get elected in the other place and cannot be removed by elections? It is the life peers. I say honestly, the lack of respect you might have for a millennia-old principle, I have for a lot of the backgrounds—
Thank you, Madam Deputy Speaker. The point I am trying to make to those on the Government Benches is that if a Government can expel their political opponents from the other place because the majority in this place says they are not elected, while placing no limit on the Prime Minister’s patronage, so can a new Government—so take the compromise. Be careful what you wish for.
I completely disagree with what the Solicitor General has said about the previous Government’s record in this area, and it is a bit rich in view of her Government’s record over the past 12 months. Reports reveal that Ministers will soon replace immigration judges with professionally trained adjudicators. We are told that is to tackle the 51,000 case appeal backlog, which will of course involve cases of people smugglers. Can she please confirm how long it will take to put that in place and whether it will require primary legislation?
Figures are going up and up and up, and the Solicitor General knows that. Can she confirm who these adjudicators will be—it would be lovely if she would answer the question—and will existing first-tier tribunal judges of the immigration and asylum chamber be eligible to apply?
After the elephant in the room that is the farm-destroying family farm tax, the No. 1 issue that is raised with me by Mid Buckinghamshire farmers—not least at the Bucks county show last week—is the uncertainty over the future of the SFI. I do not think it is going to cut it with farmers to say that further details will be provided in due course. They need certainty and they need it now, so will the Minister come to the Dispatch Box and put a firm date on when farms will have that certainty, as well as assuring them that the new SFI will have food production at its heart?