Guy Opperman: We are making your pension safer, better and greener. Here’s how.

7 Oct

Guy Opperman is the Minister for Pensions and Financial Inclusion, and is MP for Tynedale and Ponteland.

Over the past decade, Britain has made great progress in boosting pension power and delivering better outcomes for savers.

The introduction of automatic enrolment in 2012 is undoubtedly one of the greatest long-term policy success stories of the Coalition Government, which has now been taken forward by this Conservative Government. More than 10.5 million employees are auto-enrolled into a workplace pension, saving eight per cent a year.

Today, our Pension Schemes Bill returns to the Commons, after clearing the Lords earlier this year. It is a Bill that delivers pensions for the next decade. It will make your pension safer, better and greener. This is how: 

Safer  

Pensions are a life asset, built up over decades. When we save for a pension, we expect that money to be there for us in retirement.

This Bill cracks down on the callous crooks who put people’s pensions at risk through their reckless behaviour. In future, reckless bosses who plunder people’s pension pots to line their own pockets will go to prison.

We have all heard the stories of cruel pension scams, too. I don’t like to call these crooks scammers, because they are thieves who rob victims of their hard-earned savings. Last year, we banned pension cold calling, but this new Pension Schemes Bill strengthens the powers of the Pensions Regulator to prevent scams happening, making your pension safer.

Better  

If you’ve ever tried to check how much you have saved for retirement, it can often involve emptying out draws in the hunt for lost paperwork.

Thirty years ago, many of us had just two or three jobs throughout our entire lifetime. Research shows the average millennial now expects to have an average of 12 jobs, and with auto-enrolment meaning more of us are saving for retirement than ever before, keeping track of pension pots from multiple employers can be tricky.

The Pensions Dashboard aims to change that by creating one single place – just like any other app on your phone – to see all your pension pots.

Dashboards will unite billions of pounds in lost, unclaimed pensions with their rightful owners, and users will be able to clearly see how much they have saved through information that is easy to access and understand.

Privacy is crucial, so dashboards put you in control. You can decide how and when your data is accessed, and who has access to it. This new technology puts consumers in control, and undoubtedly makes your pension better.

Greener  

The 2019 Conservative manifesto pledged to get Britain to Net Zero by 2050. As the Prime Minister made clear yesterday in his brilliant conference speech, we can do it with investment in clean energy solutions, like wind, solar, and hydrogen.

With trillions in assets under management, our pensions have a crucial role to play.

When you save into a pension, your provider invests that money to provide long-term returns on your savings. If your savings are invested sustainably and ethically in green infrastructure and new technologies, your pension can play its part in getting Britain to net-zero. The evidence is also clear that this still ensures a safe and good return on your investment.

Last year, I introduced new Environmental, Social and Governance regulations – ESG. These require pension funds to take due account of climate risk when making investment decisions.

This Bill goes one step further, requiring pension schemes to take the Government’s Net Zero targets into account, as well as the goals of the Paris Agreement. This helps manage climate risk. and makes sure you know if your pension is invested sustainably.

Some have argued that we should simply divest pension funds away from high-carbon stocks. I am afraid this is a fundamentally flawed idea. Selling assets to others without the same environmental concerns is unproductive and will do nothing whatsoever to get Britain to Net Zero.

Instead, a partnership with business is the way forward, so we can deliver the innovative change required. By investing in the right assets, trustees can nudge, cajole and vote firms towards lower-carbon business practices.

I have seen this in practice across the country. Since last year’s general election, I’ve visited inspiring businesses and innovative organisations that are helping lead us to Net Zero.  I met with BP and visited their solar farm in Angus to see how their organisation is evolving from an oil and gas company to a modern sustainable energy company. I’ve also had the opportunity to see how the team from Logan Energy is making hydrogen commercial, working to transform energy systems across the country, including in Teesside under the leadership of its Mayor, Ben Houchen.

The Pension Schemes Bill will transform our pensions system for decades to come, by cracking down on bad pension bosses, utilising new technology to put the consumer in charge, and making sure pensions are playing their part in getting Britain to get to Net Zero. I hope the Bill gets widespread cross-party support from across the Commons at Second Reading later today.

Shaun Bailey: We can’t let London grind to a halt

23 Sep

Shaun Bailey is a member of the London Assembly and the Conservative candidate for Mayor of London.

Remember the days when London’s transport network led the world? It wasn’t that long ago. Look back to before Sadiq Khan and you see what we used to be capable of. When Boris Johnson was the Mayor of London, we signed off Crossrail 1. We started planning Crossrail 2. We got Boris bikes. We rolled the Overground out to more areas than ever. And we had a congestion charge that raised money without being extreme.

How times have changed. Now we’ve got a Mayor who spent four years managing Transport for London so inefficiently that he had to be bailed out by the government. He let TfL debt rise to a historic £13 billion. He hiked the congestion charge to £15 and extended it to seven days a week. He came into office with Crossrail on time and on budget, but managed to delay it and increase its cost. And he has allowed countless bridges to close, turning journeys across the river into Homeric odysseys, as our former Mayor might have said. These days the only way our transport system leads the world is in headlines about how London’s bridges are falling down.

It’s incredibly disappointing. Forget about the rest of the world — our transport system is what makes this city possible. It’s how businesses get around but it’s also how we see family and friends. That’s why I believe Londoners have the right to an efficient transport system. And I believe it’s the Mayor’s responsibility to deliver it. So I can’t understand why Sadiq Khan has let our transport network fall into its current state.

I don’t buy the narrative that failure is inevitable. After all, it’s not like we’ve seen these transport failures in other parts of the country. Far from it. Conservative mayors like Andy Street and Ben Houchen are setting a great example for London, something our Mayor should take note of.

Andy Street, the Mayor of the West Midlands, is pioneering a Metro system and opening new stations in Coventry and Wolverhampton. Ben Houchen, the Mayor of the Tees Valley, saved the local airport from closure and helped bring new investment into the region. They are doing exactly what Conservative mayors always do: working with business and government to deliver improvements in people’s lives.

Recently, Greg Hands and I had to take some of Khan’s job description into our own hands. When Hammersmith Bridge was closed yet again, Khan refused to take responsibility yet again. But the consequences were too great for us to ignore. Residents faced three-hour bus rides just to get across the river. Emergency services struggled to respond to call-outs. Businesses were reporting that trade was down between 30 per cent and 40 per cent.

So together, Greg and I asked the government to intervene and take over Hammersmith Bridge. And we are hugely grateful that the government listened. Grant Shapps, the Transport Secretary, bailed out Sadiq Khan by taking over the bridge and funding the repairs.

But even though Grant Shapps did the right thing, it should never have come to this. As the Mayor of London, I’ll make it my priority to get TfL’s finances back in order. I’ll cut waste, end inflated executive pay, and provide the leadership TfL needs. That way, Londoners will have a transport network fit for a global city — and we can start to lead the world once again.

Andrew Carter: Devolving responsibilities to our town halls must also mean devolving money

22 Sep

Andrew Carter is Chief Executive of Centre for Cities, who have published a new report Levelling Up Local Government in England

Last year, the Conservative election manifesto pledged to deliver a system of full English devolution and, as I understand it, the Government is now finalising these plans in a white paper due to be published this autumn.

Reform of England’s complicated local government structures is long overdue. There are currently 349 district, county, unitary, and combined authorities in England, as well as the Greater London Authority, many with overlapping responsibilities and competing interests.

Nottingham, for example, has nine separate councils, all with responsibilities for local planning and economic development in their part of the city. The seven district councils have responsibility for new housing, but then the two county councils are charged with delivering the transport infrastructure that new homes need. This bureaucratic arrangement makes joined-up long-term strategic decision making about Nottingham’s future much more difficult than it needs to be.

Additionally, many smaller district councils have neither the capacity nor the political will to deliver the large-scale housing and infrastructure projects needed to level up their areas, and the financial challenges of maintaining this patchwork system are increasing every year.

But the problems in English local government are about more than just function and finance. There is also a democratic deficit, with little public awareness or understanding of councils’ roles. Back in 2012, just eight per cent of people could name their local council leader, and I doubt this figure has improved much since then.

And a system in which a council leader is also a local ward councillor directly answerable to only to a tiny electorate makes it difficult for them to balance their voters’ priorities with their duty to the wider area. This means that hyper-local issues can crowd out the long-term planning and investment that an area needs.

The current system is the product of decades of political compromise and piecemeal reform, but it’s having a damaging effect on the places that the Prime Minister has promised to level up, many of which have been hit harder economically by the Covid-19 pandemic than more affluent areas. We can’t keep tinkering around the edges – only wholescale reform will work now.

First, England’s existing 349 councils should be reduced down to 69 new, larger unitary and combined authorities that mirror as much as possible the economic areas in which people live and work. This would make joined-up strategic decision-making far easier.

When I make this argument, people often stress the importance of ensuring that historic or cultural boundaries are reflected in local government. I have two points to make on this: First, civic identity is not determined by local authority boundaries; it is possible to celebrate civic identity while having council boundaries that reflect the area over which people live and work.  And second, as our proposals show, it is possible to create a new system that aligns political and economic geography whilst respecting existing historic county boundaries.

Second, the leader-and-cabinet model for local government should be scrapped and the 69 new authorities should be headed by a directly-elected political figure. In cities and large towns they should be called a mayor, in rural areas they could have a more appropriate name. But whatever they are called they should be given the mandate, powers, and resources to improve the lives of people living and in working in them.

Responsibility for key areas of the levelling up agenda such as housing delivery, infrastructure, management of public transport, and adult education provision should all be moved out of Whitehall and put in the hands of the new leaders and their authorities.  The relevant government departments – Business, Transport, Education – could then be shrunk to reflect their smaller roles and the Ministry for Housing, Communities and Local Government could be transformed into an England Office similar to the Scotland, Wales, and Northern Ireland Offices and, like in the devolved nations, be given responsibility for managing England’s devolution deals.

This simpler system, with a directly elected political leader, will begin to address the lack of public engagement in local politics. Though less than one in ten people nationally can name their council leader, in the Tees Valley, 40 per cent of people know the directly elected Conservative mayor, Ben Houchan, and they can name a policy achievement of his.

But it would be disingenuous to restructure local government and give it extra powers and responsibilities, without also providing it with the funding it needs to make good on these extra responsibilities. Devolving control over how local business rates, council tax, and charges are raised and spent, and giving greater discretion to councils on how they manage their budgets would give them the freedom and incentives they need to drive forward improvements in their areas – and would be a welcome relief after a decade of local government austerity.

Opponents of what I’m proposing will tell you that, despite its flaws, the current system works; and perhaps on a purely functional day-to-day level it does. But we should be asking ourselves what we want from local government in the future, particularly in light of the Covid-19 crisis.  Should it just be emptying bins and collecting library fines? Or should it be applying its deep understanding of England’s cities, towns, and counties to deliver the levelling up agenda? I would argue it’s the latter, and I hope that ministers writing the devolution white paper, agree with me.