Dame Harriett Baldwin
MP for West Worcestershire · Conservative · United Kingdom
“I welcome the Chancellor to his new role. I paid close attention yesterday to the long speech he made to reset the narrative and drive growth Britain. In paying tribute to his predecessor, will he recognise that she left the highest tax burden on record? Instead of postponing the words he could utter to my hon.”
“I welcome the new Prime Minister to the Dispatch Box. I note that in his statement he referred to the biggest issues facing the country as being “the economy and the cost of living crisis”. Will he accept that one of the things that has damaged our economy and caused prices to be higher is the tax-and-spend Budget in November 2024?”
“Could the Leader of the House make a commitment that the new Chancellor of the Exchequer will come to the House on the first day we are back from recess?”
“With a stroke of his Whitehall pen, the Secretary of State has just abolished Malvern Hills district council, Worcester city council, wonderful Wychavon district council and Worcestershire county council. He said in his statement that this is about making “real improvements to people’s lives and…communities”.”
“In recent weeks in West Worcestershire, I have met local police and the police and crime commissioner; the police and crime commissioner is being abolished, and the police are being reorganised. I have met the local health commissioners; they are being reorganised, and Healthwatch is being abolished.”
“Will the Leader of the House confirm that, given that the other place is sitting next week, there is nothing to stop him tabling a business statement to enable this House to sit next week? Given the enormity of the events happening in the Government next week, does he not think that would be a good idea?”
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“The hon. Lady may be about to comment on this, and we live in hope that the wish of the right hon. and learned Member for Camberwell and Peckham (Ms Harman) that senior jobs in her party go to women will be granted soon. Does the hon. Lady welcome some of this good economic news for women?”
“Output per hour rose by 0.9% in the last quarter, and the Office for Budget Responsibility forecasts that productivity will pick up by 1.7% next year, and 2.4% in the year after that. The motion also questions our long-term commitment to science, technology and green growth.”
“That is exactly my point: they will be disproportionately helped by the increase in the national minimum wage through the national living wage from next year. The motion mentions productivity, and it was also raised by the hon. Member for Caerphilly (Wayne David), who is no longer in his place. Productivity has been a long-standing issue since well before 2010, and we accept that. But rather than grandstanding, we have set out a wide-ranging productivity plan. We are delivering the infrastructure projects we need, through our infrastructure pipeline, and we have set up the national infrastructure commission to take a long-term, depoliticised approach to major projects. We have seen a recent strengthening in productivity growth.”
“We agree that maintaining the science budget is incredibly important. As part of the £100 billion of infrastructure investment that we have already committed to, £6.9 billion will be going towards research infrastructure.”
“The hon. Gentleman will know, and has just reiterated, that we have maintained the science budget, which has been one of the choices that we have made. We have secured £7 billion of investment per year for UK-based renewable energy projects. We are investing in major research facilities such as the new Turing Institute, the UK’s national institute for data science. Our science and innovation strategy sets out our long-term vision for the sector’s contribution to national prosperity.”
“My hon. and learned Friend is right to highlight the effectiveness of our science spending. Earlier, she mentioned agri-tech, and my constituency has fantastic skills in cyber-security. Those are all important and we will continue to make sure that they are a Government priority.”
“Members to reject the economic views of the Labour party, to reject the advice of the shadow Chancellor and to reject the motion.”
“We know that businesses drive growth and create jobs, and we work with them so that they continue to do so. In marked contrast, the Labour party could not get a single business even to host an event with its leader last week. Is the economy perfect? No economy is ever perfect. We need to export more, work more productively and eliminate the gender pay gap altogether. It takes time for a country to recover from a significant economic crash, such as the one inflicted on us by the last Labour Government. But thanks to the hard work of the British people, the economy has recovered. We have more growth, more jobs and higher wages. We know that there is still much more to do, but there is no economic security, no national security and no opportunity when control of the public finances is lost. I urge hon.”
“I welcome the opportunity to clarify that there is no cap on inter-company transfers at tier 2 or on people who will earn a substantial amount. I am aware that Tech City keeps very close tabs on this and informs me about its importance. The hon. Gentleman will welcome its continued success in attracting investment from around the world. The motion also mentions the Department for Business, Innovation and Skills budget. I obviously cannot pre-empt what the Chancellor will say next week, but every single decision on spending has been based on our productivity plan to focus on world-beating productivity, to drive the next phase of our growth and to raise living standards. People should never underestimate this Government’s commitment to helping British businesses and workers succeed in the global economy.”
“It is a pleasure to serve under your chairmanship, Mr Betts. I am not quite sure what the sporting achievements mentioned earlier are, but I look forward to hearing about them.”
“I congratulate the hon. Member for Ross, Skye and Lochaber (Ian Blackford) on securing the debate and making a thoughtful, constructive contribution to our national debate on securing a guaranteed income for retirees. Perhaps I should not confess this, but if Wikipedia is correct, I am the one who should declare an interest as being closest to retirement age of all those speaking in the debate—but perhaps Wikipedia may not be accurate. That has happened before.”
“Against the background that I have set out, the Government introduced radical reforms giving people freedom and choice in how they access their own hard-earned retirement savings, replacing an effective obligation on pensioners to purchase an annuity—a product that often they did not shop around for and that may not have been right for their circumstances.”
“The hon. Gentleman wears it well. The debate is timely, because we are just over six months into the pension freedoms, and are beginning to get data on what pensioners or retirees have been doing with those freedoms, and about use of the free and impartial guidance from Pension Wise, which was set up by the Government. As we speak, life expectancy is growing by about five hours a day in this country, which makes it all the more important that we have this debate and agree on the aspiration to ensure that hard-working people are in a position to fund a comfortable and, we hope, increasingly lengthy retirement.”
“My hon. Friend is right; the world where we obliged people to buy an annuity income with their retirement savings was not perfect. Often they did not shop around—the data from the Financial Conduct Authority suggest that about eight out of 10 consumers could have got a better deal by shopping around—so I cannot agree with what I believe was SNP policy. That seems to be to end the current situation where there is more flexibility, and once again to require people to buy an annuity. However, I recognise that Members across the House have concerns about customers and how they are supported as they make perhaps their most important long-term financial decision, other than purchasing a home.”
“They include ensuring that there is no enforced retirement age at 65, and strengthening the first pillar of retirement income, the basic state pension, which now rises with a triple-lock—increasing by the greater of 2.5%, earnings or inflation every year. That has been very important cumulatively over the past five years—the income replacement of the state pension is now at its highest level since 1992—and we have pledged to continue that throughout this Parliament.”
“I thank the hon. Gentleman for that clarification. I agree that we need to evaluate the measures, which is why this is such a timely debate. It is extremely important that, as people take advantage of the new pension freedoms, they have the right information and the tools they need to make an informed and confident decision about their financial future. I recognise that there is a range of different circumstances and that one size does not fit all. It might be helpful if I summarise some of the changes made over the past five years to the pension landscape to strengthen the finances of people in retirement.”
“I will describe for the benefit of all hon. Members what we think success for the reforms looks like: a vibrant and competitive retirement income market with a range of different products that give people the flexibility and security that is right for them, and well informed, engaged consumers who can access the guidance and advice they need. As more people are automatically enrolled in employer schemes, more people engage with the process. More than 5 million more people are now saving for a retirement income than were in 2010, and by the full roll-out in a couple of years’ time, we will have almost 9 million additional new savers through automatic enrolment, saving £15 billion a year more in aggregate.”
“I assure the hon. Gentleman that I am just setting out the background. I will address the points that colleagues raised later in my speech. The changes we are making to simplify the state pension are also important, because they are going to set a new level for the state pension that is higher than the means-tested threshold that we have had in this country historically. That is very important, because we do not want those who draw down their retirement savings to be thrown on to means-tested benefits. I believe I am right in saying that that is a crucial difference from the situation in Australia. We have also safeguarded support for older people in other ways, such as providing free bus passes, eye tests, television licences and so on. The changes we made in April are an integral part of the whole landscape.”
“We will write to the Chair of the Work and Pensions Committee as soon as that happens so that he is the first to know. I have responded to most hon. Members’ points, but I will remain on my feet in case anyone feels that they have not had a chance to ask their question or to get one answered.”
“Moving on to women who have been affected by the change in pension age, I am probably one of the few women affected who actually welcomes the fact that I will be able to do this wonderful job for longer, but I realise that not everyone feels that way. To respond to the questions from the hon. Member for Torfaen about the number of meetings that have been held, the number of updates and the transition protection and his Hansard reference, which shows what an effective researcher he is—he is a published biographer—I will defer to my colleague Baroness Altman, who will write to him with the details. The hon. Member for Paisley and Renfrewshire South also asked about the Pension Wise data and when it will be published. In ministerial speak, I believe that the word is “shortly” so it should be up on the website soon.”
“Pension Wise also alerts customers to the risk of scams during guidance sessions and on its website, and firms have a duty to flag the risk of investment scams, when appropriate, to their members as part of the FCA’s retirement risk warning rules. The hon. Member for Paisley and Renfrewshire South, who asked me about this during a Work and Pensions Committee hearing, wanted to know about some of the numbers. So far this year, since the pension freedoms were launched, incidents reported to Action Fraud are lower than the year before, but I completely agree with her that we must remain on top of this. To be frank, we have to be tough, because one scam succeeding is one too many.”
“It is worth reiterating here how important it is that we remind consumers that they should never engage with anyone who telephones them out of the blue offering help with their pension. I encourage all hon. Members to get that message out widely in their communities. I emphasise that Pension Wise will never call without a consumer having previously asked them to. The pensions regulators have their own pension scam campaigns to raise awareness of the issue. The FCA runs ScamSmart and the Pensions Regulator runs Scorpion. Warnings are sent out with paperwork from pension providers and both of them give advice to businesses and consumers on how to protect against scams.”
“Pension scammers were previously trying to get people to take money out of their pensions before the age of 55, causing a lot of harm in the marketplace, but I agree that it is an important matter. Given that consumers have been given unprecedented freedom and choice in how they access their retirement savings, we appreciate that fraudsters will use that as an opportunity to try and exploit people. An effective strategy to target scams must bring together all the relevant parts of Government and work with providers to focus on both the prevention and the disruption of scams. That is what we are doing and will continue to do. We have set up Project Bloom, a multi-agency taskforce led by the National Crime Agency, which is joining up the various Departments involved, the regulators, anti-fraud groups and police forces to tackle scams.”
“We must ensure that we make the most of Pension Wise, which focuses on pension freedoms, the Money Advice Service, which focuses on some of the other aspects of financial markets, and the Pensions Advisory Service, which is run out of the Department for Work and Pensions. We must make those services more effective for consumers. Alongside the financial advice market review, we are also looking at the guidance and hope to have some findings ahead of next year’s Budget, so that people get the help they need to take such important long-term decisions. Several hon. Members mentioned scams, and the Work and Pensions Committee report also flagged that risk, which we recognise is not new.”
“The Treasury and the Financial Conduct Authority are reviewing what he called the advice gap—the fact that between guidance and paid-for financial advice, there is a gap for ordinary people who do not want to pay for a financial adviser or are not able to afford one at their stage in life. The aim of the review is to come up with a package of reforms, along the lines of those that the hon. Gentleman outlined, to ensure the financial advice market works for everybody. I hope he will write to the review with his recommendations. Advice, in and of itself, is not enough. It is important that we supplement our guidance provision and review it on an ongoing basis.”
“In the summer Budget, we opened it up to people from the age of 50 onwards, and we are developing more online tools for the website and calculators that people can use to see how the new pension freedoms relate to their particular circumstances. We are trying to make the website more interactive, and the team has done a fantastic job in delivering that to such a tight timeframe. We are looking to amend the content of Pension Wise appointments to ensure they are more tailored to people in the 50 to 55 age bracket, who are not yet able to take advantage of the pension freedoms but want to start thinking about the options available to them. The hon. Member for Torfaen (Nick Thomas-Symonds) rightly mentioned the financial advice market review. I am delighted to hear that he supports the initiative.”
“All in all, that is excellent news, but we are always on the lookout for ways to make the service more useful. Last month’s report from the Work and Pensions Committee, of which the hon. Member for Paisley and Renfrewshire South is a member, was welcome. It noted the progress we have already made in ensuring that the reforms deliver for consumers, but made it clear that the job is not yet done. In line with the Committee’s recommendations, we are considering a number of developments to make Pension Wise even more useful. For example, we are looking at how appointments can be tailored to individuals.”
“There have been more than 30,000 guidance appointments and 1.7 million hits on its website so far. Hon. Members alleged that only one in 10 people are making use of Pension Wise, but we dispute that in the sense that people will be getting financial advice, sometimes from a regulated adviser, or they may get information, guidance or advice through their provider. There is a range of different ways in which people can inform themselves; Pension Wise is one of them. It is free, impartial and backed by the Government. Pension Wise prompts users to consider their life expectancy and any health issues and lifestyle factors they have, and it links to the Office for National Statistics life expectancy calculator, which I am sure everyone in the room has visited.”
“The first six months will not necessarily be representative of the settled state of the market, because obviously there has been a lot of pent-up demand, but it is fair to say that in that six-month period £2.5 billion has been invested in income drawdown products and £2.2 billion in annuities. That does not suggest that people are shying away from the annuity market, which we hope continues to be successful and an important part of people’s retirement planning. I am delighted that so many people have already taken advantage of the freedoms and that many providers have stepped up to deliver for their members. Many hon. Members asked about Pension Wise, the Government’s free and impartial guidance service. It, too, is playing an important role.”
“In fact, providers have stepped up to the challenge: the systems requirements were admittedly very challenging, but more than 90% of people are now being offered flexibility within their existing scheme and something like a quarter of the largest firms are planning to launch new products in the next six months, so there has been real innovation and engagement with what customers want. We have moved away from the inflexibility of the old annuity market. The hon. Gentleman highlighted the recent data from the ABI stating that £4.7 billion was paid out in the first six months.”
“Methinks the hon. Gentleman is worrying too much. At this point, I think we will just welcome the fact that £15 billion a year more is going into pension saving in this country. The hon. Member for Paisley and Renfrewshire South (Mhairi Black) can say to her generation that the earlier they start, the better, given the cumulative impact of the wonders of compound interest. Nevertheless, I take on board the point the hon. Gentleman made. The hon. Gentleman said that providers may not have time to get ready and may not have the right kinds of products.”
“I am sure that, like me, the hon. Gentleman is a passionate feminist and thinks it important that men and women have the same pension age. I appreciate, however, that the process of transition from the much earlier age at which women were retiring will, depending on people’s circumstances, have posed a range of challenges, of which the Government are well aware. As a constituency MP, I am also well aware of such issues. I will write to the hon. Member for Torfaen and the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) with more specific points from my noble colleague. Shall I conclude with my impassioned concluding remarks, Mr Betts, or is everyone happy to stop there?”
“I will say something in conclusion as we have time. I thank all hon. Members who have participated in the debate. How people access an income in retirement is an incredibly important question. It is also an issue of huge international importance. I have summarised a range of changes that have been made over the past five years. The more recent pension freedoms are major changes and it is important that we get them right, which is why the Government and the regulator will continue actively to monitor the post-reform retirement landscape closely.”
“Question put and agreed to. Resolved, That this House calls on the Government to consider suspending the further sale of its shares in the Royal Bank of Scotland whilst it looks at alternative options; and believes that this should take place in the context of a wider review of the UK's financial sector and that such a review should consider the case for establishing new models of banking, including regional banks.”
“I pay tribute to the staff and pensioners of RBS, of whom he has 105 in his constituency. I have a wide range of points to make about the specific towns he mentioned, but in the interests of time it is probably better if I write to him. Today’s debate was very much on the future of the banking system and the importance of having a strong, healthy, diverse and competitive range of choices in our banking sector for customers and businesses. I recognise that the issues raised in the motion are extremely serious, but the Government cannot support its proposals. They run contrary to all the evidence presented to us. Instead, we will continue to put in place our long-term economic plan, which is bringing stability and competition to the UK banking sector and delivering a better deal for hard-working people across the country.”
“Member for Ross, Skye and Lochaber (Ian Blackford) that we think ring-fencing, separating the actions of retail banks from those of their investment banking colleagues, is an important part of strengthening the regulatory system. The hon. Member for Easington (Grahame M. Morris) mentioned the bonus culture. He will know that that was rampant under the previous Labour Government. It was brought very much under control under the previous Government, and that continues under this Government. He also said that we do not all want a state-owned bank run from Whitehall. I can only agree. The hon. Member for Caithness, Sutherland and Easter Ross (Dr Monaghan) made some important points, with which I have great deal of sympathy, about the bank branches in his very large and very rural constituency.”
“In the interests of time, I will respond to a few of the points made in the debate. On the FCA’s review of the Tomlinson report, which was mentioned by a number of colleagues, including my hon. Friends the Members for Hazel Grove (William Wragg) and for Aberconwy (Guto Bebb), my understanding is that the FCA review should be published between now and the end of the year. I will keep Parliament informed if I hear differently. A number of colleagues spoke favourably about the German banking system. It is worth noting, however, that the German banking system also required £70 billion of capital injection, as well as £100 billion of guarantees, during the financial crash. Colleagues mentioned a range of other important points. I can reassure the hon.”
“The financial services sector is now fundamentally stronger thanks to the Government’s reforms. A central part of the reforms has been to inject extra competition and choice into the banking sector, and specifically to help new challenger banks to enter the market. I mentioned already RBS’s process of divesting a new challenger bank, Williams & Glyn, but that is in addition to creating another eight challenger banks during the previous Parliament, including TSB, Metro, Virgin Money and Tesco Bank. During the election, we committed to ensuring 15 new banks would receive banking licences in the life of this Parliament. We are promoting competition between banks by boosting and helping to deliver the current account switch service. We have put competition at the heart of the regulatory system.”
“It was the Governor’s view that “public ownership has largely served its purpose” and that “it is in the public interest for the government to begin to return RBS to private ownership.” He went on to say “there could be considerable net costs to taxpayers of further delaying the start of the sale,” and that “Continued public ownership without a foreseeable end point runs risks, including limiting RBS’ future strategic options and continuing the perception that taxpayers bear responsibility for RBS’ losses.” The Governor added: “The Bank of England believes the interests of the people of the United Kingdom are best served by a vibrant, resilient and privately owned banking sector” and that “a phased return of RBS to private ownership would promote financial stability, a more competitive banking sector, and is in the interests of the wider economy.” A lot of Members mentioned competition and choice.”
“It has now set out its new strategy to focus on its core British business. As I mentioned, it committed to sell off more of its overseas business, simplify its operations, shrink its investment bank and use the additional capital to support the British economy. By the summer of this year, the strong progress RBS had made in implementing that plan had led us to a clear decision point. That is why, in July, the Chancellor sought the advice of the Governor of the Bank of England regarding the Government’s shareholding.”
“Lady was not a Member in the last Parliament, but I am sure she will recall that in June 2013 the Parliamentary Commission on Banking Standards, led by my right hon. Friend the Member for Chichester (Mr Tyrie), considered various options for dealing with the legacy of RBS as part of its wider review into the banking sector. Those included a radical restructuring of RBS and the creation of a number of regional banks. That option was dismissed by the Commission, which noted “how difficult, expensive and time-consuming it can be to separate integrated activities” of a bank. The PCBS recommended that the Government undertake a review into the option of splitting RBS into a good and bad bank, and we acted on that. In November 2013 following the publication of our findings, RBS set out plans for the creation of an internal “bad bank”.”
“Seven years on, despite starting the process of selling shares in the summer, the UK Government—and therefore taxpayers—still own 70% of Royal Bank of Scotland. The easiest thing would be to leave RBS in state hands and duck the difficult questions, but no one in this debate has argued that the situation we inherited in 2010, with large chunks of failing banks in taxpayer hands, is something that we should maintain for ever. The right thing to do for the strength of our economy and for taxpayers is to start selling off our stake as part of a phased disposal programme. That is part of our long-term economic plan to bring down national debt and secure a brighter future for hard-working people across the country. The hon.”
“It was only ever intended as a temporary privatisation to restore financial stability to our banking sector, and I remind colleagues that in 2008, Gordon Brown stated: “The Government will not be a permanent investor. Over time we intend to dispose of these investments in an orderly way”. RBS is very different now from how it was then, and it has been restructured to focus on banking in the UK. It has shrunk its investment bank, and it recently completed the disposal of its US business, Citizens. The creation, by carving out RBS branches in England and Wales and NatWest branches in Scotland, of the historic Williams & Glyn brand will mean 314 challenger branches—more than twice as many as recommended by the hon. Member for Edmonton.”
“I hope you will indulge me with a little time, Madam Deputy Speaker, to respond to a thoughtful and well-subscribed debate that has focused on the future of the banking system in this country. I congratulate the hon. Member for Edmonton (Kate Osamor) on suggesting this debate, and the Backbench Business Committee on securing time for it on the Floor of the House. The 15 contributions that we have heard highlight the importance and impact of our banking sector, and show how integral it is to our long-term economic plan. I assure the House that a key element of that plan is a strong, healthy, more competitive and diverse banking sector. When the Labour Government acquired RBS, it was the largest single bank bail-out in the world at more than £45 billion—the price that was paid is a matter of historical public record.”
“The Government are fully committed to implementing a robust and effective ring-fencing regime, and we remain firmly on track for the separation of banks by January 2019. We passed the last legislation implementing the Independent Commission on Banking ring-fencing recommendations this year, and the Prudential Regulation Authority is currently consulting on the second tranche of implementation rules before publishing the final rules this year.”
“Of course, the Government remain as committed as ever to implementing a robust ring-fencing regime, as recommended by the Independent Commission on Banking. Obviously, I am not going to comment on speculation about how individual banks would like to implement their ring-fencing rules, because that is a commercial decision for banks, as long as they remain compliant with the considerable restrictions imposed by the legislation. Their deadline is the start of 2019.”
“The Government are delighted that the UK recently, once again, topped the poll as the No. 1 location for a global financial centre. We believe that our legal system, language, geographical location and brilliant skilled workforce, and many other factors, contribute to this being an excellent place to locate a global financial services firm.”
“The hon. Lady will be aware that we are in the process of considering how we implement the fourth anti-money-laundering directive. We will be looking closely at the evidence, and I encourage her to get in touch with me.”
“I beg to move, That the Committee has considered the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 3) Order 2015.”
“The most significant of those is to ensure that mortgages dating from before 31 October 2004 that are currently regulated as credit agreements will be regulated as mortgages from 31 March 2016. That is part of the Government’s widely supported aim to consolidate the regulation of mortgages within a single framework, reducing the burden on firms and ensuring that customers get a consistent experience. Taken together, these statutory instruments are another important step in ensuring that the UK’s financial system is resilient and works for the good of the nation. I hope hon. Members will therefore approve them.”