My Lords, I fully appreciate that the noble Baroness is trying to ensure that consumers are properly protected and have confidence in the dashboard infrastructure. Indeed, an aspect of this is the need for robust supervision, and I share her belief that it is important to make clear who will be responsible for oversight of the different aspects of the infrastructure. I do not think that much divides the noble Baroness and me on the objective to be achieved.
I recognise the need for a strong supervisory and regulatory regime for dashboard providers. I also agree with the thoughts expressed by many noble Lords at Second Reading about a new regulated activity being key to maintaining public confidence in dashboards. As I explained earlier, we intend to do this by amending the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001.This will bring the provision of a qualifying dashboard service within the regulatory remit of the Financial Conduct Authority. Unauthorised firms will neither be able to connect to the supporting infrastructure nor be able to provide a dashboard service.
Once the amendment to the order has been made, the regulatory framework for the activity will be proposed in the FCA’s public consultation on the corresponding handbook rules and guidance. This will allow the public and the industry a chance to comment. The FCA must have regard to any representations made to it during the consultation period. This framework can be used to set out any expectations regarding the behaviour of dashboard providers and, in this way, will supplement any conditions imposed on dashboard providers set out in regulations. I would argue that this is where we dot the “i”s and cross the “t”s, as the noble Baroness put it.
I note that the amendment also refers to revenue generated by both dashboard providers and third parties. It might not be necessary for me to do so but I want to
reassure the Committee that all qualifying dashboard services, like the dashboard provided by the Money and Pension Service, will not be allowed to charge simply for consumers to see their own information. The provision of financial services and products by firms that are dashboard providers will remain subject to FCA regulation. Fundamentally, our aim in allowing multiple dashboards is only to give customers more options in accessing their information, not different information.
The mention of information should remind us that pension information is the lifeblood of a sustainable dashboard. Dashboards will work within the existing framework established by the general data protection regulation and the Data Protection Act 2018. Dashboard providers will be subject to penalties under these laws should they fail to meet required standards of consumer and data protection. One of the key principles in the design of the dashboard is that the individual will always be in control over who has access to their data. Qualifying dashboard service providers will not be able to see information about the individual’s pension rights.
The responsibility for the provision of accurate data falls on pension schemes. The Pensions Regulator will be responsible for ensuring occupational pension schemes’ compliance with requirements. The FCA will regulate personal and stakeholder pension schemes. Enforcement options, including fines, will be among the tools available to the regulators if requirements are not met.
The role of these regulators will be complemented by the Money and Pensions Service, which will establish and maintain the dashboard infrastructure. While it will not act as a regulator, it will work with the regulators to enable their compliance activity. It is also obliged, as part of its consumer protection function under the Financial Guidance and Claims Act, to report to the FCA where regulated persons are behaving in a manner detrimental to customers.
That leads me to the issue of redress. If an individual wishes to seek redress, any queries around possible incorrect information should be directed to the scheme in the first instance. Schemes are already required to have dispute resolution processes. To come back to a question asked earlier by the noble Baroness, Lady Sherlock, if people are not satisfied with the outcome of the internal dispute resolution procedure, they can take their case to the relevant ombudsman.
The amendment covers the need for regulations around assumptions, projections and comparison of costs and charges. I reiterate that we expect that the initial information provided on dashboards will be simple in the first phase. Adding further information, such as projected pension income and costs and charges, requires consideration on the delivery and consumer protection aspects of these proposals, as we have discussed. I am not ruling out the possibility of including such information, but the industry delivery group should be allowed to consider the implications fully and make its recommendations. To commit to regulations around possible assumptions and comparisons before then would be premature.
Of course, as the noble Baroness will be aware, individuals can already access information on costs and charges. The DWP has consulted on simpler annual benefits statements; the noble Baroness may like to know that it will publish a response on that subject in the spring. The consultation looks at the presentation of costs and charges and how projections are calculated. It acknowledged the crucial need for simpler statements to be consistent with the work on dashboards. We will consider how insights from the consultation can be incorporated into dashboards.
The noble Baronesses, Lady Drake and Lady Sherlock, emphasised the need for adequate consumer representation. The Money and Pensions Service has brought together an industry delivery group whose job it is to ensure that the design of pensions dashboards is informed by industry experts and consumer groups. Membership of its steering group was announced in September last year. It includes a strong representation of consumer groups, including representation from Which? and an independent representative with significant experience in consumer protection. There will also be opportunities for other consumer representatives to take part in working groups, which will help to ensure that the final design is on what information and features consumers value.
The noble Lord, Lord Sharkey, asked specifically about the need to include advertising on a dashboard. I can do no other than refer back to my earlier points. Rules on advertising are as those around any other incremental addition to the dashboard, and rules on the parameters around the use of data will be looked at very carefully. They will be developed by the Government in conjunction with the FCA, which will work with industry and consumer representatives on the delivery group to make sure that if we go down that path, it is with our eyes open and with the risks minimised. We will of course consult on any rules surrounding that issue.
I hope that I have given sufficient reassurance around consumer protection to show that the dashboard infrastructure will build on existing regulatory frameworks. That, with the need to keep dashboards simple, means that while I understand the rationale of the amendment, I consider it unnecessary. I hope that, on reflection, the noble Baroness will feel that she is comfortable in withdrawing her amendment.