Lords Temper State Threats Bill; Capita Misses Pensions Deadline

High-Level Summary

The House of Lords scrutinised government policy across pensions access for the terminally ill, women’s participation in peace processes, university student finance, and NHS resilience to extreme heat. A Private Notice Question confirmed Capita missed its Civil Service Pension Scheme recovery deadline and set out remedial actions and support for affected pensioners. Peers took the National Security (State Threats) Bill from Committee to Third Reading in one day, adding protections for humanitarian activity and journalistic engagement and commissioning independent scrutiny of AI-related state threats; a move to criminalise wearing designated bodies’ insignia was defeated (Ayes 150, Noes 216). The House approved planning regulations establishing a national delegation scheme after a regret amendment was withdrawn, and heard a Statement on steel trade measures replacing the expiring safeguard to prevent dumping.

Detailed Summary

Pension Access Rules: Impact on Terminally Ill (Oral Question)

Baroness Martin of Brockley asked about the effect of private pension access rules on working‑age people with a terminal diagnosis. Lord Livermore outlined current Serious Ill Health Lump Sum rules and acknowledged scheme‑level barriers: “the Government recognise that the permissive nature of these rules means that individuals may experience varying hurdles to access … [we] will, therefore, now consider this issue in further detail”. He agreed the definition for terminal illness is “clearly outdated” and said the Government will review it and examine scheme access options. Peers raised interactions with benefits and the stress of inconsistent practice. The Minister highlighted faster access to five benefits for those nearing end of life—“personal independence payment; disability living allowance; attendance allowance; universal credit; and employment and support allowance”—and noted that, currently, serious ill‑health withdrawals are “tax‑free below the age of 75, up to a total sum of £1.073 million”. He also referenced financial education in schools and potential adult support via the Department for Business and Trade. No decisions were taken beyond the review commitment.

Women’s Representation in Peace Processes (Oral Question)

Responding to the Bishop of Gloucester, Baroness Chapman of Darlington said the Government is “firmly committed to the women, peace and security agenda” and has supported women’s participation in countries including Sudan, Colombia, Iraq, Myanmar, South Sudan, Syria and the Philippines. She added: “Processes that involve women are also more likely to be successful, and the peace that is secured is more likely to last”. On accountability for sexual violence in Sudan, she said the UK has “instigated and funded a fact‑finding mission” to enable accountability. On inclusivity, she stated: “For a peace process to be successful, it must be inclusive … and it should include women”. Addressing funding, she said: “We have protected the £7 million that we spend centrally on women, peace and security” despite wider aid pressures. No new policy changes were announced.

University Student Finance (Oral Question)

Baroness Smith of Malvern set out actions to improve student finance: “We are capping interest rates … [have] increased the plan 2 repayment threshold twice … future‑proofed maintenance loans, and we will be reintroducing maintenance grants in 2028”. She rejected a graduate tax, arguing it would raise upfront taxpayer costs and encourage graduates to move overseas. On course quality, she cited the Office for Students’ approach and recent data on returns, saying the Government will “prevent the expansion of those courses that are not providing the returns” and “legislate to do that” if necessary. She confirmed the student loan book stands at “£296 billion” and that fee‑cap increases will bring “an additional £6 billion over the next few years” into the sector. No divisions or immediate changes were recorded.

Extreme Heat: Resilience of NHS Infrastructure (Oral Question)

Baroness Merron said extreme heat poses “a serious risk to NHS buildings and services,” with all organisations required to have plans. She highlighted support to address critical estates risks “with £6.75 billion over nine years,” and that new hospitals and health centres will embed climate resilience in their design. She also cited investment of “£155 million in solar projects and £400 million in heat decarbonisation grants”. Responding to peers, she said funding targets overheating risks such as “broken chillers” and “outdated air‑handling units”, while acknowledging a substantial maintenance backlog—“some £15.9 billion is needed”. No new retrofitting mandates or workplace temperature limits were announced.

Civil Service Pension Scheme Administration (Private Notice Question)

Baroness Anderson of Stoke‑on‑Trent confirmed Capita missed its end‑June milestone: “Capita has completely failed to meet this milestone for all services”. She set out escalating measures, including independent technical audits and an on‑the‑ground remedial adviser, and said “we will not hesitate to take firm action for continued underperformance”. For affected members, transitional support loans were doubled to “£20,000” and an interest process on late pensions will apply from 1 December 2025 “based on Bank of England base rates plus 1%”. On wider contracting, she noted Capita meets “87% of its KPIs” across other contracts, while confirming an insourcing drive and that the Civil Service scheme is a “prime candidate for future insourcing once immediate operational stability is secured”. A further ministerial update in the Commons was promised.

National Security (State Threats) Bill – Committee

The Minister, Lord Hanson of Flint, confirmed that espionage is addressed under the National Security Act 2023, which “include[s] the offence of assisting a foreign intelligence service” and that this “has already proved invaluable in countering espionage”. He clarified that the foreign power condition can cover actions advancing a foreign power’s policy, including that of “the governing political party of a foreign Government”. On AI risks, the Government will “ask the Independent Reviewer of State Threats Legislation to expressly consider whether amendments to legislation are necessary” regarding foreign power threat activity. The Government accepted amendments adding a defence for “humanitarian activities” to new offences and to “expand the defence of ‘reasonable excuse’” for obtaining information (new Section 17C(7A)). A proposal to criminalise wearing or displaying designated bodies’ insignia was defeated on division (Ayes 150, Noes 216). The Minister said a passport‑seizure power recommended by the independent reviewer would be brought forward in future legislation, not this Bill.

Town and Country Planning (Discharge of Local Planning Authority Functions) (England) Regulations 2026 – Motion to Approve

Baroness Taylor of Stevenage introduced regulations creating a national scheme of delegation and capping planning committee size at 13 members, saying they will help committees “focus on the applications which really matter” and empower officers, without changing consultation rights. Applications are split between Schedule 1 (always officer‑determined) and Schedule 2 (presumption of delegation, with a gateway test by a nominated officer and member). She noted that “about 4% of applications actually go to committee now”, clarified that reserved matters linked to large outlines—“over 500 dwellings or 50,000 square metres”—fall into Schedule 2 and can be referred via the gateway test, with smaller reserved matters always delegated. After consultation, the cap was “raised … to 13 members”. A regret amendment was withdrawn and the Motion agreed.

Steel Trade Measure – Statement

A Statement set out a new tariff‑rate quota regime from 1 July, replacing the expiring safeguard. It introduces “a 50% out‑of‑quota tariff on imported steel,” with quotas focused on categories made in the UK. The total quota is “3.2 million metric tonnes,” a “21% uplift” on provisional volumes, and “nearly three‑quarters of UK steel imports by value” remain out of scope. A transitional arrangement covers contracts agreed before 14 March and imported between 1 July and 30 September. Peers queried specialist grades, energy costs and Northern Ireland. Lord Leong pointed to support via the British Industry Supercharger and committed to a 12‑month review, remaining “responsive to any significant changes”. He confirmed Northern Ireland arrangements, including EU TRQs and facilitations for intra‑UK movements, with HMRC guidance to follow. No division was taken.

National Security (State Threats) Bill – Report and Third Reading

Following Committee, Report and Third Reading were agreed without debate and the Bill passed with Lords amendments. The Minister thanked all sides and said that, on Royal Assent, “the Home Secretary will take urgent action to examine state threats and, if necessary, bring forward appropriate measures”.