Pensions Bill

I join others in congratulating those in the other place on all their hard work. I especially congratulate my colleagues, Lord Oakeshott, Lord Kirkwood and Lord Thomas, and hon. Members here on the work they have done on a mammoth Bill, which is now coming to a close. In her opening remarks, the Minister rightly commented on how, during the passage of the Bill, we have maintained a broad consensus, which is important for stability and long-term development. This group of amendments— 101 are included, the majority of which the Government introduced—shows that many of the issues and concerns raised during the Bill's consideration here and in the other place have been listened to, and I welcome that. As the hon. Member for Eastbourne (Mr. Waterson) said, auto-enrolment is the key to the success of the scheme. We are talking about between 4 million and 7 million people being enrolled, and upwards of £170 billion being invested. That is investment of a size and order considerably larger than what has been achieved in other pension schemes. It is a mammoth task, and ensuring that auto-enrolment is made straight-forward and effective is going to be the key to the success of the scheme. Amendments Nos. 9, 10, 11, 13 and 14 clarify the fact that re-enrolment will not apply if a job holder stops saving or opts out within a prescribed period before re-enrolment is due. The amendments set out the timings in more detail. Although we see their necessity, I say to the Minister that we do not want to go down the New Zealand route. It has seen a 30 per cent. drop-out rate on the quick saver scheme. Auto-enrolment is crucial to the Bill's success and we need to ensure that the Government support employers as much as possible to ensure that re-enrolment is a consistent policy. I agree with the hon. Member for Eastbourne about auto-enrolment for workplace pension schemes. That element was missing from the pre-Budget report statement yesterday, and I hope that the Minister, when she responds, will give us some idea of when, or if, the Government are considering bringing the date forward. Given the amount of work that has to be undertaken to set up the scheme, the more of the other things that we can get done earlier, and the more we can encourage people in existing schemes to auto-enrol, the better. I am pleased that the Minister has said that she accepts amendments Nos. 23, 24 and 25, which deal with the value of the earnings threshold and ensure that it does not fall behind the increases in the level of earnings. That is critical to the success of the Bill and to ensuring that people have a pension commensurate with what they need to live on when they retire. We know what has happened to the state pension. The Government have not given a commitment to restore the earnings link by a set date, and as a result many pensioners are in poverty or are having to apply for pensioner credit. If we are to have a scheme, it is far more preferable to ensure that it keeps up to date with increases in earnings. That is critical. I hope that the Minister will say when she is going to restore the earnings link to the state pension. That measure could have been introduced in the pre-Budget report. I congratulate the Government on what they have done in amendments Nos. 5, 7, 13, 16, 21, 30, 31, 55 and 134 to permit workplace personal pensions to be used for auto-enrolment. When the Bill was discussed earlier in this House, the major concern was that the auto-enrolment of workplace pensions could have been outlawed by two EU directives. Again, I am grateful for the work that the Department has done to ensure that that is not the case and that the auto-enrolment of workplace pension schemes can continue. We support the Conservatives in their amendment (a), which stands in the name of the hon. Member for Eastbourne, to Lords amendment No. 57. We are grateful that the Government accepted Lords amendment No. 57, because it is vital that existing schemes and the duties placed on employers are made as easy as possible. Having a self-certification scheme that does not set unnecessary conditions is critical to the retention of those existing schemes. We have made the point all along that we did not want the Bill to be used as a levelling-down exercise for existing pension schemes, and the amendment would at least ensure a mechanism that would enable employers to comply with their duties satisfactorily. However, the Minister said that she had agreed with stakeholders that there was going to be a review in 2017. I accept that. However, in the other place, Baroness Noakes questioned the need to allow the Secretary of State automatically to sweep the provision away. She did not receive a satisfactory answer, so I hope that the Minister will give us one today. Our view is that if such a major change—one that could affect existing pension schemes—is to be contemplated, it should be the subject of primary legislation. So far, the Government have taken all the various groups with them—stakeholders and the parties in this place. I would not want the change made possible by Lords amendment No. 57 as drafted to be made, so I hope that the Minister will reconsider her position. It is not a pressing issue—the Government will not fall if amendment (a) is accepted and it will not materially change the workings of the Bill—but in the long term, people would be given the satisfaction of being listened to. Lords amendment No. 159 deals with the director of a corporate body not counting as a worker. Again, that seems to be a sensible amendment and we support it.