My Lords, this amendment, which is a reprise of something that we debated in Committee, derives from a peculiarity of the process through which this Bill has gone, in that many of the measures in the Bill derive from negotiation between the trades unions, other interested parties and the Government. Having reached agreement, the Government’s side seems to appear in the Bill but the assurances given to the other side in the negotiations do not. What we have instead is simply a continuous series of government assurances.
This amendment requires that a defined benefit scheme should be replaced with a defined benefit scheme. This reinforces the Government’s oft-repeated commitment to maintaining the defined benefit structure once the definition of the defined benefit has been changed, in the way that was proposed by my noble friend Lord Hutton. However, Clause 8 still provides that any scheme, once closed, can be replaced by,
“a scheme of any other description”.
Those are the exact words. As I said just now, the Government have continuously sought to give assurance that they would not replace a defined benefit scheme by anything other than a new defined benefit scheme but they have proved peculiarly reluctant to place such a condition in the Bill. This persistent reluctance is becoming quite disturbing and is significantly undermining the confidence of pension scheme members that their rights are going to be protected in the ways that have been suggested.
As I pointed out in Committee, the noble Lord, Lord Newby, further undermined the confidence of members when he said on 19 December that,
“although the Government have absolutely no intention to change the basis of the schemes, it makes sense for a piece of legislation, which we hope has a long life itself, to allow flexibility in the future if there are unforeseen changes”.—[Official Report, 19/12/12; col. 1585.]
Therefore, the Government are making a commitment: they continuously assure members that they will replace defined benefit schemes only with newly constructed defined benefit schemes—but, on the other hand, perhaps unforeseen circumstances mean that they will not.
I feel it is appropriate that the Government keep their side of the deal, which was that the defined benefit schemes would move from a final salary scheme to a salary-averaging scheme, which was a deterioration in the future pension benefits available to scheme members. They accepted that because the other side of the deal was that the Government said that they would commit not to move away from defined benefits. The Minister really has to tell us why the Government are so reluctant to keep their side of the deal. I beg to move.