---

Pensions Bill

I welcome a great deal of what is in the Bill, and I pay tribute to the extensive consultation that has taken place through Turner, discussion of the White Paper, the Select Committee and the all-party committees of this House. I pay particular tribute to the hon. Member for Birmingham, Selly Oak (Lynne Jones), whose all-party group on pensions consensus has contributed considerably to getting us where we are today. Having said all that, if I now say a few things that might be construed as slightly critical or ask awkward questions, I hope that I will not be accused of slagging off the Bill in the way that the hon. Member for Yeovil (Mr. Laws) did for nearly 45 minutes—only then to say that he was going to vote for it. Personal accounts are a good idea for all sorts of reasons. At the end of the day, they will encourage a savings culture, and I hope that the idea will eventually be built on in the same way as in Australia, for example. However, it will not suffer from the disadvantage of the Australian system, which is entirely compulsory. There is an opt out for those who may be advised—one hopes that generic advice, at the very least, will indeed be provided—that it would not pay them to enter into the system. The Bill has that element of flexibility, but it creates a structure that can be built on for the future, and it might mean that a lot of people will eventually be a good deal better off in retirement than they would otherwise be. The initial figures are in fact very modest. The total sum is about 8 per cent. of pay, which will not provide anybody with a realistic pension during their lifetime, so they will still be dependent on state support. However, it is a start, and, as such, a good thing. I am a little concerned about the possible impact on existing employer schemes. There is a danger that employers might trade down in terms of what they provide for their employees because of the existence of the new system, or that it might undermine the operation of some existing employer schemes. The personal accounts delivery authority will have to look at that issue very carefully. The personal accounts delivery authority will have a considerable role in, and influence on, the scheme’s design, but it is not entirely clear from the Bill as published what the precise objectives will be. Will they, for example, be the same as the objectives set out in the White Paper? How will the authority deal with investment strategy, and will it deal with generic or other advice for employees? Going beyond that, can the Minister explain why it is proposed that the authority, having finished its work, will hand it all over to a personal accounts board? Why will all the expertise built up in the authority be scrapped and handed over to somebody completely different? There must be a case for considering whether the board—the successor body—is in fact a natural evolution of the authority.