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Pensions Bill

I added my name to my noble friend’s amendment because I support it. The Bill gives the Secretary of State enormous control over how the uprating formula is to be calculated. Almost my first words today related to precedents, as the noble Lord, Lord Oakeshott, will remember. Precedents may be good, bad or ugly. I understand that there is a precedent for this wording in the Social Security Administration Act 1992 and that the legislation governing the retail prices index and pension credit uses this wording. However, as my noble friend said, there has recently been a new precedent in the Employment Relations Act 1999, which uses the wording that my noble friend’s amendment lays out. I do not see why the benefits of being more precise in primary legislation, which is the fact in that Act, should not apply to this Bill too. I believe that the Government’s refusal to lay out the formulas and amounts for uprating is unnecessarily hindering attempts to restore trust in pensions and in the Government’s commitment to providing a more generous pension by uprating in line with earnings rather than prices. There are many ways in which the Secretary of State could use the current drafting to uprate pensions that, although technically correct, would be considered unduly stingy by most people. For example, questions of whether bonuses should be included or the wages of only a section of society, such as the private sector, will have a significant impact on the resulting numbers. The Minister will no doubt assure us that he intends to follow this or a similar formula anyway. However, if that is the case, why will he not consider putting a formula, such as the one in my noble friend’s amendment, in the Bill? I am sure that the magic word ““flexibility”” is about to spring from the Minister’s lips, but it is surely not appropriate in this situation, where numerous small changes to the method for calculating a pension will cause considerably more confusion and distrust than already exists. More importantly, it cannot be appropriate for two pieces of legislation that purport to do exactly the same thing to have totally different drafting.