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Pensions Bill

My Lords, I beg both noble Lords’ pardon. I have never had so much trouble in trying to persuade the Government to act in their own interests and to prevent the kind of expensive errors that can cost the taxpayer dear and harm the public. I think that I am semi-encouraged by what the Leader of the House said a moment ago—that the Government are ““thinking”” about post-legislative scrutiny. That is better, given that they have previously rejected it out of hand. We need a little bit of form, as I am sure the Minister would agree. We now accept the case for pre-legislative scrutiny of proposed legislation before it is introduced and we accept that it can be of immense value. It enables some of the issues that might otherwise cause problems to be hammered out beforehand, and it can produce better legislation. But that is only half of the problem. The other half is what actually happens after legislation is passed. Have its intentions been carried out? Have new problems arisen that have not been foreseen? That is why post-legislative scrutiny is important. In my experience, major problems have arisen in pensions legislation, and they have arisen here. The legislation may be clear enough, but its implementation can fall down. I give two examples of that. The first is my own piece of legislation, the Social Security Act 1986. Among its provisions was a measure, now accepted by this Government, to reduce the maximum amount of SERPS that widows or widowers could inherit on the death of their spouse. We postponed the start date for 14 years to 2000, so that people could prepare for the change. As Secretary of State, I issued a leaflet after enactment which everyone agreed correctly set out the change. My then Minister of State, John Major, promised a major publicity campaign to inform everyone of the change, even more than they had been informed by the debates on the legislation. After the 1987 election, we both left the Department of Health and Social Security. There was no major publicity campaign, which John Major had promised; even worse, the department issued a leaflet that was wrong. The department’s leaflet, NP32, wrongly stated that a widow could inherit the whole of her late husband’s pension. The error was not discovered until 1995—interestingly, in a debate in this Chamber and I pay tribute to the noble Baroness, Lady Gould. The error was entirely administrative—that is admitted. Rachel Lomax, who became permanent secretary at the Department of Social Security, explained the reasons to the House of Commons Public Accounts Committee. She said: "““What I am saying is that when Bills are going through the House and Ministers are tremendously engaged in something and there is a big presentational task to be done, you get the attention of the top people in the Department and this great clustering of officials you talk about. Regrettably, when it comes to disseminating that sort of information in technical leaflets, you do not””." She added: "““I do think that is the fundamental problem here. Nobody actually looks from the policy, the concept, right down to when it hits the customer””." These were not the words of a politician but of a leading civil servant in Whitehall, and anyone with government experience knows exactly what can happen in the government machine. How would post-legislative scrutiny have helped? First, any scrutiny of that kind would look at the proceedings of Parliament—at what Ministers have actually said, particularly when they are giving assurances on what will happen. They would have spotted that John Major’s assurance of a major publicity campaign was not being carried out. Equally, any scrutiny would have examined the leaflets issued. They might also have looked at what was happening in the marketplace where some unscrupulous or ill informed insurance salesmen succeeded in persuading people to leave good final-salary schemes for contributory schemes. That takes me to my second example, which was discussed at length earlier in our proceedings. I refer to a range of people who claimed that they had been misled into joining occupational pension schemes that then folded. That was examined by the Parliamentary Ombudsman. I do not want to go into the detail of that case, which has been well rehearsed, and to which we will doubtless return. The first of the three findings on the maladministration said that, "““official information—about the security that members of final salary occupational pension schemes could expect from the MFR””—" the minimum funding requirement— "““provided by the bodies under investigation—was sometimes inaccurate, often incomplete, largely inconsistent and therefore potentially misleading, and that this constituted maladministration””." That was a case and the advice given stretched from 1995 to 2004. It is also possible that the kind of post-legislative scrutiny that I am advocating in this amendment could have prevented at least some of the advice being given in the terms that it was, which would have been a saving to the public Exchequer and would have benefited the public greatly. It should be remembered that errors in pensions can cost many millions of pounds either in savings forgone or in compensation. That is why it is in the interests of any Government to allow sensible measures of post-legislative scrutiny. I support post-legislative scrutiny, as indeed does the Law Commission, of all Acts of Parliament. Ministers may not always like the result of such scrutiny—I see that—for it may reveal mistakes in implementation, but the sooner mistakes are picked up the better and less costly the whole process will be. Nowhere is that more important than in pensions legislation where mistakes can cost so much. The amendment would give the Government maximum flexibility. I emphasise that; we are not advocating an expensive course. The Government Front Bench and my own Front Bench should note that we are not talking about an independent commission, which cost £1.5 billion, corrected to £1.5 million last week by the Minister. We want independent scrutiny; there is no point in doing it unless it is independent. The most obvious course is for it to be carried out by a Select Committee—whether joint or of only one House—or some other form of parliamentary committee. We are not asking that all issues should be debated again. We are concerned to ensure that the intention and declared aim of the legislation is being implemented. That is what the amendment is all about. If passed, it would be attached to this Bill, although as I said, there is a case for attaching it to all Bills. It would certainly be attached to the next Bill on pensions, which we know will follow. This Bill has important provisions in a whole range of areas, including the uprating of the state pension, an increase in the state pension age, preparations for the personal accounts scheme and the delivery authority. No one can argue that this is insignificant legislation; it is very important legislation and it is very important that we get it right. One further and final good reason for taking the step set out in the amendment. The new Prime Minister wants the role of Parliament restored. I agree wholly with that aim. This measure would take us a further step down that road. I beg to move.