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Pensions Bill

My Lords, we on these Benches welcome and support Motion D1. I have said a few harsh words to the Minister already and I shall chide him a little on the last Motion but, on this one, we welcome the spirit of compromise. I particularly welcome the pragmatic way in which the Minister has discussed this issue with the noble Lord, Lord Skelmersdale and me. This is the House of Lords at its best, if I may say so. We have ended up with a sensible and realistic solution, though obviously backed up to some extent—to use the words of the noble Baroness, Lady Hollis—by a certain amount of menace. We welcome this outcome. It is clear from being repeated at various places in the Young review that instant annuitisation, or the rush to annuitise, is not on balance likely to be in the interests of most schemes or most scheme members. Halting the current annuitisation process will or should offer greater value for money. Indeed, it must make a lot of sense to think about having annuities purchased at the level of the entire FAS population. That makes the case even more strongly that we should probably roll the whole thing into a PPF-type arrangement. But that is for another discussion. Reading the Young review, I am concerned at how many schemes have annuitised already or are in the process of doing so. The Association of British Insurers has written to me and no doubt to others, making the point—with which I have much sympathy—that there is probably not much in the unclaimed assets argument. On the ABI’s positive ideas on improving the use of the FAS existing assets to improve better value for money, one thing that leading insurers could do is not to rush to enforce provisional arrangements when people are in the process of buying annuities. It is wise to stand back and take this window of review, and I hope that the ABI, whose two main members provide these annuities, will look at this very carefully. Even if people are well down the track of buying annuities, if they could put them on hold, that would be likely to be in the interests of members of those schemes. Having said all that, I welcome the Government’s movement on this and the amendment moved by the noble Lord, Lord Skelmersdale, and look forward to seeing it passed.