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Pensions Bill

It is disappointing again to hear a Labour Member trying to divert attention from what are, as the Secretary of State rightly pointed out, serious issues relating to a serious Bill. A number of important technical aspects of these reforms also need to be debated in detail, and I hope that Ministers will be ready to listen to sensible advice on them. We know that this Bill has been rushed into the House for entirely unrelated parliamentary reasons, and, as a result, too many details remain unresolved and too many clauses leave most of the important elements to subsequent regulations. We will need a lot more information as it is considered in Committee. Let us take the example of lump-sum contributions to personal accounts. Many groups are arguing that people who save in personal accounts should be able to make one-off contributions to them. I understand the logic of, for example, allowing people who take a career break to make catch-up contributions, but Ministers must not forget the nature of the product that they are launching. A pension plan that allows only 0.3 per cent. for running and marketing costs is going to be as basic as basic can be in the pensions world. Proper advice to savers is not going to be available. I am not convinced that it would be right to encourage payment of lump sums such as an inheritance into a personal account when proper independent advice cannot be obtained first. I hope that Ministers will address that issue as the Bill goes into Committee. Ministers must handle the enforcing of auto-enrolment—the Bill does not contain all that much on this—with extreme care. There is rightly a duty of auto-enrolment on employers, and there will rightly be a sanctions regime for those who do not comply; equally, we know that employers are going to be at the sharp end. They will receive questions from employees about what to do, and they will be unable to avoid ending up in some form of discussion with them. There is precious little in the Bill to explain how those conflicting pressures will be balanced. There is also far too little in the Bill about the role and remit of the personal accounts delivery authority. We want to see a much clearer definition in the Bill of the role of the authority and its successor body. We want clear provisions that prevent mission creep in the years ahead. The authority will become, if not the biggest, certainly one of the biggest pension organisations in the UK. If we are not careful, it could have a significant and disruptive impact on other aspects of the pensions market. It has an important role to perform, but that role should be properly defined and set in statute. We also want to see rapid progress in the governance of the new authority. At the moment, its board is made up of a chief executive—who clearly has had one or two friendly conversations with the Minister in the past few weeks—a highly controversial chairman and a non-executive director from the TUC. The Secretary of State and its current directors need to do a lot better than that if the authority is going to operate in the way that it should. I want to touch on two final points, the first of which relates to the regulatory package in the Bill. The Government's proposals are a useful step, but they also represent a missed opportunity. The job of this House should be to ensure that adequate regulation is in place to provide the protection that investors rightly expect, but it is not our job to do the pensions industry's job for it. Over the past decade, the Government have interfered much too much in the detailed management of pension schemes. They have made it more difficult to run schemes, more difficult to adapt to changing circumstances and more difficult to innovate. That should change. Many of the professional bodies in this field have put forward ideas that have the potential to help pension provision evolve and improve; some of them require deregulatory measures of a kind that this Bill simply does not address. We will press the Government in Committee on such improvements, and I hope that Ministers will respond constructively to those discussions. My second point relates to the timing of the measures set out in the Bill. As the Secretary of State knows, the reform package introduced by his predecessors had a specific target start-date of 2012, and he is required to set a date for the re-linking of the basic state pension to earnings by the end of this Parliament. Given that this Parliament came within one green bottle of ending last October, can he confirm definitively to the House today when the full reform package will come into force? Will it be introduced in 2012? We now know about the discussions that have taken place on personal accounts, but will the rest of the package—in particular, the re-linking of the state pension to earnings—start in 2012? I will happily take an intervention now from the Secretary of State if he wants to answer that question; if not, I ask the Minister to address it in his winding-up speech. This Government's track record on pensions in the past 10 years has been lamentable. They have presided over the rapid decline of our pension system and let down many of our most vulnerable elderly people. Their past efforts at reform have failed abysmally. The one man on the Labour Benches who appeared to have any idea how to tackle our pensions challenge had his ministerial career summarily terminated by the then Prime Minister—probably because he is smarter than him. I want these reforms to work and this Bill to make a difference not just because they are right for the pensions of tomorrow and for all our futures, but because we fully intend that a Conservative Government will implement these reforms in four years' time.