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Pensions Bill

My right hon. Friend has put his finger on the nub of the problem. It would be extremely unfair on an incoming Pensions Minister, whoever it might be, to find at the top of his in-tray or in his first red box a report, already some months or years old, saying ““We're sorry, mate, this can't happen in 2012.”” It is overwhelmingly important to all of us for whom personal accounts are the only game in town to know almost as quickly as Ministers if there is a problem, and how it can be fixed. The other new clauses and amendments in this group are largely self-explanatory, so I will not go through them in enormous detail. The central issue is that of the level playing field. It has always been an absolute principle—in fairness, for the Government as well—that apart from some seedcorn for PADA to set itself up and perform its initial task, the personal accounts system should wash its own face in financial terms. The costs should be recovered not from the taxpayer but from the scheme itself and its members, possibly over a period of years. What worried us in Committee was loose wording in the Bill about grants, advances and loans from the Treasury to PADA and, perhaps, its successor body, and the lack of provision for a commercial rate of interest or terms for repayment. We firmly believe that a clear line must be drawn between the set-up costs envisaged not in this Bill but in its predecessor, the Pensions Act 2007. If I remember rightly, that Act provided for an initial £21 million for PADA to set itself up and get organised. If more funds are needed thereafter, either the issue must return to the House or the scheme must pay its own way when it is up and running. Ministers are able to give evidence to Committees as well, which is great. In his evidence to our Committee, this Minister said:"““Indeed, it is the role of the members to pay for the operation of that pension scheme””," by which he meant personal accounts. He went on to say:"““Once we move into the new system, our aim is that it should operate on a self-funding basis.””" When I mentioned the money voted under the 2007 Act, he said:"““We are not planning to increase it at the moment; it is about £21 million for 2007–08. We will look at what costs PADA will need in the future, and it has an ability to raise funds if it needs to do so.””––[Official Report, Pensions Public Bill Committee, 17 January 2008; c. 113-4, Q138-9.]" Now let us fast-forward to the Reuters report of 12 March about the spiralling costs of the project. That report states:"““The government's new 'personal accounts' regime will cost an estimated 2 million pounds to set up, a four-fold increase on an initial budget of 500 million pounds, two sources close to the situation told Reuters… the total cost of… PADA… has mounted as management has gone back to the drawing board.””" I assume that that is a reference to Mr. Jones's review, which I mentioned a few moments ago. One of Reuters's sources is quoted as saying"““they've got dozens and dozens and dozens of expensive consultants working on nothing other than devising a plan and supporting the passage of a Bill, which is wrapped up in red tape and time-consuming government process. ""In line with that, the costs are rising astronomically. Value for money is the big thing. It's scandalous.””" It then talks about a management team led by chief executive Tim Jones. It says the team"““started re-planning the work in October when Jones took the reins.””" The final comment from the sources that I wish to quote is as follows:"““Around 100 consultants are working on the project, earning anything between 800 and 2,500 pounds each per day””." If that is true, or even partially true, we need to know from the Minister—if not today, then soon—precisely how PADA's costs are developing. What are they projected to be? Have we passed the £21 million figure already? How much will this project cost before it hands over to the board and trustees who will run the operation?