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Pensions Bill

I am sorry for suggesting that the hon. Gentleman might be trying to appeal to such people, but the proposals would look good in a Guardian article. On inspection, it is clear that they would oblige people on low incomes to comply with something that people with higher incomes and better pension schemes would not have to comply with. Opposition Members need to think carefully, as what might look good in The Guardian for one day could have significant implications for pension scheme members for a long time to come. Amendments Nos. 25 and 26 would amend the PADA principles in the Bill to require it to consider the needs of members. Moreover, when carrying out its work on investment, PADA would also have to consider whether members' preferences would result in disproportionate costs. Those are interesting ideas. In preparing its recommendations, the delivery authority will be required to consider the full range of guiding principles set out in what is now clause 70. That clause is at the core of the Bill, because it sets out what we are trying to achieve. It carefully sets out the balancing obligations to which PADA must have regard when we set up and run personal accounts. We have always been clear that although PADA will be obliged to meet those obligations, when the Personal Accounts Board and the trustee corporation are actually running a pension scheme, the trustees will have to take a view on what principles they believe that they need to comply with in order to protect the members of that pension scheme. That is why we took the view that although PADA will be obliged to comply with the principles in clause 70, we will not impose broad-based principles on the trustees without their consent. Clause 70 means that the trustees will take into account the investment preferences of potential members when PADA sets up the scheme, but they will have to balance that consideration with other principles, including that of encouraging participation, minimising the charge to members and respecting diversity; there was broad support for those principles when we discussed them in Committee. I understand the sentiments behind amendments Nos. 25 and 26, but they are substantively already reflected in the current principles. We do not have to adopt the UN principles to include the principles that are set out in clause 70. The principles that we have already included are designed to be considered together, and as a whole they ensure that members' needs will always be embedded in the authority's work when it prepares the scheme's draft investment strategy. Further changes to the principles are simply not necessary. We want to set out the way in which personal accounts will develop. The hon. Member for Eastbourne pretty much implied that the UN principles would apply to one investment account only, and not to the whole operation of the pension schemes. What we are looking at is a default scheme that will have a very limited number of additional options to which potential pensioners can sign up. Paul Myners said that he did not want all the bells and whistles put on; he just wants to ensure a simple, basic scheme, although there will be some options. After consultation, some members of the Personal Accounts Board may well take the view that they want an option that will enable ethical investment, and decide that the principles for ethical investment have to include the UN principles that we have discussed. I would applaud such a decision, but I want things to be done in a proper, sensible way, through consultation with potential members and stakeholders, and I want discretion to be given to the trustees in due course. The Conservatives and Liberal Democrats are wrong to seek to deny them that discretion. This debate has touched on some fundamental principles, including the principle that it is for trustees, and not the Government or Members of the House, to determine the best interests of members of the pension scheme. I ask Members to accept that the authority and autonomy of the trustees is important, and that we should not constrain them any further than the existing legal framework does.