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Pensions Bill

No, my Lords, I do not agree with that formulation. Nearly all the briefings have said that we have a robust consensus within which particular issues have to be sorted out. To make my point, I shall provide a couple of examples of issues raised by the TUC within its very robust support for the Bill. The first relates to the compliance regime. The TUC states: "““An effective compliance regime for the reforms and provisions to ensure the opt-out is not abused by employers are vital””." Therefore, employers must, "““pay their contributions in full and workers participate as widely as possible””." Secondly, they must not, "““attempt to influence their staff to opt out of personal accounts (or their own schemes where they provide an alternative qualifying pension scheme) … Most employers will co-operate fully with the new system, but it is likely that a minority will fail to fulfil their responsibilities””." The TUC says that it needs strong sanctions, "““to ensure that employer non-compliance is regarded as a very serious breach of employment regulations””." It says that the trade unions, "““recognise that there was a debate in Government about which agency should be the compliance and enforcement body for personal accounts and other existing good-quality employer provided pensions””." The TUC thinks that the right decision was made and that the role should be fulfilled by the Pensions Regulator. However, the briefing continues: "““We look for reassurance that TPR understands that this is a major change in its role. Up to now it has largely been dealing with stable large and medium sized employers responsible enough to establish a pension scheme, with the occasional issue caused by a relatively small number of employers. Its new role will mean that it has to deal with a hugely increased number of employers, many of them small and perhaps less organised, and some seeking to evade their responsibilities””." The TUC says that it is therefore very important that the TPR is given a step upwards in its resource and in its ability and competences to access all the data that it needs from other government agencies, such as HMRC, and that it shares data in return. It is also important that it has effective enforcement powers. My other example where there has been robust support for the Bill concerns the debate about the appropriateness of auto-enrolment. The TUC says that it recognises that there are some groups of people for whom saving would not be appropriate or others where there is a risk that they will not benefit from saving. This is not, however, a new issue and it is not specific to the introduction of personal accounts. It says that the language of mis-selling has been used by some opponents of the whole system, but genuine mis-selling has been conducted by companies which were fined for selling inferior products to members of good defined-benefit schemes. Although access to good information and guidance is essential in helping people to plan for their retirement and make decisions about saving, it is not possible to eliminate risk from the system unless either all means-tested benefits are replaced by universal benefits or all pension payments are disregarded in the means-testing. That could happen only if public spending on benefits were massively increased or big cuts were made in benefits. Sometimes these conditions are not spelt out. The TUC also says that in addition, all calculations that try to assess winners and losers are based on the current means-testing regime, maintaining not only its current structure but also its current level of benefits for many years ahead. This is not something that history suggests is very likely. Critics also undervalue the benefit that savers may see in building up their own pot rather than relying on the uncertainty of future benefits; nor do they take into account the extra tax credits that many lower-paid pension savers will get, as their pension contributions will lower the income used to calculate their tax credits. Finally, there is always a danger of mixing Second Reading speeches and Committee speeches. In Committee, people often say, ““You’re making a Second Reading speech””, and today one might think that noble Lords have made Committee speeches. With this Bill, it is particularly difficult to make a Second Reading speech without making a Committee speech at the same time. However, in juxtaposing Second Reading and Committee speeches, we should not forget that there is tremendously strong support for the architecture underlying the Bill. That has been a remarkable achievement over the past 10 years; I remember that we were talking about the architecture right at the beginning of the Labour Government. Therefore, when we start to look at Committee points, can we please recognise the historic step that we are taking today?