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Pensions Bill

I indicated where we stand in general on these amendments in my comments on Amendment No. 42 on the previous Committee day, so I do not propose to say much more at this stage. I reiterate how grateful I have been for the representations and meetings that we have had with people such as the EEF and the NAPF and providers such as Norwich Union, Scottish Widows and Standard Life. They make a fair point. I quote the Norwich Union, saying that accepting fluctuating contributions, including bonuses and overtime, "““is not standard industry practice and would therefore increase the costs of running pension schemes by tens of millions of pounds, reduce returns for savers and add complexity to employers’ decision making and administration””." The response that we heard at the end of the previous Committee day did not encourage me that the Government were thinking hard enough about how they could deal with these points and ensure that unnecessary costs were not imposed on good quality existing schemes. I do not share the rather extreme concern of the noble Baroness, Lady Noakes, who asked whether the Government were set on the destruction of the remaining vestiges of defined benefit pension schemes. That is rather alarmist, and if the Government are having that effect it is by not really thinking things through properly. I do not think that it is deliberate. This is a genuinely difficult problem on which we all need to work together to find a solution. Again, I stress that I thought the People’s Pensions Coalition had some good points when it was concerned to maximise the effective employer contribution in schemes, particularly for lower earning employees who are obviously most at risk. If they do not build up their pension enough, they will fall into the means-test trap. I am sorry if I sound rather on the one hand and then on the other, but these are genuine points. Grandfathering is a possibility but I am afraid—this is where we are lucky that there will be several months between the Committee stage and Report—it is incumbent on the Government to think long and hard, and to come up with some limits themselves. We would much rather that they did that. I do not know the answer but I know that the Government do not have it right yet.