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Pensions Bill

moved Amendment No. 89A: 89A: After Clause 29, insert the following new Clause— ““Means-tested benefits (1) Before the coming into force of the other sections of Part 1 of this Act, the Secretary of State shall publish his projections of the numbers of people likely to be subject to means-tested benefits (including housing benefit) and in at risk groups following the introduction of personal accounts. (2) If the projected figure published in accordance with subsection (1) exceeds 10% of the total expected pensioner population, the implementation of the scheme under section 58 of this Act shall be postponed for at least 12 months. (3) The Secretary of State shall publish any proposals for reform to address the findings in subsection (1) above concurrently with the publication of the projections thereunder.”” The noble Lord said: The amendment is reasonably self-explanatory. It is about having a report on means-tested benefits, and would introduce a requirement for the Secretary of State to report on the Government’s projections of how the introduction of auto-enrolment into personal accounts—indeed, any account—will impact on those likely to be subject to means-tested benefits. It would postpone the implementation of the scheme if that projection were too high. After pressure in another place, the Government have done quite a lot of work on the impact of means testing, and have recently taken steps to slow the growth in the number of pensioners it will affect. I understand that that work is continuing. These reforms to the state pension and the second state pension have had a large impact. Under the Government’s original scheme, we would have had nearly 80 per cent of pensioners on means-tested benefits in 2050. Under the new scheme, we are looking at an estimated 30 per cent or so still being eligible. This is a huge improvement, but the number is still high. I am optimistic that there is more improvement to be made. This is not the place for a debate on how this could be achieved, but acknowledgement of the figures is crucial to the success of auto-enrolment, and the question of how to increase the amount of pension saving in the country. The underlying assumption that enrolment into a pension scheme is a good thing underpins the whole Bill. From the central implementation of auto-enrolment to the provision of generic advice, the Government will be sending a message loud and clear to the target market that it is a good thing for them to put money into a pension scheme. Even before we get to that point, I believe that the Government need to run a lead-in campaign, probably along the lines of ““Tell Sid””, which was so successful in persuading people to buy into the privatisation of British Gas in the 1980s. Both messages need to be unambiguous as they will be directed at those who do not have a deep understanding of the issues that surround pension provision and are not placed to assess any government advice against their own circumstances. It is therefore even more important to ensure that this message is not misplaced. I know that the Minister will fully agree with me—this time, anyway—on the importance of ensuring that qualifying schemes are seen to be worth while for all those participating. The Government have produced reports and presentations seeking to reassure us that the vast majority of contributors will have a return on their savings and that those who will not could never have been predicted in any way. Some of these studies are still in the pipeline and will further inform the decisions on the final form that personal accounts and qualifying schemes will take. If the Government are serious about targeting personal accounts effectively and are careful about the accuracy of their generic advice, the terms of this amendment should not be hard to fulfil. Indeed, some might see it as a necessary benchmark to ensure the accuracy of that information and a crucial step in reassuring the public and the media of the worth of private pension saving. I am particularly worried about the activities of the media in this area. This amendment does not seek to drive the Government in a different direction from where they say they intend to go. Instead, it seeks to ensure that decisions around the implementation of auto-enrolment and personal accounts will continue to take account of this issue, even after the Bill has left Parliament. I beg to move.