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Pensions Bill

moved Amendment No. 110A: 110A: Clause 58, page 29, line 32, leave out ““may”” and insert ““shall”” The noble Baroness said: We have finally arrived at the personal accounts pension scheme in Chapter 4 of Part 1. Anyone who had half an idea of the new personal accounts scheme—and there are precious few of those—would come to this Bill expecting to find something that said ““personal accounts””. They would be mystified because they would find nothing. Instead, the rather anodyne provisions of Chapter 4 and Schedule 1 are entitled ““Power to establish a pension scheme””, as if it were any old pension scheme and not one that is destined to be the recipient of billions of pounds of pensions contributions each year. However, we shall not let the apparent blandness of the Bill deter us from probing the way in which the new personal accounts pension scheme will work. Amendment No. 110A concerns subsection (1) of Clause 58. Under that subsection, the Secretary of State ““may”” establish a personal accounts pension scheme. My amendment replaces this permission with the requirement ““shall””. We often debate may/shall amendments, but this is not a mere debating point. I believe that it goes to the heart of the Government’s intentions about automatic enrolment. Under Clause 3, employers ““must”” make arrangements whereby relevant jobholders become active members of an automatic enrolment scheme. Many employers do not have pension schemes at all, especially if one disregards stakeholder arrangements, many of which were never used. However, this auto-enrolment is the primary focus of the Bill. Most employers have schemes that do not currently provide for automatic enrolment and do not comply with the qualifying earnings test; we have already discussed those issues in Committee. If employers do not make changes to their existing schemes, they will need access to the default personal accounts scheme. Therefore, it is something of a surprise to find that the Secretary of State has the option of whether or not to set up a pension scheme under Clause 58. If he does not do so, the Bill’s aims will be thwarted. More important, the employer duties in the rest of this part of the Bill will be in a dangerous form of limbo. Employers might have to comply with something that is impossible because no personal account pension scheme has been set up. I cannot believe that the drafting of this Bill, as it stands, is reasonable. It does not live out the clear policy intentions laid out by the Government in their various White Papers. I beg to move.