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Pensions Bill

I thank the noble Baroness for the amendment. I hope to satisfy both noble Lords as to why the Bill is drafted as it is. As the noble Baroness has said, we have now reached Chapter 4 of the Bill, which sets out the legislative framework for establishing personal accounts, one of the cornerstones of the reform package proposed by the noble Lord, Lord Turner. The Pensions Commission proposes the establishment of a low-cost simple pension scheme for low to moderate earners who are currently without access to a pension. Last year’s Pensions Act established the delivery authority that is to be charged with building this scheme. This year’s Bill provides the legal basis on which the scheme will be built. The scheme will be set up as a trust-based occupational scheme. It will be run by a sole corporate trustee, constituted as an NDPB. This provides accountability both to the Secretary of State and to Parliament. The Bill sets out the framework; the detail of the scheme will be set out in the scheme order, which will be secondary legislation. Further detail will be set out in the non-statutory scheme rules. We intend to consult on the draft order and the rules on the scheme, which will give all interested stakeholders the opportunity to comment well before the scheme is up and running. Clause 58 gives the Secretary of State the power to establish a pension scheme, ensuring in particular that the scheme is treated as established under a trust. The amendment in the name of the noble Baroness would impose a duty on the Secretary of State to set up the scheme, rather than provide a power to do so. I sympathise with the need for clarity around the Government’s intentions to establish this scheme. Let me be absolutely clear, as was my honourable friend Mike O’Brien in the other place. We will use this power to create the personal accounts scheme and it will be a defined contribution occupational pension scheme. However, the wording of this clause reflects the view of those drafting the legislation on how best to construct a power that provides for our desired approach of creating the scheme by developing a scheme order that is analogous to a trust deed. The details of the scheme will be set out in the scheme order. It may be either desirable or necessary, sometime in the future, for the Government to amend the scheme order. In accordance with the apparently tried and tested provisions of the Interpretation Act 1978, we will be able to use the power in Clause 58(1), as currently drafted, to do so. By converting that to a duty, the amendment would—in drafting terms—remove that opportunity, unless we drafted a further power. It would mean that this clause no longer allowed for an amending order, should that need arise. I draw noble Lords’ attention to the fact that if an amending order were to proceed, it would be subject to Clause 32 of the Bill and would require the consent of the trustees. A duty would not, apparently, work in the same way as a power. There cannot be a duty that would require the Secretary of State to amend the order, whether that was needed or not. I hope that that rather technical drafting point will allay noble Lords’ concerns. I also hope that the noble Baroness will accept my reassurances that we will use this power to establish the scheme and that the permissive drafting is there to allow for future changes only. On that basis, I hope that she will feel able to withdraw the amendment.