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Pensions Bill

I thank everyone who has spoken in this debate; the usual suspects plus one. It has been fascinating, and it has covered a range of different views and perspectives. My role as Minister is to disappoint everyone. I say to the noble Baroness, Lady Greengross, that to quote Treasury edict to DWP Ministers is grossly unfair. It has always been our aim that personal accounts schemes should complement rather than replace good pension provision. As noble Lords are aware, we have made a commitment to introduce a number of measures to focus the personal accounts scheme on the target market of moderate to low earners. The key measures in this respect are an annual contribution limit and a general ban on transfers to and from the scheme. To deal with the question asked by the noble Baroness, Lady Noakes, about where transfers fit in, a ban on transfers into personal accounts, subject to the exceptions, will be in the scheme order, and transfers out will be prohibited under Clause 111. Clause 61 is to do with contribution limits, and those are the mechanisms to deal with transfers. As I said, the key measures in this respect are an annual contribution limit and a general ban on transfers to and from the scheme. Clause 61 provides for the introduction of the contribution limit and the review of that limit in the future. I have listened with great interest to the points made on all sides of the Committee. Contribution limits are clearly a key issue for all who have spoken, and I know that interest is not limited to this House. Throughout the development of the personal accounts policy, we have listened to the views of a wide range of stakeholders, and the clause is a direct response to the consultation. The Opposition may believe that I overuse the word, but I cannot think of a better example of establishing consensus than in the development of our policy around contribution limits. The majority of stakeholders agree that a balance has been struck between, on the one hand, focusing personal accounts on the moderate to low earners and not impinging on good-quality existing provision and, on the other hand, making sure that personal accounts can cater to the needs of their members. We are committed to an annual limit of £3,600, but based on 2005 earnings, which will be uprated in line with earnings to 2012 and beyond. This gives assurance to pension providers that personal accounts cannot take the place of existing products but will enable saving beyond the minimum for the majority of personal accounts.