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Pensions Bill

Like my noble friend the Minister, I am grateful for the number of people who have spoken today because I think that, although this is a thin amendment in some ways, it seeks to open up a core issue: how you encourage people to save and make it worth saving. This is one of many ways in which to do that; I am sure that we will revisit some of the other ways. I am grateful for the contributions of all noble Lords, irrespective—as with unisex annuities—of gender. I want to comment on Amendment No. 111A, in the name of the noble Baroness, Lady Noakes, which is grouped with my amendment. She emphasised several times that personal accounts involved a default scheme. I am sure that she is aware that if a woman on half median earnings of £11,000—she is the figure whom we are seeking to help—were in an average DC scheme, the employer would pay, on average, 6 per cent on the whole of her earnings from £0 to £11,000. In a personal account, half that would be paid on half of her earnings. Effectively, 1.5 per cent would be paid; that is all. Some employers, especially micro-employers, might not want to go into the market to set up a separate fund; they are currently paying, for someone earning £11,000 a year, £3 a week. The noble Baroness’s amendment would force them into paying perhaps £5 a week—£2 extra. They would be forced into the inconvenience, the hassle, the cost, the trouble and the inflexibility of going into the marketplace when they do not want to for the sake of £2 a week. I cannot believe that the noble Baroness, who is always so concerned to remind us of the burdens on business, is opposed to all burdens on business except where the employer might seek to avoid such a burden with a personal account by paying a contribution for an employee that is over the minimum. At that point, the noble Baroness would impose on the business the burden of going for a market option that it may not wish to seek. I find that, if I may say so, an extraordinary volte-face from the noble Baroness. It appears that she is so concerned with the meta-language of what may happen to the stability of bigger funds—I accept that—that she is willing to impose burdens of that size on micro-employers for £2 a week; she cannot regard that, on reflection, as reasonable. The noble Baroness made some entirely valid comments on my amendment about NIRS2 and tracking. With personal accounts, we must, by definition, track in the contributions. We will therefore know, by definition, the years for which contributions have not been made. I do not see a problem; if you know that you are contributing from, say, 2015 to 2019, and you contribute again from 2022, by definition you know that between 2019 and 2022 you have not been contributing; the records will show that. The headspace is there and is available to be filled. NIRS2 was different.