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Pensions Bill

moved Amendment No. 112W: 112W: Schedule 1, page 62, line 14, leave out ““may”” and insert ““is required to make”” The noble Baroness said: We are coming to the end of Schedule 1. I shall move Amendment No. 112W and speak to Amendments Nos. 112WA, 112X and 113Q. These amendments concern charges made by the trustee corporation for the personal accounts scheme and they are designed to ensure that the costs of the trustee corporation are fully recovered in charges. They are linked to the group of amendments that we have just debated, which sought to eliminate or constrain subsidy flowing into the personal accounts scheme. This group of amendments concentrates on charges rather than financing. Amendment No. 112W would amend paragraph 19 of Schedule 1 so that the trustee corporation must make charges in connection with the exercise of its functions. The current paragraph 19 is merely permissive and I could not see why that should remain. Amendment No. 112WA would ensure that the charges were sufficient, taking one year with another, to cover its costs. I am not seeking to get into the philosophy of charging. I am aware that PADA has issued a document on how charges should be made for the personal accounts scheme. My amendments are much more modest because they are designed to ensure that charges will be made to cover all the costs over time. I fully accept that initially it will be necessary to spread costs over a number of years—I hope not too many—but the aim has to be to cover costs with income, taking one year with another. Amendments Nos. 112X and 113Q deal with the costs that are being incurred in the preparatory phase, which are currently being incurred by PADA. My amendments would ensure that the costs are passed on to the trustee corporation and then recovered. The Government and PADA have been vague about this. I understand that PADA expects to spend some £36 million in the current financial year, but it is hiding behind commercial confidentiality and has refused to give any estimate of the costs that it will incur on setting up the personal accounts scheme within that total amount. I accept that it will be doing things other than simply setting up the personal accounts scheme, but this is a very real problem. If we do not get further information from PADA on how those costs are made up—I am hopeful that there will be some progress on this—we may want to revisit the issue of making more information available from PADA to Parliament on the ongoing emerging costs of the personal accounts scheme. There are precedents for that for other major schemes that have been introduced in the public sector. For today, my key point is that my amendment would require PADA to account separately for the costs related to setting up and operating the personal accounts scheme and not simply to write them off. Amendment No. 113Q states that PADA must separately identify these costs and then charge them to the personal accounts pension scheme once it has been established. Amendment No. 112X picks that up by stating: "““The trustee corporation must make arrangements to recover these costs””." As we debated on the previous group of amendments, we share the industry’s concern that public money could be used to subsidise the personal accounts scheme. In the early years, when the upfront costs are being borne by PADA, it would be easy for these costs to slip from public view—government accounting rather helps that to happen—but they could be an important element of the overall costs of the scheme. Indeed, they will form the bulk of the costs that need to be recovered over a period. We must not let government accounting rules just write them off. It is important that they are kept in view and are included properly within the overall costs of the scheme to be recovered by charges. I hope that the Minister will see that these amendments are reasonable in the circumstances. I beg to move.