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Pensions Bill

moved Amendment No. 113A: 113A: Clause 70, page 34, line 25, after ““in”” insert ““existing”” The noble Lord said: I speak to a larger group of amendments than usual: Amendments Nos. 113B, 113D to 113F, 113HA and 113M. My amendments are reasonably clear. They tweak the principles under which the authority will operate to ensure that it does not inadvertently do more harm than good, or even less good than it otherwise might. As I said previously, I remain acutely aware that the authority is, despite its name, not limited to the establishment of personal accounts. Although setting up personal accounts is an important part of its duty, it will also have an equally important—even critical—role to play in establishing a landscape where saving for your retirement is more common at low incomes, whether through personal accounts or not. Amendment No. 113HA sums up the thrust of our concerns quite well, especially in its sub-paragraph (iv). The Government’s and the authority’s overriding aim must be to increase total savings. It must not be considered an acceptable outcome if the existing pot of savings is merely redistributed more widely. If this existing pot does not expand, the Bill will have failed, and failed dismally. To prevent that happening, my amendments seek to ensure that the authority actively seeks to prevent the basic levels of employer and employee contributions becoming in any way the accepted norm across the industry. As we have said many times, and as Amendments Nos. 113A and 113D highlight, existing pension schemes tend to offer considerably more generous terms than personal accounts will. These schemes need to be fully appreciated by the authority, and membership into them should be encouraged. Amendments Nos. 113B and 113E make a slightly different point. It is likely that some existing schemes will not make the qualifying criteria but would still result in better retirement income than personal accounts. For example, the Tesco pension scheme would fail the qualifying test because workers are auto-enrolled only after a year with the company. It is not beyond the bounds of possibility that a similar company might comply with auto-enrolment into personal accounts, but keep its more generous scheme running in the hope that workers transfer to the better scheme when they become eligible for it. As the Bill is drafted, it will be a breach of employers’ duties for them even to point out the existence of their non-qualifying but more generous scheme. It will also be impossible for employees to port their personal accounts money into a firm’s much better scheme after a year or so in personal accounts. What price, then, the very successful portability arrangements of my noble friend Lord Fowler that even this Government have improved? The pensions market is a highly complex and frequently innovative place. The authority must have the flexibility to use common sense when weighing up whether workers are being materially harmed by remaining in non-qualifying schemes rather than being shunted willy-nilly into personal accounts. The authority should focus on giving low earners who have no access to a pension scheme the opportunity to start saving. The Minister will no doubt say that there is no intention that it should ever broaden its remit into attempting to break into the pensions market for more affluent customers. Unfortunately, such a Hansard reassurance is in no way comparable to primary legislation. Amendment No. 113F would put the safeguard in the Bill. Amendment No. 113M seeks to improve public scrutiny of the authority by ensuring that its compliance with the Clause 70 principles is published. It would also throw up any inherent contradictions in the principles—paragraphs (d) and (f) in particular could be mutually exclusive. I beg to move.