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Pensions Bill

Before the noble Lord, Lord Skelmersdale, responds and decides what to do with his amendment, perhaps he can help me on a couple of questions. I listened carefully to him and to my noble friend. I am particularly puzzled by the implications of Amendment No. 113F. Like the Minister, I share the objectives expressed by the noble Lord, Lord Skelmersdale, that we are seeking to target lower income people who are currently not in saving schemes to come into a very simple, stripped down scheme and to get people to save who otherwise would not. I do not think that there is any dispute between us on that. I do not understand why the noble Lord seems to be suggesting, despite the remarks of his noble friend Lady Noakes on previous occasions about how we always assume that employers are ““unscrupulous””—on this side we always distance ourselves from such allegations—that unless something like this amendment is in the Bill, employers will close down better, more generous, contributory schemes and focus the conditions of personal accounts on people who are better paid than the lower paid and who are already protected in schemes. In other words, the noble Lord seems to be worried that the employers will use the arrival of personal accounts effectively to dilute their pension promise. Is that what the noble Lord is worried about? If so, he seems to be confirming the allegations of the noble Baroness, Lady Noakes, that there may or may not be unscrupulous employers. If that is not his allegation, his worry or his concern, why would any employer or employee seek to move to a personal account with a 3 per cent contribution on only half median earnings—half the salary range—compared with the conventional DC scheme of, on average, a 6 per cent contribution on the full salary range? If we are not to end up with two schemes within a company—one for the higher paid and one for the lower paid—how does the noble Lord overcome the problem of someone who starts on fairly modest earnings, perhaps on the shop floor, and then ascends to office management or supervisor or whatever? Does the noble Lord expect that person to go from one scheme to the other? If so, they will pay a very high cost in terms of what happens to the old personal account scheme that will be frozen when they have to move to a new DC scheme, given the refusal to allow any portability between the two schemes. What is the noble Lord actually afraid of? Who does he think will warp or manipulate the system? Why would employers who were willing to continue with a decent DC scheme not wish to do so? Why would employees wish to move from one scheme down to the other? What happens to the occupationally mobile?