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Pensions Bill

I wonder whether I might be permitted, before we move on to the amendments, to make a brief statement following on from where we left Monday’s proceedings. Following the debate in this House on Monday evening, my ministerial colleagues and I reflected on the thoughtful contributions made by the noble Lords, Lord Lucas and Lord Oakeshott, and the noble Baroness, Lady Noakes. I was in particular struck by the constructive approach taken by the noble Lord, Lord Oakeshott. He has acknowledged that the risks are great and that we are in uncharted territory, so something has to be done. He has also urged the Government to put more detail of his attentions in the Bill, to give clarity to the industry and to ensure that a workable arrangement is reached between the industry and the Pensions Regulator on this important issue. In our consultation, we requested responses on our proposed legislative approach. In that document, we suggested taking a broad amending power in primary legislation to follow with the specific detail of the changes in regulations. We did this for a number of reasons. First, we wish to give this House sufficient notice of our intent, which an introduction at Report stage would not do. There was insufficient time following consultation for an alternative legislative approach at Committee. Secondly, we wished to be thorough in consultation, and, having consulted widely on our policy intentions, to follow with a second consultation on the details in secondary legislation. This would help to mitigate the undesirable consequences of regulation, to which the noble Lord, Lord Lucas, and the noble Baroness, Lady Noakes, referred this week. Thirdly, we believe that, as the DWP does not have a pensions Bill every year—thankfully—the need to react to future unforeseen issues in pensions avoidance might be best served in this way. As we have consistently demonstrated, our intention is to work with our stakeholders closely, both on the draft legislation and on the regulatory guidance that would detail the specific requirements on schemes and their sponsors. However, it is clear from this week’s discussions, that noble Lords would prefer a greater amount of this legislation in the Bill, to ensure that the regulator’s powers are constrained by primary legislation. The noble Lord, Lord Oakeshott, felt that we were asking for a blank cheque to be given to secondary legislation. While this has never been our intent, this view has been reflected in some feedback received from key stakeholders. We agree with the principle. The slippage of our anticipated date of Royal Assent from July to later this year, gives us the opportunity to put more detail in the Bill. I am confident that we will find an appropriate way forward which addresses those concerns. I am happy to assure noble Lords that our intention remains to work closely with them and stakeholders over the summer and to return in the autumn with more of the proposed detail included in this amendment. We have discussed the potential for setting up a working group in this area with the CBI. It is supportive of the need to extend the regulator’s powers to deal with new market developments, but shares the noble Lords’ concern that more detail should be place in primary legislation. Alongside this we will work with the Pensions Regulator as it develops guidance to ensure that that guidance is clear and gives appropriate reassurance to business. It is therefore right that we work through the amendments tabled by the noble Lord, Lord Lucas, and the noble Baroness, Lady Noakes, some of which we can agree with in principle, so that I can be as clear as possible on the Government's position on the points raised. However, I should be clear that nothing in this detail or the discussion we have already had has persuaded us to withdraw the government amendment, which we consider is a proper foundation on which to build an effective and proportionate safeguard to counter the threat to pension provision. I am grateful for the opportunity to clarify where we left matters the other evening; I think it might help our discussions on the amendments that have been tabled.