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Pensions Bill

It is entirely appropriate that the noble Baroness, Lady Noakes, is now going through these amendments in detail since the Government—unfortunately, and rather to my surprise, following what I thought was a constructive response from the noble Lord, Lord McKenzie of Luton, on Monday night—have decided to press ahead with this amendment. Given that we all accept that a lot more works needs to be done and a lot more detail needs to be in the Bill, I would have thought that it would be more sensible to withdraw the amendment so that work can take place over the summer. However, the Government have obviously taken their decision. I thank the noble Lord, Lord McKenzie, for the kind words and considerable amount of re-playing of my speech in the statement. I could say to him that flattery will get you almost anywhere. But it would have been a lot more helpful if his boss, the Minister for pension reform, had taken the trouble to read my speech. Perhaps he might have spent a little more time reading it and a little less time making increasingly frenzied phone calls to my colleagues in the Commons yesterday. I think he made three calls to our present spokesman and one to our former spokesman. But he did not favour me with a call, so I spent most of my time hearing the things that he was saying about what I had said which indicated clearly that he had not read my speech. I thought—and I thank the Minister for this—that my speech was reasonably balanced and constructive; I certainly did not recognise any of it in the calls that ““Macho Mike”” was making on Tuesday. I am pleased to say that the tone has suddenly changed overnight. I have in my pocket four messages asking me to ring Mike O’Brien, so I am glad that we are suddenly all friends again. Seriously, however, this is not the way to go about things at this early stage of scrutiny on a Bill and wastes quite a lot of time. The noble Baroness, Lady Hollis, will remember that, as I have said, we had a similar situation in 2004; but we have probably had six, seven or eight Ministers in Mr O’Brien’s position since then, all called different things. Just a little checking of what happened, or even taking some notice of his noble friend Lord McKenzie, would have been sensible. We should learn a lesson from this. It was not a constructive way to go about things, and I am glad that people have now, I hope, read my speech. I put a lot of thought into it, and we have been here before. This is not a party political issue. As we did in 2004, we are all of us trying to get the right Bill that will work for an important and serious issue. I welcome a more constructive approach. I do not think that a meeting, although Mr O’Brien has now kindly offered one, would be appropriate at the moment. The right way to do it would be for the Government to consult properly over the summer, not just with the CBI, the BVCA, the TUC and anyone with a legitimate and substantial interest in these matters. When the Government have completed those consultations and worked out what they want to do, and have some draft amendments, I would very much welcome the opportunity to meet Mr O’Brien and the noble Lord, Lord McKenzie; I hope that that will be taken up. Indeed, if the noble Baroness, Lady Noakes, came as well, it would be wonderful to get government amendments to which we could all put our names. However, Mr O’Brien must remember that we on these Benches are legislators, not stakeholders. We will ultimately need to decide, but I suggest that that is the right way to go about it. Again, I put on the record my serious concern over the dangers for British pension funds from what is going on in the buy-out industry. We are in uncharted waters. The covenant of some of these companies that are offering buy-outs is not undoubted; we have seen what has happened in America, with substantial reinsurance companies unable to meet their obligations. Speaking as someone who has been managing pension funds for 30 years and who ran the Courtaulds pension fund for five years, I would not be happy to have my pension fund taken away for the sponsoring employer behind it and sold off to one of these companies. These ““zombie funds”” are an accident waiting to happen. One can foresee many private-equity-backed companies going into receivership over the next year or two with serious consequences for their pension funds. I am totally with the Government on what they are trying to achieve. I support what the Pensions Regulator is trying to do. However, there is a right way to go about these things, properly taking into account the views expressed by people with a legitimate interest. I hope that that process will happen over the summer.