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Pensions Bill

Today, we enter the final stages of this landmark Bill, which will transform the saving habits of millions of people in the country. Before we begin this final debate, I should like to pay tribute to my hon. and learned Friend the Minister of State, Department of Energy and Climate Change, the Member for North Warwickshire (Mr. O'Brien), to my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt) and to my noble Friend Lord McKenzie for all their stalwart work on the Bill. Thanks to their efforts, progress on this Bill has been characterised by a high degree of constructive dialogue between the Government, stakeholders and the Opposition. That consensual approach is clear in the vast majority of the amendments before us. I hope that, during this final debate, we will retain that consensus approach to a certain extent. On the issue of qualifying earnings, we reached a broad consensus on the way forward because of the constructive and supportive approach taken by a number of our stakeholders. Among others, I should like to thank the CBI, the National Association of Pension Funds, the Association of British Insurers and the TUC as well as colleagues in both Houses for their contributions to the debate on this important area. As I said, the Government have listened to the points that have been made in debate, and to our stakeholders. Amendments Nos. 21, 22, 57, 61 and related consequential amendments are designed to address concerns about the potential complexity of the band of earnings at the heart of the quality test. Amendment No. 61 makes it clear that trustees can change scheme rules as a route to compliance, but they still need to obtain the employer's consent to change those rules. In order to minimise the risk of levelling-down, this power cannot be used to reduce contribution levels. Amendments Nos. 21 and 22 and related consequential amendments enable employers to use an annual pay period to smooth the impact of irregular payments to workers. Amendment No. 57 allows employers who are confident that their workers are on course to receive the new minimum level of pension savings to certify that their arrangements meet the quality standard. That will increase clarity and certainty for employers, while ensuring that individuals' savings remain protected. The detailed processes will reflect the principles agreed with stakeholders and will be set out in regulations and guidance. The hon. Member for Eastbourne (Mr. Waterson) has tabled an amendment to amendment No. 57 that would remove the Government's ability to repeal the process of certification in the future. All our stakeholders have agreed that a review in 2017 is appropriate. Removing proposed new subsection (9) would mean that, following the review, we would not be able to repeal this legislation if it was felt that certification was not effective or necessary from the perspective of either workers or employers. Amendments Nos. 23, 24 and 25 ensure that the limits of the earnings band are reviewed annually in line with changes to average earnings, and uprated accordingly. This proposal was an Opposition amendment but we accept that it is consistent with Government policy, and that is why we have agreed to it this evening. Amendments Nos. 5, 12 and 15 extend automatic enrolment to workplace personal pension schemes. We always intended that automatic enrolment would apply to workplace personal pensions but concern was expressed on Report in the Commons that they could fall within the scope of two European consumer directives and that that might have prevented automatic enrolment into the schemes. Happily, when the Bill was introduced into the other place and following discussions with the European Commission, we were pleased to be able to announce that that would not be the case. That puts provision by the insurance industry on a level playing field with other provision, and it was warmly greeted by all our stakeholders. Amendments Nos. 28 to 32, 41 to 46 and 57 make technical changes to the scheme quality requirements to ensure that the widest range of schemes can qualify. Other amendments in this group are minor and technical in nature and are entirely consistent with the overarching policy. I therefore commend the amendments to the House.