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Occupational Pension Schemes (Levy Ceiling) Order 2010

My Lords, I remind the noble Lord that we are straying somewhat from the orders. Pretty much every time that we have talked about regulation and its scope, his party has argued for less onerous regulation across the banking system and across a whole range of other areas. The noble Lord talked about people losing their jobs and being in danger of losing their pensions. In previous recessions, that is what happened. We now have the Pension Protection Fund; it did not exist before, and we had the interim arrangements around the FAS. The Pension Protection Fund means that if a person’s employer becomes insolvent and their scheme is underfunded, they can rely on a stream of income in retirement. That simply did not exist before. The noble Lord talked about insolvency probabilities. This issue is still out for consultation. It is important that the PPF considers how best to assess this risk, but, at the end of the day, it is a matter for the PPF. The noble Lord strayed rather ingeniously to get on to the future of Royal Mail under this order. That is obviously a matter for BIS, and the Pensions Regulator is responsible for regulating scheme funding. Royal Mail will submit valuation and recovery plans in the normal way, like every other pension scheme. Issues around the future of Royal Mail and the Hooper plan are not matters for our deliberations today. The noble Lord, Lord Oakeshott, wanted clarification on the percentages and on where they were derived from. The 0.9 per cent relates to the 12 months ending July 2009; 3.5 per cent is the earnings factor for the 12 months ending April 2009. In fact, it may be 2008 rather than 2009, because the earnings factor is related to the year preceding the year with which we are dealing.