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Pensions Bill [HL]

My Lords, I thank the noble Lord, Lord Freud, for his introduction and explanation of the amendment, and for his generous attribution. As he explained, when making regulations about the alternative certification test, the Secretary of State is required now to be satisfied that 90 per cent of individuals eligible for automatic enrolment will receive contributions to the level they would have received had the scheme satisfied the relevant quality requirement. The Secretary of State is required to be so satisfied when regulations are first made and at subsequent reviews. We support the amendments because they represent a significant tightening of the Secretary of State's regulation-making powers. As we detailed, we support a certification process which gives employers an incentive to retain existing good-quality schemes, provided that it does not undermine the opportunity for relevant employees to benefit from auto-enrolment. We acknowledge that the certification scheme on which the Government are consulting appears already to be drawn within the parameters of the amendment. Perhaps the Minister will update us on that, and in particular on the phasing of employer contributions. Presumably such phasing now will have to be consistent with the amendment. Notwithstanding the constraining of the Secretary of State's powers, we should not lose sight of the fact that the Bill still allows the prospect of up to 10 per cent of jobholders missing out on contributions to which they would otherwise have been entitled. We stated from the outset that we support the Government and congratulate them on their decision to proceed with auto-enrolment and with NEST. I do so again today. However, we do not do this with unconstrained joy, because a number of provisions in the Bill erode the intended coverage of the arrangements. Some employees might miss out because of the certification process under Clause 10; the three-month waiting period in Clause 6 could reduce an individual's accumulated years of savings by nearly three years; the introduction of the earnings trigger in Clause 5, as currently set, would exclude some 600,000 individuals; and the broad uprating powers in Clause 8 would allow the Government to achieve their aspiration of a trigger of £10,190. As my noble friend Lady Drake pointed out on Report, this would exclude a further 800,000 workers each year, three-quarters of whom would be women. Collectively, the measures hit the low paid and those working part-time, especially women. They run counter to the overarching objective of auto-enrolment, which is to enable low and moderate earners to save. Should the trigger reach the level of £10,000, the reforms would begin seriously to undermine their original intent. All of this compounds the central unfairness in the Bill, which is the disproportionate way in which women are affected by the raising of the state pension age. As we have had no further comfort from the Minister on this issue today, the parliamentary campaign now moves to the other place. I conclude by thanking the Minister for the concession that is embodied in the amendment, and his team for their efforts in enabling the matter to be dealt with at Third Reading. They have removed the potential for severe diminution of coverage via the certification process, which is to be welcomed. We look forward to the reviews of how the alternative requirement is working in practice. As this is the last time I will speak on the Bill, I will take the opportunity to thank the Minister for his open approach to handling this important piece of legislation, and the Bill team for the way that they have stepped up to the mark and been helpful to the Opposition as well as to the Minister.