Occupational Pension Schemes (Levy Ceiling) Order 2006

I turn first to my questions on the Minister’s introductory remarks. Those statistics about the cost per scheme member were interesting and I wonder if, on the fund management costs figure, he could tell me what percentage of the total value of the funds that represented. Further, what proportion of the total funds are paying no risk-based levy at all? I think he gave an actual figure, but I was not sure if there was a proportion. I do not propose to go into too much of a general debate on pension funds and their funding. However, on the wider points raised in particular by the noble Lord, Lord Skelmersdale—on behalf of the CBI, it is probably fair to say—I find the CBI’s attitude frankly a bit odd. It is asking for certainty where, in the nature of the beast, that is not possible. Given how large the numbers are on both sides and, as the noble Lord himself said, given the rapid changes in yields in the bond market and so forth, I do not believe that it is possible to be certain, a few years ahead, what the PPF levy will need to be. Perhaps I may say to the CBI through the noble Lord that it is just unrealistic to expect it. Of course it is right that the PPF should try to operate economically with, if not certainty, as much visibility or predictability as is possible, but to be honest a lot of this is in the lap of the gods. If the CBI does not like that, what is it saying it would have done? If there was no PPF, would it simply have welched on its pension promises? The CBI has to accept that if there is a PPF, within reason the amount of money that has to be paid is that which is actuarially and commercially needed to fund it properly. I make those general points. By way of warning, I agree that the current very low level of bond yields—both real index-linked yields and conventional gilt yields—is exceptionally dangerous, given the muddle we have got into in the gilt market. The one thing we can be quite sure of is that pension funds investing in them at the moment are guaranteed to get a rotten long-term rate of return. Clearly the Chancellor did not understand what was being talked about when it was originally raised a few weeks ago by my colleagues in the Commons, although I think that he has had some briefing now. However, instead of talking vaguely about seminars and how there might be something in the Budget, he should get a grip and get on with issuing these bonds, thus stopping pension funds having to buy at such very low rates. I sense a considerable lack of urgency here. With those remarks, I support the order.