Pensions Bill

I am grateful to the noble Baroness, Lady Noakes, for the chance to addressthis important issue. The amendment would impose an additional and explicit requirement on the Government Actuary, which, if accepted, would shift much of the responsibility for recommending to Parliament the level of rebate rates for contracted out salary-related schemes from the Secretary of State to the Government Actuary. It may be helpful, therefore, if I explain a little about the legislative provisions that are currently in place to ensure that the level of rebate is reviewed and subjected to parliamentary scrutiny at least once every five years. These provisions include a requirement for the Secretary of State to lay before each House of Parliament a report which includes a statement about any changes to the existing rebate rates that he considers are needed. The report takes account of the accompanying Government Actuary’s report to Parliament, which sets out any changes in the various factors that affect the cost of providing benefits of a value that is broadly equivalent to those given up in the additional state pension. Put simply, the legislation requires that the Secretary of State recommend to each House of Parliament the changes to existing rebate rates that he considers are needed and that this recommendation give due consideration to the report of the Government Actuary. This amendment would bind Ministers to accept the recommendation of the Government Actuary and in doing so extend the statutory responsibilities of the Government Actuary. These are currently to provide an independent report to Parliament on the assessment of the cost of providing benefits of an actuarial value equivalent to that of the state benefits forgone by those who are contracting out. As is appropriate to the government actuary’s role, the report is confined to actuarial matters. The actuary’s report is prepared after full public consultation and due consideration of the responses to that consultation. As with all advice from civil servants, Ministers are obliged to give fair consideration and due weight to this informed and impartial report to Parliament. However, as is rightly the case, it is for Ministers to take decisions on the level of rebate in the light of other relevant considerations and advice and it would therefore be inappropriate to fetter ministerial decision-making by removing Ministers’ ability to determine the level of the rebate in the light of the broader public policy context and having regard to the prevailing and anticipated fiscal situation. The Government Actuary could not be expected to take a view on such matters on behalf of the Government of the day and it would not be reasonable to expecthim to. I do not doubt that the noble Baroness is thoroughly convinced by that argument and will happily withdraw her amendment.