Pensions Bill

This has been an interesting debate. The noble Baroness, Lady Noakes, and I think the noble Lord, Lord Oakeshott, anticipated what I was going to say at the start ofmy response, and it will run through the other amendments—that I do not think that particularising these objectives in this Bill is the right way to go. When we move on to the second Bill, it will be important that the objectives are set out. As for the parameters under which the advisory work of the delivery authority will be done, we have publishedour White Paper, which has been the subject of consultation, and our response to that consultation is to be published imminently. I think that that will clearly set out the Government's objectives for the delivery authority. But I emphasise that we see personal accounts as complementing and not competing with the rest of the market. A number of points have been made about levelling down. As the noble Lord, Lord Turner, said, the delivery authority itself is limited in what it cando in encouraging people to the rest of the market. However, if you look at the structure of what is proposed for personal accounts, I think that you can see in some regards why it will complement and not compete. The proposed measures will limit the effects of personal accounts on existing occupational provision. We have the prohibition on transfers, the limit on contributions and the simplicity of the exemption criteria. I suggest that all of those serve to ensure that personal accounts do complement rather than seek to replace existing provision. It is absolutely right that we encourage people to recognise what a good mechanism the pension tax regime is for retirement saving. We will come on to that issue in a subsequent amendment. Another important point on which the Pensions Commission placed great stress is the issue of salary sacrifice and what it means in terms of national insurance. I am not entirely sure that that point filters through generally. It is something that one should continue to promote. We should also encourage employers to promote the benefit of good-quality pension schemes. We will have in due course a debate on public sector pension schemes. We should want employers to have good-quality schemes as they are a competitive edge for them. Certainly the research done for the DWP shows that the risks of levelling down are not as great as some might suggest. However, we have to be mindful of that. What is important is that we do what we can to make a success of personal accounts within the parameters that we have defined. Fundamentally, on this amendment and the amendments that will follow it, we do not think that it is the right time to specify in this Bill—the first Bill—what those objectives are. However, at each point that an amendment is discussed, I am happyto put as clearly as I can on the record wherethe Government are coming from on that. I do that again by reiterating that we see personal accountsas complementing and not competing with the generality of the market. I talked to the ABI and think it was keen to help us understand and to ensure that the consumers of these products understand the range of pension provision out there, which runs through a whole spectrum from defined benefit schemes to defined contribution schemes, with hybrids between the two concepts where some of the investment risk is borne by the beneficiary and some is not. There is an important education issue generally around that. However, I believe that, as personal accounts are proposed to be introduced, they genuinely will complement rather than compete with the rest of the market. It is in all our interests to ensure that both flourish.