Pensions Bill

I thank the noble Baroness. I understand the import of the debate that she wants to have and I shall try to deal with the points she raises. Clauses 33 and 34 form a key part of the overall compliance regime. Where employers are late in paying contributions, these clauses will enable the regulator to issue compliance with unpaid contributions notices to employers directing them to pay unpaid contributions into a pension scheme. These clauses build on and streamline the regulator’s current approach to following up late contributions and will enable it to deal with the higher volume of late payments expected after 2012. While it is expected that most employers will co-operate fully with the new system, it is possible that a minority will fail to fulfil their responsibilities. The compliance regime will therefore need to take firm action against this minority of employers without imposing unnecessary burdens on responsible employers. The noble Baroness specifically asked why the regulator needs new compliance powers? The Pensions Regulator has a range of powers under existing pensions legislation, as the noble Baroness asserted. These include powers to issue notices, such as improvement notices, and civil penalties. As noble Lords are aware, the Bill introduces a range of new duties. We expect most employers to comply with those duties and, as now, the regulator’s focus will be on educating and enabling them to do so. But an effective enforcement regime is needed where these initial steps fail. There are two reasons why new compliance powers are needed to enforce the new provisions. First, they are needed to ensure that the regulator can enforce compliance with the new duties in the Bill—for example, the regulator’s existing improvement notice powers would not apply to an employer who fails the automatic enrolment duty—and, secondly, more streamlined powers are needed to equip the regulator for its new compliance role. That, in essence, is why the new compliance powers are needed. The noble Baroness asked which powers, if both potentially applied, would be used. The compliance powers provided in the Bill would apply. I hope that has dealt with the point but I shall try again if it has not.