Pensions Bill

My Lords, I was not looking for a cheer—well, perhaps I was. If the Government do not come forward with further amendments at Third Reading, and I do not guarantee that we will, then we would certainly recognise the right of the Opposition to do so. I do not want to address in detail the points about banded earnings and the basis on which pay has been calculated. I believe that we addressed those issues in Committee. That concerns replacement rates, ensuring that auto-enrolment is right and that it pays to save, which is the reason for some of those parameters. I again acknowledge the benefit of avoiding complexity where possible. Administrative costs are an important issue and we need to keep them as low as we can. There is also the importance to business of certainty in how they conduct their affairs. I note the comment of the noble Lord, Lord Oakeshott, that Legal & General does not think that the DWP speaks the same language. I would not accept that, of course, but we shall do all that we can to encourage the department to do so. The noble Lord, Lord Blackwell, again stressed the prize of simplicity. I acknowledge that point. There is nothing to stop employers paying into the scheme as they currently do. They do not need to change the basis on which they make their payments, as the amendments today have made clear. At the end of the day, the challenge, now on an annual basis, is to ensure that contributions are at least equivalent to the requirements under the Bill. We recognise that the amendments reflect the further concerns of stakeholders, who want employers to have greater certainty in advance of their existing schemes’ quality. We take these concerns very seriously and are considering how they might best be addressed. The amendments tabled by the noble Baroness would enable the Secretary of State to create an alternative standard for qualifying money purchase schemes and enable an employer to assess its provision at scheme level rather than at individual saver level. A scheme would qualify providing that the employer followed a certification procedure set out in regulations and guidance from the regulator. A form of certification procedure is one of the options we are considering. However, I must be clear that anything that moves away from a standard which guarantees the minimum to all jobholders will need very careful consideration. Until we have better understood the feasibility and implications of this and other options, we are unable to go further. We will continue to talk to a wide range of stakeholders on this issue. If we are persuaded on an option that does not jeopardise the outcomes of the reform and we can find a suitable means of achieving it, we would be content to bring forward further amendments at Third Reading. I appreciate that this remains an open issue and am content to debate it further at Third Reading. At the heart of the matter is the situation in which the move from the standard laid down in the Bill facilitates arrangements whereby the quality of standards may occasionally not be met because of unexpected arrangements in bonuses and pay. We need to compare that, perhaps, with something that builds in a structural arrangement whereby there is likely to be a cohort of people who occasionally or routinely do not receive the minimum contributions. Grappling with that dilemma is part of our challenge, but I recognise the concerns. We need to keep talking to see whether we can end up in the same place, because we have that shared objective. On Question, amendment agreed to.