Pensions Bill

moved Amendment No. 68: 68: After Clause 96, insert the following new Clause— ““Report to Parliament about costs and implementation of personal accounts (1) Before the end of six months beginning with the day on which this Act is passed, and annually thereafter, the Secretary of State must prepare and lay before Parliament a report setting out the matters referred to in subsection (2). (2) The matters referred to in subsection (1) are the Secretary of State’s estimates of— (a) the amounts of money that have been incurred on personal accounts up to the date of the report together with an estimate of the amounts that will be incurred during the 10 years beginning with the date of the report, (b) the amount, if any, of the money included in the estimates under paragraph (a) which will not be recovered from charges to members of a personal accounts pension scheme, (c) the charges which will be borne by members of a personal accounts pension scheme, and (d) the date on which the personal accounts pension scheme will start to operate and the date on which it will, in the opinion of the Secretary of State, be fully operational. (3) References to the amounts of money incurred or to be incurred in subsection (2)(a) are to the amounts incurred by— (a) the Secretary of State, (b) the Personal Accounts Delivery Authority, (c) the trustee corporation referred to in section 73, and (d) a personal accounts pension scheme. (4) The charges which will be borne by members referred to in subsection (2)(c) shall be shown as an annual percentage of the sums expected to be invested in the personal accounts scheme or in any other way that the Secretary of State believes will provide a reasonable representation of the costs borne by members. (5) References to personal accounts are references to the relevant proposals about personal accounts under section 21 of the Pensions Act 2007 (c. 22) and the matters dealt with under Chapters 5 and 6 of this Act. (6) References to a personal accounts pension scheme are a reference to a scheme which has been or will be established under section 66 of this Act. (7) A reference to the personal accounts pension scheme being fully operational is a reference to the scheme being capable of making arrangements which fulfil the obligations of an employer under section 3 of this Act with any employer which wishes to do so. (8) If it appears to the Secretary of State that it would be prejudicial to securing the best value from the use of public money to publish any matter by including it in a report under this section, he may exclude that matter from that report. (9) This section shall cease to have effect on the day on which the Secretary of State makes a written or oral statement to Parliament that in his opinion the pension scheme established under section 66 is fully operational.”” The noble Baroness said: My Lords, the new clause would introduce a requirement for the Government to make a report to Parliament on the costs and implementation of personal accounts. In Committee, we pressed the Government hard on various detailed aspects of the personal accounts scheme which the Government, with the assistance of PADA, are seeking to deliver. We did not get very far on any of the crucial issues about the costs of personal accounts or the likelihood of their being delivered by 2012. The Minister variously stood behind commercial confidentiality and the existence of some high-level information on implementation from the chief executive of PADA, which had been placed in the Library of another place. We have lent our support to the concept of personal accounts, but that support is not unconditional. No one can be expected to sign up to personal accounts at any cost or in any form that PADA considers itself capable of delivering. Given the huge problem of lack of saving for retirement, no one can be expected to sign up to the possibility of a delivery date beyond 2012, especially as the Pensions Commission report recommended an earlier delivery date. More importantly, no one should be expected to sign up to a project whose detailed implementation is shrouded in mystery. No one should give the Government a blank cheque on this, and we certainly have not done so. We fear that personal accounts will be delivered late. The latest weasel words are that they will be launched in 2012, but there has been no description of the functional capability of the scheme at that date. There has certainly been no confirmation of a start date of 1 April 2012, and anybody who has ever run a payroll department will tell you that implementing payroll changes on dates other than 1 April is a potential nightmare. Importantly, we do not know the total cost of delivering personal accounts and how those costs will compare with the 0.3 per cent annual charge that the Pension Commission put forward in its final report. The Government subsequently said that they thought that the initial cost might be 0.5 per cent to take account of various factors, but all of the noise in the system suggests an even higher cost, and the Government have been developing a case for public subsidy for their invention of a public service obligation. In Committee, we tabled an amendment to wind up PADA, not in 2012 but by the end of 2013, because we recognise that PADA would overlap with the start of personal accounts. We reckon that that should disappear fairly shortly after personal accounts have been set up. The Government did not accept 2013 and would not even accept my offer of an extra two years to 2015. We fear another runaway computer project. The public sector is littered with IT projects that failed to deliver either functionality or within cost budgets, or both. I will name just a few to remind the Committee—the Child Support Agency, tax credits, NHS IT. We all have our own personal examples. We have no idea about the nature of the solution that is being adopted for personal accounts and we do not know how the risks to implementation are being identified or how they will be managed. Mr Frank Field, who has devoted considerable time in this area and who has become a personal account sceptic, warned recently in Pensions Week: "““There is … the likelihood that the Personal Accounts Delivery Authority will implode. The new body will depend on a specially commissioned IT scheme. When did the government last commission a successful IT operation?””." In short, we know almost nothing about personal accounts, but are fearful about what we do not know. Parliament is expected to take delivery of personal accounts on time and at a reasonable cost as a matter of faith because the Government say so. Against that background, we crafted Amendment No. 68 to ensure that Parliament is kept informed of the progress of personal accounts. It requires a report six months after the passing of this Bill and annually after that until the Secretary of State says that the scheme is fully operational. Subsection (2) sets out that the report should contain estimates of the amount spent and to be spent over the following 10 years. It must also state the date on which the scheme will be fully operational. Those are the basic building blocks; cost and timetable. The subsection also asks for the amounts that will not be recovered from members and which could well be subsidised, and for the charges to be made to members so that we can calibrate them against the Pensions Commission’s 0.3 per cent. Most of the rest of the amendment is taken up with definitions of the terms that we have used, but I draw the Committee's attention to subsection (8), which is an exemption in order not to prejudice obtaining value for money. I am not convinced that it is appropriate, since it allows the Government an easy excuse for non-transparency, but when the Government conceded a similar clause in the Identity Cards Act 2006, that exclusion was built in. I would be happy to trust the NAO to act as policeman to ensure that the exemption is not abused. As I mentioned, there is a precedent for this clause in Section 37 of the Identity Cards Act. There we faced similar frustrations in not getting any detailed information during the passage of the Bill and we now get six-monthly reports on that scheme. My amendment modestly asks for only annual reports. I would have preferred the Government to have adopted an open and transparent approach throughout the development of personal accounts. All that has been on offer has been some personal briefings from PADA and DWP personnel, and those are not a substitute for transparency in general—not only for parliamentarians but for those outside who have a legitimate interest in the progress of the scheme. I beg to move.