Pensions Bill

My Lords, we return to the financial operation of PADA and the trustee corporation. As the noble Baroness has made clear, Amendment No. 68 seeks to put an absolute duty on the Secretary of State to produce a report six months after this Act has been passed, setting out amounts incurred and estimates on a range of financial and operational issues. The report must be prepared annually thereafter. I recognise that Parliament has a legitimate interest in the financial affairs of both PADA and the trustee corporation, and that interest extends to getting information on a timely basis. It reasonably extends to the decisions that will have to be taken on such issues as the charge structure and charge level. As the noble Baroness will be aware, some of the items that are listed in the amendment will already be included in the annual report and accounts of both PADA and the trustee corporation. These reports will be available to Parliament and will present the full picture of costs, revenues and how members’ contributions are invested. The information included in these annual reports will be consistent with guidance from the Treasury in respect of NDPBs. I accept, however, that some of the information listed in the amendment will not be contained in the annual reports or the accounts, although some might be included, but at a high level, in business plans and corporate plans of PADA and the trustee corporation. However, in aggregate—including information included in the DWP supply estimates—this does not cover all of the detailed forward-looking information that the amendment would require. Some of that information we do not know, while other information has been treated as commercially confidential at this stage. I do not apologise for that. We may disagree as to whether it is the right judgment, but the clear advice to us is that it could seriously prejudice the procurement exercise. PADA will shortly begin negotiating with potential suppliers for the administration contracts needed for the scheme. Publishing even forecasts of costs over the next 10-year period, as the amendment would require, could undermine the negotiation process. We must ensure that PADA can obtain the best deal for members and, if there is Government funding, the taxpayer. Releasing figures prematurely could damage PADA’s negotiating position, and could prejudice PADA’s ability to obtain the best deal. I recognise that the noble Baroness’s amendment seeks to deal with the issue of commercial sensitivity in subsection (8) of the proposed new clause, but this is not simply an issue of value for public money. Members’ charges will ultimately pay for the personal accounts scheme, and members’ pension incomes will suffer if we do not respect commercial confidentiality. However, there will be points in the future when decisions have been made, detail has been developed and the procurement process is sufficiently advanced. At these points, information that does not, or no longer, impacts on the commercial negotiations should be revealed. So I today make the commitment that the Government will, on a timely basis, make statements concerning the issues raised by the amendment. This information will supplement and explain that contained in the future annual reports and accounts of both PADA and the trustee corporation. We will seek to make available any information or analysis that we are able to at the same time as those accounts and reports are produced, although this would not preclude statements at an earlier time. Unlike the amendment put forward by the noble Baroness, these statements will complement rather than duplicate information provided through the normal reporting framework for an NDPB and a pension scheme. It should therefore provide an appropriate balance between ensuring financial and operational transparency in a way that protects taxpayers’ and members’ interests without adding significant burdens to the Personal Accounts Delivery Authority and the trustee corporation. I urge noble Lords to bear in mind that as the procurement process is due to start early next year and be completed by summer 2010, a report at six months after Royal Assent would not take us much further given the necessity of commercial confidentiality. Similarly, reporting at rigid annual dates thereafter might preclude producing information about a decision or event in as timely a manner as the noble Baroness is seeking. In Committee we debated fears about whether personal accounts will be delivered on time. We have no information or reason to assume that the Government’s position as set out then has changed. Frank Field has been prayed in aid in respect of suggestions that personal accounts will implode. I should like to know the basis on which that judgment is made, which is a million miles away from our understanding. Charging levels for personal accounts are important but, as we debated previously, until procurement is undertaken and the funding structure for personal accounts is concluded, we cannot be absolutely clear about the charging structure or the end result. However, on the work that has been done, we believe that personal accounts can be delivered on the basis suggested by the Pensions Commission with low charges and that they will be self-funding in the long term. We have talked about subsidy. Perhaps it would be better to describe what the Government have in mind—if we go down this route at all—as compensation for the public service obligation being imposed on personal accounts. If the Government deemed that necessary and appropriate, it could become a reality only if we complied with European state aid rules. Compensation could be delivered to personal accounts only in those narrow circumstances. Beyond that, we are clear that it must be self-funding, and believe that it can be in the longer term. I acknowledge the noble Baroness’s legitimate interest—and that of the whole House—in this issue and her reasonable desire to allow parliamentary scrutiny of the scheme’s funding requirements as a way of ensuring the taxpayer is protected. Following a debate on the first Report day, I propose to look again at the financial provisions within Clause 80 and Schedule 1 to ensure they clearly reflect the Government’s intention that the scheme is delivered at no overall cost to the taxpayer. I hope that I have said enough to persuade the noble Baroness not to press her amendment. I reiterate that I desire to help her achieve her objectives within the framework of commercial confidentiality and protecting the interests not only of the taxpayer but of future personal account members.