I rise to support amendments 7 and 8 and new clauses 4 and 5 in my name and those of others. A recurring theme throughout
the debates on Second Reading, in Committee and this evening has been the need to try to avoid unintended consequences. That is a particularly important mindset to approach this with given that the consequences of all that we are putting into legislation this evening will potentially last for decades, and the decisions that we take will affect people’s quality of life and financial opportunities in retirement. It is worth bearing that in mind when approaching the Bill, and when we consider any well-meaning assurances that we might get from the Government Front Bench in lieu of the actual substantive changes that have been asked for in the amendments and new clauses.
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There are three issues in particular that I will return to, the first of which relates to amendment 8 and dashboards, which I think are a fine innovation. We know the difficulty sometimes of keeping track of pensions that are accumulated over a lifetime, particularly when that working lifetime is no longer spent in just a few jobs, and someone picks up several pensions over a career. Dashboards can collate information that is informative and impartial. If, however, that information is provided in circumstances where there is a commercial interest before the system is bedded in, it creates the risk of needless policy churn. Such churn might be in the interests of advisers, and perhaps even of some providers, but it is unlikely to be in the interests of the policy holders and consumers. The potential for mis-selling under those circumstances is, or ought to be, obvious, and is surely antithetical to the objective of bringing in dashboards.
The second point that I wish to return to is on amendment 7 and defined-benefit schemes. The point has been made by many speakers throughout the passage of the Bill, and by the Institute and Faculty of Actuaries, that defined-benefit schemes, which remain open to new members, require a very different investment approach from those schemes that are closed to new members or that are not near to maturity. There have been contradictory messages, I am sorry to say, from the Pensions Regulator on the consultation when it comes to alleged de-risking and whether a class of beneficiaries from defined-benefit pension schemes should have their interests prioritised over those of others. To our mind, there is no good reason not to put in the Bill a suitable steer from the Minister about the need for a different approach for schemes that are open, but I suspect that he is reluctant to do so. I therefore seek an early assurance in his summing up that, although it may not be in the Bill, he will give a prompt direction to that effect at the earliest opportunity.
Finally, on new clauses 4 and 5 and the plumbers’ pension scheme, I am also a vice-chair of the all-party parliamentary group for plumbers’ pensions. We have heard eloquent testimony from my hon. Friends the Members for Perth and North Perthshire (Pete Wishart) and for Kilmarnock and Loudoun (Alan Brown) and the hon. Member for North East Fife (Wendy Chamberlain) about the impact that this issue is having on many plumbers who have sought only to do the right thing through their businesses, and provide for their employees.
I know that the Minister is not unsympathetic to the plight of those who find themselves on the wrong end of a section 75 debt under these circumstances. I certainly
take the view that those who are on the wrong end of that section 75 debt have been very poorly served at various points by the advice and guidance that they have been given and the way that the scheme has been managed. Although we clearly do not want to create adverse unintended consequences in other schemes, it is worth bearing in mind that this particular scheme has a section 75 debt of £7.5 million, in the context of a scheme that is fully funded and has £2.2 billion at its back. That debt could be waived by the trustees, if they were allowed to, at no detriment to the remaining members.
In seeking to resolve these unique circumstances, we have spoken about extending the deferred debt, in new clause 5. Also, proposed new sub-paragraph (h)(i) of regulation 2, in subsection (2)(b) of new clause 4, would ensure that the scope of any write-off is restricted to those who would have incurred the liability for a section 75 debt before the passing of that amendment, which would effectively put a firewall around the adverse consequences and moral hazard of seeking to apply it to other schemes where the circumstances do not justify doing so.
In conclusion, to do nothing about this would be a missed opportunity. If the Minister is not minded to accept these amendments this evening, I very much hope he will use his undoubted knowledge and ingenuity to help find a solution that can help to bring this nightmare to an end for the plumbers and their families, who have done absolutely nothing other than try to do their best and the most responsible thing by those they employed.