It is a shame that the noble Lord, Lord Turner, is not here to respond to that himself or to clarify the point, but I take the clarification from the noble Baroness about where he was going. On the issue of how to drive down costs, the noble Lord referred to the potential and mentioned some horrendous numbers—25% or 30% of accrued pension disappearing in charges and how low it was possible to get that. There are some very interesting findings, which we are consulting on at present, about how technology would be a key ally in this. The noble Baroness, Lady Sherlock, asked about this too, wondering whether we preferred a paper-based system or an electronic system. Our preference, based on the current evidence, is invariably towards electronic, because there are associated costs every time you push a bit of paper around. I was interested to read in various articles that you might be able to get the figure for the entire transaction of a transfer down to £105 for both transmitting and receiving the amount if you do it electronically. There needs to be an electronic element to this and that probably points in the direction of a database. We are still consulting on that. We are open to advice, but that is probably something on which the industry will have to offer views.
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Decisions about timing and implementation for pot follows member will depend on the outcome of the many consultations and pieces of work to which I have referred. We expect to continue to consult during the current year. Regulations will then be brought forward under an affirmative resolution procedure.
We have consulted widely and done a great deal of work on limiting the powers of pot follows member. The Government’s conclusion is that pot follows member is the right model but we do not have an implementation date. I have now been handed a piece of paper—I apologise to noble Lords, as I am switching between my Whip duties and my Front-Bench duties, and doing so seamlessly with the able assistance of my noble friend Lord Freud.
Reference has been made to pots from pre-enactment days—that is, pre-2014. That is an excellent point. No decision has been taken on that. As I understand it, the legislation will provide for those pots to be included. However, as I say, no decision has yet been taken. These are the pots created under automatic enrolment. That seems broadly correct.
I think that I have dealt with the points made by the noble Baroness, Lady Drake, on whether individuals will face greater transaction costs and what will happen to legacy pots. We have talked about flexibility and whether self-employed people will be included. That was another good point. Initially, automatic transfer will apply in respect of any person who is a worker and an active member of a workplace pension scheme. Automatic transfer builds on automatic enrolment, which in turn relates to an employer duty, so it places the focus on workers first. There is scope to refine and broaden these provisions to include the self-employed if we consider that appropriate at a later date, but no provision has yet been set for that.
Before I wrap up, I will mention the two minor amendments in this group. One removes the definition of a member from Schedule 16, ensuring that anyone still in the accumulation phase has the same chance to consolidate their small pots as other savers. The other allows us to amend the levy provision to meet HMRC expenditure if its existing infrastructure could help in implementing automatic transfers. We appreciate the importance of getting this new system right. We are at an early stage of development but so far the engagement with industry representatives and other stakeholders has been positive. Our pot-follows-member approach will drive better outcomes for individuals and I therefore invite the noble Baroness to withdraw the amendment.