Clause 5 - Regulator's objectives
Pensions Bill
2:45 pm
Mr Nigel Waterson (Eastbourne, Conservative)
I shall speak first to amendment No. 154, because it leads on fairly naturally from the point that I was just making. Looking at the specifics, the amendment's aim is
''to maintain the cost of the levy on occupational pension schemes to the minimum compatible with the Regulator's other duties under this Act.''
The amendment is not an attempt to water down what the regulator does in appropriate cases. It arises from points made to me by the National Association of Pension Funds, which is concerned that the regulator should not get carried away in a rush of understandable enthusiasm, and should always bear in mind that it is there to regulate an industry in which the vast majority of pension schemes are run competently and honestly. Any excessive burdens will make matters worse, not better.
Along with amendment No. 153, amendment No. 154 goes to the heart of what the Bill is about. Before I leave amendment No. 154, I should say that of course we will in due course have lengthy and probably seemingly endless debates about the pension protection fund, the level of the levies and the element of risk built into them, including the initial levy and so on. We have all those discussions to look forward to. However, it is vital that we do not lose sight of the aim of protecting and maintaining the occupational final salary schemes that already exist and are surviving, as well as of encouraging new ones to open. We should at least aim to see that existing schemes do not close to new members.
Amendment No. 153 would insert an additional provision
''to promote occupational pension provision by minimising regulatory burdens applying to well run schemes and their sponsoring employers.''
I suspect that the Minister will agree with every word that I am saying. The stated objective is to have a light-touch regulatory regime in respect of the well-run, properly organised schemes, and for the regulator to reserve its attentions and enhanced powers for schemes that are in difficulties, for whatever reason. The resources must be used in that way as a step forward from the existing regulator. We really must press the Minister on the aim of the Bill.
When the Minister made his winding-up speech on Second Reading, I put to him the comments of the Government's pensions tsar, Mr. Adair Turner, who seems to take the view that of the 9 million or 10 million people currently in occupational final salary schemes, there will in 20 years' time be as few as 1.5 million workers in such schemes. If that is true, all the Bill will do when it becomes an Act is preside over a continuing trend of decline and closure. We all know that a large number of schemes have already closed to new members. On the basis of the most recent NAPF figures, which I am sure have been overtaken by events, a new worker joining a new company today will have less than a one-in-five chance of finding a final salary scheme that is open and that they may join. That trend continues.
Although I might be reading too much into the Minister's reply to my intervention on Second Reading, it appeared that he was saying that the Bill was about protecting the status quo and protecting those who are already in schemes, and those who will remain in them, to ensure that they get what they are entitled to. That is a laudable aim. However, we need to press the Government hard—[Interruption.]