Roger Gale (North Thanet, Conservative)

Good morning, ladies and gentlemen. On behalf of Mr. Taylor and myself, I welcome you to the Committee. As long as I am in the Chair, hon. Members may remove their jackets. Mr. Taylor will no doubt make his own adjudication on the subject.

I remind the Committee that there is a money resolution in connection with the Bill, copies of which are available in the Room, and also that adequate notice of amendments should be given. As a general rule, Mr. Taylor and I will not call starred amendments, including those that might be reached during an afternoon sitting.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I beg to move,

That—

(1) the Committee shall (in addition to its first meeting at 10.30 a.m. on Tuesday 23rd January) meet—

(a) at 4.00 p.m. on Tuesday 23rd January;

(b) at 9.10 a.m. and 1.30 p.m. on Thursday 25th January;

(c) at 10.30 a.m. and 4.00 p.m. on Tuesday 30th January;

(d) at 9.10 a.m. and 1.30 p.m. on Thursday 1st February;

(e) at 10.30 a.m. and 4.00 p.m. on Tuesday 6th February;

(f) at 9.10 a.m. and 1.30 p.m. on Thursday 8th February;

(2) the proceedings shall be taken in the following order: Clauses 1 to 11; Schedule 2; Clauses 12 and 13; Schedule 3; Schedule 1; Clauses 14 and 15; Schedule 4; Clauses 16 and 17; Schedule 5; Clause 18; Schedule 6; Clauses 19 to 24; Schedule 7; Clauses 25 to 29; new Clauses; new Schedules; remaining proceedings on the Bill;

(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 p.m. on Thursday 8th February.

I am sure that I speak on behalf of everyone, Mr. Gale, when I say how delighted we are to be sitting under your experienced chairmanship on this important Committee, and also how much we are looking forward to the chairmanship of Mr. David Taylor, who is also very experienced.

The Bill has been widely welcomed, including on Second Reading, and there appears to be a broad consensus on the crux of the proposals that it contains. That is in large part owing to the extensive consultation and research that went on beforehand, not only in the exemplary work of the Pensions Commission, but in the national pensions debate in which more than 5,000 people participated, and in the White Paper consultation to which 350 organisations and individuals responded.

I put on record the Government’s gratitude to the members of the Pensions Commission—Lord Turner, Jeannie Drake and John Hills—for their work in shaping the proposals in the Bill. The Committee will  agree that the Pensions Commission’s report is a model of what commissions can do to shape Government policy.

I also put on record my gratitude to the main Opposition parties for the spirit in which they have approached the Bill. The Government have tried to work closely with the Opposition parties on the principles and to give them as much access as possible to our thinking, and they have helped to shape some of the proposals in the Bill. Of course, that does not preclude the need for scrutiny of the proposals, and it is right that the Committee do so. In the past, Bills have gone through with a measure of consensus that some retrospectively say means that they have not been effectively scrutinised, so scrutiny is an important task for the Committee. The reforms contained in the Bill will put in place a state pension system that is fit for the 21st century, one that will meet the demographic challenges that we face, and address many of the injustices of the current system, particularly those regarding women and carers.

The Bill also puts in place measures to support the widening of private pensions saving. The Committee will have the opportunity to examine the issue of the delivery authority for personal accounts. I am sure that there will be some scrutiny of, and enthusiastic discussion about, the arrangements for the delivery authority. However, on a point of detail, it is worth saying at the outset that the Bill is not concerned with the details of the personal accounts scheme in themselves. As hon. Members will know, the Government are in the process of consulting on our proposals for the technical details of the operation of personal accounts.

I am pleased that we have been able to meet Opposition requests for 12 sittings without guillotine motions, on the basis that the Committee will now find its own way through proceedings. I am very lucky to be joined by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt), who will assist us in our discussions. There is a great deal of knowledge and expertise in the Committee. I look forward with interest to the points that will be raised and discussed, and I hope that we will be able to continue the consensual approach to the Bill that we have had to date.

Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)

I associate myself with the Minister’s remarks about you, Mr. Gale, and your co-Chairman, Mr. David Taylor. I am sure that you will both bring to the chairmanship of the Committee your usual rigour and occasional good humour.

I am delighted to be ably backed up, assisted and supported by my hon. Friend the Member for South-West Bedfordshire, and indeed my other colleagues. I take this opportunity to welcome all members of the Committee, pressed men and volunteers. I am tempted to say that they do not know they are born. Some of us bear the scars not only of the Pensions Act 2004 but even the 1995 Act, to go back a bit. As a fresh-faced Back Bencher, I was put on that Committee—I think to punish me for some long-forgotten sin—where I developed a taste for pensions legislation. It is nice to see some old faces here today—I mean that in the best sense—particularly among the officials.

Here we are again, trying to resolve the pensions crisis. The Government are perhaps the only body in the country who persist in claiming that there is no pensions crisis, but we are going to have a bite at that rather substantial cherry. The good news, as the Minister said, is that we have agreed an informal timetable for sittings, so we should be able comfortably to deliver the Bill by 5 o’clock on 8 February. That will be a massive step forward from the last Pensions Bill, which seemed to go on and on and on, primarily because the Government kept trying to amend their own Bill. I lost count, but I think that between the Commons and the Lords, the Government tabled about 1,500 amendments in the end.

We are proceeding on the basis that this Minister has a much better grip on things. It is worth putting on the record that at the Programming Sub-Committee he gave us a cast-iron guarantee that there would not be lots of amendments. Apart from the obvious technical and drafting amendments, which are understandable as long as they do not get out of hand, all the envisaged amendments of any substance are now before us. That is helpful, and it is on that basis that we will be able to deliver the Bill in 12 sittings. For those newcomers to the world of pensions legislation, I hope that we can deliver a few laughs, a few tears and some human interest, and that we can disagree without being disagreeable.

The Minister mentioned consensus, and it is important to understand what we mean by that. Unlike his TV appearances, the Committee will not provide an easy ride. The Conservatives have made it clear, as I for one did on Second Reading, that by consensus we mean total transparency and openness. As the official Opposition, we must be satisfied that the Bill will work, not just because that is the right thing to do for future generations of pensioners but because we have a sneaking suspicion that we might well be in power when a lot of it comes to be implemented.

The Minister has touched on the main issues. One is restoring the link between pensions and average earnings. That was in our last election manifesto, so it would be churlish of us to do anything but support it.

Russell Brown (PPS (Rt Hon Douglas Alexander, Secretary of State), Scotland Office; Dumfries & Galloway, Labour)

On that specific point—that the issues of consensus and restoring the link were raised on Second Reading—I remind the hon. Gentleman, although I suspect that he has not forgotten, that the link would not have been guaranteed beyond one term had his party got into power.

Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)

I ruefully admit that that might be slightly academic, but I take the hon. Gentleman’s point. I thought that all manifestos were for one Parliament. I seem to remember learning as a fresh-faced law student that one Parliament could not bind another, but there we are.

At any rate, the issue was there, as was a suite of policies to better the position of carers, particularly women. The Conservative party are delighted that the measures are being introduced, particularly those concerning women’s pensions. We will have a lot to say about the detail, particularly the issue of the cliff edge, as it has become known, although a steep incline is probably a better way of putting it.

The state pension age—Committee members will be relieved to know that this will not affect many of them—will rise slowly to 67 or 68. I thought that the Minister was trying to put down a marker concerning personal accounts. It is important to see the Bill as a seamless whole. Unless the state system is working, the private system will not work and vice versa. Unless the state provides a decent platform for private pension savings, issues such as means-testing will fatally undermine pension savings, so the two stand and fall together. Although the Minister is correct in saying that a second, much more detailed Bill dealing with the personal accounts system will be introduced this time next year—I imagine that we will be members of the Committee—it is vital that we take the opportunity at this early stage to put down some clear markers about how the personal accounts system should operate. The Opposition will certainly seek to do that.

On Second Reading, I said that I feared that Ministers were only too keen to appoint high-powered people to run the delivery authority and then leave them to deal with all the difficult stuff. The House needs to be clear about how personal accounts will work, how they will be delivered and whether they will be successful in the real world. Most importantly, we need to set out what constitutes success or failure.

I also talked about the four elephants in the room. I said that it was very important to discuss means-testing—I will come back to that in a moment in a different context. Secondly, I talked about levelling down and to what extent personal accounts will undermine good existing pension provision provided by responsible employers. Thirdly, I talked about the dangers of mis-selling to people who should not be auto-enrolled but advised to opt out of the new system. Fourthly, I mentioned confidence. We have tabled amendments dealing with issues such as the financial assistance scheme, the ombudsman’s report and all the unfinished business that the Government should be clearing away to try to ensure that personal accounts have a clear run and a good chance of taking off and being successful.

I return to means-testing. For us—and, I suspect, for the Minister as well—it is a central issue. Currently,50 per cent. of all pensioners are being means-tested. If we carry on as we are, it will be 75 per cent. by the middle of the century. That is clearly unacceptable, and the Government have already said so on record. The key issue is whether the reforms will reduce means-testing to an acceptable level. The Government say that it will be reduced to about 30 per cent. Independent bodies such as the Pensions Policy Institute put the figure closer to 45 or 50 per cent. There is a clear division. In fairness, the Department for Work and Pensions and the PPI have been trying to narrow the differences, but not with any great success.

That is why I raised the possibility on Second Reading of having a session, or perhaps half a session, of oral evidence on that subject. For the benefit of those Members who may not have been keeping up, we are operating under new Standing Orders. I do not claim to have read them all, but one of the key differences is that we will be subject to written evidence, which sounds like a good idea in theory. I have not seen any yet, but it will no doubt emerge. Like a Select  Committee, we will receive it as we go along and it will eventually be produced in a bound volume, and I welcome that.

However, there is also provision for oral evidence in Committee. Again, that is a good idea in the right conditions, and it is absolutely crucial to the success of the reforms, but it is relatively narrowly defined. The likely witnesses will come from only two groups—the boffins from the DWP and the boffins from the PPI—so the evidence could be dealt with rather crisply. On the Programming Sub-Committee, the Government’s attitude was that they were not prepared to agree to that. Indeed, they took a rather strict view that the rules would apply only to Bills introduced for First Reading after Christmas. If that is the test, this Bill would fail it. So far, so good.

However, as was mentioned at business questions with the Leader of the House last Thursday, a precedent exists—the Local Government and Public Involvement in Health Bill. Even though the Bill received its First Reading before Christmas, the Bill’s Committee decided that it will take oral evidence. There is a precedent, and I understand that the Committee is sovereign with regard to hearing oral evidence during its deliberations.

Mark Pritchard (Wrekin, The, Conservative)

Does my hon. Friend agree that, if we can hear oral evidence, it would square the circle and onward discussion in the difference of interpretation of how far the Bill will deliver a reduction in means-testing between the Department for Work and Pensions and the Pensions Policy Institute to which he referred?

Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)

My hon. Friend is absolutely right. I shall return to that point in a moment.

I wish first to deal with the reaction of the Leader of the House when the matter was put to him by my right hon. Friend the Member for Maidenhead (Mrs. May) on Thursday. The right hon. Gentleman talked about Standing Order No. 83C and said:

“We are very committed—I include in this my right hon. Friends the Chief Whip and the Deputy Chief Whip—to making this system effective. If the Standing Orders say that not only the Programming Sub-Committee but the Public Bill Committee can decide on whether to have evidence sessions, that is correct.—[Official Report, 18 January 2007; Vol. 455, c. 921.]

In fairness, he referred also to the bedding down of the procedure and hence the First Reading rule to which I have referred.

We have a dilemma. The Government are worried, as I would be if I were still a Whip, about getting the business through by 8 February. Having oral evidence on this carefully defined subject with a controlled number of witnesses from two groups need not add any length at all to the time spent in Committee discussing the Bill. Indeed, to pick up the point raised by my hon. Friend the Member for The Wrekin, I believe that such proceedings could save the Committee time. Speaking for myself and, possibly just for once, the Liberal Democrats, I think that we shall be spending a lot of time on means-testing. It will keep coming up naturally throughout the Bill. If we can square that circle, such a process could shorten our proceedings.

Sally Keeble (Northampton North, Labour)

Let us bear in mind that we are members of a scrutiny Committee, not a Select Committee. On which clause does the hon. Gentleman want to take oral evidence to further our discussion about the detail of the Bill? Having read the Bill several times and tabled amendments, I cannot see any bit of it that refers to mean-testing. There are several proposals that will substantially increase pensioners’ incomes, especially those of women pensioners so that they will be taken out of means-testing. On which clause does the hon. Gentleman propose that we hear oral evidence?

Roger Gale (North Thanet, Conservative)

Order. Before we go too far down that road, I understand the points that are being made but, by the same token, I must remind the Committee that no amendment has been tabled, so there is no amendment of that sort to discuss in respect of the programme motion.

Nigel Waterson (Shadow Minister, Work & Pensions; Eastbourne, Conservative)

I am aware of that, Mr. Gale. However, I want the Government to reconsider the point or at least say that they will go away and discuss it seriously. It could help in the long run. It is fairly crucial to matters; otherwise, Conservative Members will vote against the programme motion.

It has been put to us in writing as well as orally that, in their goodness, the Government are arranging another seminar that hon. Members and no doubt lots of others can attend to talk about the issue. I do not know whether a date has been mooted or fixed, but we look forward with great excitement to another opportunity of a seminar organised by the Department for Work and Pensions. However, that is not the same thing as members of the Committee having the opportunity that they deserve to conduct their own investigation and to hear oral evidence within a narrow compass. It need not extend our proceedings in Committee at all; it could save us time and it seems eminently sensible. Will the Minister think again about such matters? If he is not prepared to do that, I shall invite my hon. Friends to join me in voting against the programme motion.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

On behalf of myself and my hon. Friend the Member for Solihull, I welcome you to the Chair, Mr. Gale, as well as Mr. Taylor, in due course. I thank the Minister for Pensions Reform for his constructive opening comments and welcome him and his fellow Minister to the Front Bench. We also look forward to entering into debate with the Conservative Front-Bench team, such as the hon. Member for Eastbourne who, as we have heard, has considerable experience on the Opposition Front Bench. He questioned what he had done to deserve such experience, which rather reminds one of the fact that the Paymaster General is now on what I think is her 11th Finance Bill, which is a real penalty so perhaps the hon. Gentleman should be grateful for merely a prolonged period on the Pensions Bill.

We also welcome the hon. Member for South-West Bedfordshire, who I think is within the age range that will be affected by the change to basic state pension age limits. Many of us were disappointed that the hon. Member for Eastbourne did not spot that a large number of us on the Committee, including a number of his hon. Friends, will be affected by these proposals.

This is an extremely important Bill. In this place we discuss an awful lot of issues, including a lot of legislation. The latter is sometimes presented as having the potential to make an enormous impact on our lives but—particularly from the Home Office and a couple of other Departments that I could name—quite often does not live up to our expectations. In contrast, this Bill is immensely important because it will affect almost everybody in the United Kingdom in one way or another, not only through changes to the state pension age but through changes to the number of contributory years for the basic state pension age, restoration of the earnings link and the introduction of personal accounts.

Therefore, this Bill will affect people’s lives in a very real and tangible way, whether that be in a perceived negative sense by asking them to work longer or in a positive one by enhancing the basic state pension. As the Minister said, it is therefore vital that we give all of the Bill proper scrutiny, notwithstanding consensus on its broad principles.

I should also like to welcome and thank the other individuals involved in helping to steer this Bill through, not only departmental officials but also those from the Opposition, such as the many lobby groups who take a great deal of time, care and attention presenting proposals for amendments and who provide us with useful briefing notes, which are sometimes reflected in our discussions.

I shall not repeat in precise terms the case that the hon. Member for Eastbourne made regarding oral evidence sessions. However, we strongly support his comments. The Modernisation Committee’s report gave a clear indication that oral evidence sessions can be immensely useful and potentially save time because they may involve taking evidence from Ministers and therefore save on some of the probing amendments that we often have to table in order to flush out ministerial thinking.

As the hon. Member for Eastbourne said, there is also an issue central to this Bill which impacts on many of the different proposals on the subject of means-testing. While one could say that the Department for Work and Pensions Committee did a pretty good job in taking evidence and in looking at all aspects of the Government’s proposals, it is clear that it did not manage to resolve the fundamental matter of the proportion of people and the target audience for personal pensions who will be affected by means-testing and therefore the knock-on consequences of that for returns in the personal accounts. That is a crucial matter and one for which an oral evidence session could be immensely useful. One gets the impression that the Minister is not particularly minded to give ground on this. Therefore, I wonder whether I might make some other suggestions if we have the fallback position of a seminar—

John Penrose (Weston-Super-Mare, Conservative)

Just to reinforce the hon. Gentleman’s point, when the PPI and the Secretary of State gave separate evidence to the Select Committee on this point we ended up with an argument by proxy. It would have been much faster, and probably would have resulted in much greater clarity, if we had been able to have them in the same  room to fasten down and home in on issues and allow them to address each other point by point. It would have helped our proceedings then in the same way as I suspect the hon. Gentleman is suggesting that it would help our proceedings now.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

I am grateful for that point. As the hon. Gentleman indicated, he served on the Select Committee and is therefore particularly well placed to say which elements were unresolved by those proceedings. The Minister has offered us a seminar, as the hon. Member for Eastbourne indicated, and our hearts pulsate with excitement at that prospect. However, while not knowing whether we will be able to ask the Minister questions as part of that—as would be the case in oral evidence—we fear that it might simply be a lecture. It would be helpful to clarify that. We also do not yet know whether the PPI would be there to give evidence alongside DWP officials and put their case in its own terms, rather than second hand, or what cross-questioning would be allowed—of either group by Committee members, or of DWP officials by the PPI. We do not know how outside groups, who have the benefit of sitting and listening to the exchanges in oral evidence sessions as part of these hearings, would be involved.

So, even if we fall back on the less attractive seminar idea, there are ways in which the Government could make a seminar rather more meaningful and similar to the oral evidence sessions that the Modernisation Committee envisaged.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

To add to the list of questions that the hon. Gentleman has asked about the seminar, does he agree that one important issue is its date? Although many of us would like to see it held in this Committee, to have it at some point in the Committee stage would be useful.

David Laws (Shadow Secretary of State for Work and Pensions, Work & Pensions; Yeovil, Liberal Democrat)

I entirely agree with that point. We know that, sometimes, things are promised at this stage in Committee hearings that only emerge too late. If we are to have a useful seminar on this, it must be pretty soon. So, those are our concerns and I really hope that the Minister can respond positively on some of the specific points raised on that means-testing issue.

James Purnell (Minister of State (Pensions Reform), Department for Work and Pensions; Stalybridge & Hyde, Labour)

I shall try to respond to those points in the time available. On the levelling down issues, it will obviously be for you, Mr. Gale, to decide their relevance to this Bill. I would say that such things go into the issue of personal accounts, which this Bill does not introduce—it introduces the delivery authority—but we can continue that debate.

The point here is really about the precedents that we are setting. An oral evidence session fails the precedent test on two counts. First, a clear exception was introduced in the bedding down of these arrangements. The Bills introduced before December were clearly not required to have such sessions. Secondly, and perhaps even more importantly, the purpose of those oral evidence sessions is not to have a general debate on the proposals; it is specifically for there to be further questions about issues that have not been consulted on fully in the Bill.

In contrast, these issues have been scrutinised pretty much as well as any Bill that has ever been put forward. The PPI proposals have been put forward in formal evidence to the White Paper. We published a document specifically giving people the chance to read evidence about our means-testing assumptions and forecasts, which have been scrutinised by an independent commission and looked into by us and the PPI. With that all published, it would therefore set a wrong precedent to put this into the Bill.

We are happy to have that seminar, and I can happily reassure the hon. Member for Yeovil that people would be able to ask questions, and that we would indeed invite the PPI and outside groups. We are confident that we have set out the correct forecasts, modelling the effect of the state second pension. It is worth pointing out that if Conservative Members vote against this, they are not voting for the idea of evidence sessions but against the programme motion that they first suggested. So, I urge my colleagues to vote on the basis of forming the right precedent.