Clause 11
Pensions Bill
1:30 pm
Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)
The Government, in drafting clause 11, have been mindful of some of the concerns. We have all talked about wanting to ensure that we develop a quality scheme that is simple and easy to administer. As the hon. Member for South-West Bedfordshire said, that has the potential to be a bit of a minefield, which could present some difficulties. Nevertheless, the safeguard is important for employees, so that the less scrupulous employer will not see if there is a way of saving money. Those companies that do not have schemes at the moment will be introducing a scheme and will have to pay the 3 per cent. employer’s contribution. If they can switch some of what someone earns into bonuses or not count overtime as actual earnings—predominantly affecting those on low pay—that will enable them to get below the £5,035 threshold, resulting in less of an employer’s contribution.
The Government have got it right by making sure that the clause is in the Bill. Nevertheless, I would be interested, as the hon. Gentleman said, in how they would intend to operate it. Clearly we want an easy-to-use system, which does not impose too great a regulatory burden on employers, but the safeguard is important. I support the clause as currently written.