Clause 62
Pensions Bill
4:15 pm
James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick and Leamington, Labour)
Let me add my welcome to you, Mrs. Anderson.
Clause 62—the principles—is an important part of the Bill, and these amendments have sparked an interesting debate. I agree with the aspirations expressed by those who have spoken in support of them. As many have said, they go to the heart of our ambitions for these reforms: more people saving for retirement; more people contributing more and for longer; and, ultimately, higher incomes in retirement. That is all underpinned by the establishment of a simple low-cost scheme focused on those currently without workplace provision.
Although I can sympathise with the aspirations behind the amendments, I suggest that they are not the right way forward. I am not necessarily in disagreement with the points on which hon. Members seek reassurance, but I am not sure that the amendments are the means by which to get there.
I will try to explain why, while taking the amendments in groups. Amendments Nos. 46, 108 and 160 seek to ensure that the authority acts in the best interests of future members of the personal account scheme. We must not lose sight of the fact that the authority is designing and setting up the scheme as an integral part of our ambitions for the reforms. While the interests of prospective members of the scheme are important, we must ensure that the authority has regard to other matters that are important to the success of reforms—including the impact on employers and on the broader pensions industry.
Therefore, I do not agree that there should be one overriding principle, as has been suggested. It is imperative that the authority gets the balance right among the needs of the personal accounts scheme and its members, the overall impact on employers, and the impact on the broader pension industry, including members and prospective members of other qualifying pension schemes. It is only by achieving that balance that we will successfully achieve all the core objectives of the reforms. I agree that the interests of future members are of central importance, but it is not necessary to add a specific principle to achieve that, and that could run the risk of unbalancing other important objectives in the way I have just described. The current principles have been drafted to ensure that the authority takes account of those matters that will be important to prospective members of the scheme.