The arguments in respect of this clause are similar to those for clause 194 in that they relate to burdens on business, reserve powers and so on. The clause requires employers to act to enable employees to have access to information and advice about pensions and saving for retirement. According to the regulatory impact assessment, the provision is targeted at employers with low or no contributions and low membership rates—indeed, the very group of employers who are required to designate a stakeholder pension scheme. There are at least 350,000 employers who employ five people or more, but who do not provide access to an occupational pension scheme or do not contribute at least 3 per cent. of an employee's salary to a group pension arrangement. The document reminds us that about 82 per cent. of employer-designated stakeholder schemes have no members.
Will the Minister confirm that the Government are proposing to pilot a range of different options, from a straightforward pensions information pack that gives information to employers on pensions—the approach being, presumably, ''Here's a leaflet about it,''—to the Rolls-Royce option of a pensions information pack, a presentation to employees, and a one-to-one interview with an independent financial adviser who will give limited pensions-focused advice?
It is useful that there will be pilot schemes on the different options because one feature of the four options is ascending cost. What time scale does the Minister envisage for the pilot schemes? There is talk of them starting any time now, if they have not started already. How long are they likely to last and how long does he anticipate that the assessment of the results will take?
The Minister will be aware that there have been criticisms, not least from the CBI, that the proposals are over-complex, too intrusive and costly. The CBI is concerned about employers who do not contribute to pensions having to provide pensions advice and information to their employees. It accepts that employers who do not contribute should provide pensions information, but it draws the line at them providing advice. It says that many small employers
would find providing annual interviews or presentations hugely expensive and that
''facilitating advice by stakeholder providers could have legal and/or employee relation repercussions in the future if, for example, the pension underperforms.''
I am sure the Minister is aware of the genuine concerns of responsible employers who are members of the CBI. I hope he will confirm that the powers will remain reserve powers for the foreseeable future, but what will be the criteria for using the powers instead of merely having them in reserve?
Having spoken for the downtrodden masses, I, too, want to defend the CBI, although I promise not to make a habit of it. It raised a specific aspect of the clause with me. The world will never know that we tabled amendments to clause 195 because, as we reached it rather sooner than we anticipated, they will never be seen.
At various points the clause refers to ''information and advice''. That is the key thing. The hon. Gentleman touched on the issue, but I want to tease it out a little further. The clause is entitled ''Information and advice to employees''. As I said, and as the hon. Member for Havant (Mr. Willetts) has pointed out, employers are very nervous about anything that smacks of advice, to the extent that they may not even encourage their employees to join their own perfectly good employer scheme, which employees may have been well advised to join. In some cases, employers are almost frightened to say anything lest they be accused of giving people poor advice or being in breach of financial services regulations because they are not authorised to give that sort of advice.
What is not clear is what safeguards there will be for employers who comply with the law who do not just provide information and invite someone in for a chat, but who provide the premises and possibly pay for someone to come in and provide financial advice to their employees. Will employers face not merely the cost burden of providing the advice, which is possibly a legitimate thing to expect, but a potential comeback in relation to advice that they paid for and facilitated, in the sense that they provided a space in which it could be given?
The advice could relate to employer-related provision. That would be another aspect of the issue. We are not just talking about someone coming in and advising employees about stakeholder pensions or something that has nothing to do with the employer. We could also be talking about contributing to employer-sponsored provision or employer provision. Will there be any comeback on employers? That is the key question. Can the Minister put on the record his
assurances that employers who conform with the clause will not find themselves being sued for giving or facilitating advice that they were not entitled to provide?
We have had a useful discussion. We know what the clause is about. It provides a power to require employers to provide their workers with access to information and advice about pensions and savings for retirement. Many employers, of course, are committed to supporting their employees in providing for their retirement. Many ensure that employees have access to a good pension scheme and good information about the benefits of being a member of that scheme. Other employers, sadly, are more reluctant in that regard. Although this is a time to scrutinise our proposals, I look forward to other occasions when Opposition Members might want to be positive about what they propose.
The power that we are seeking will require those employers who are contributing little or nothing towards their employees' pensions to ensure that those employees at least have access to a decent standard of pension information. We seek that power on a reserve basis. Before we decide whether to make regulations, we want to gather evidence on which method of delivering pension information and advice through the workplace is most effective. Our aim is to make people seriously consider the provisions that they are making for their retirement and what might make a real difference to savings levels.
A pilot study will consider the issues and the results will be published. The study will commence this summer and the results will be published in summer 2005. We also need to consider other developments, such as the review of the Financial Services and Markets Act 2000, which governs what employers can and cannot say to their employees about pensions. Such changes mean that the reserve power needs to be broadly drawn. That means that if we decide to exercise it, Parliament will need a further opportunity to scrutinise our plans in full. Therefore any regulations made under the power will follow the affirmative procedure.
I hope that I have said enough to satisfy the hon. Member for Eastbourne about our good intentions. The hon. Member for Northavon asked whether employers will be liable for misleading advice delivered through the workplace to their employees. The answer is no.
Question put and agreed to.
Clause 195 ordered to stand part of the Bill.
Further consideration adjourned.—[Margaret Moran.]
Adjourned accordingly at twenty minutes past Five o'clock till Thursday 18 March at half-past Nine o'clock.