Clause 1

Part of Pensions Bill – in a Public Bill Committee at 10:30 am on 22nd January 2008.

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Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions) 10:30 am, 22nd January 2008

Two other areas of clause 1 caught my eye and I would like to ask the Minister briefly about them.

The first is agency workers. I have been reading the excellent House of Commons Library brief on the subject, which makes it clear that according to case law an agency worker may be regarded as an employee of the agency for which he is working, as an employee of the client of that agency or, in some circumstances, as self-employed. That has significant implications for the administration of personal accounts. There is a good case for agency workers to be auto-enrolled as they need decent pension provision just like everyone else. However, there is a particular concern that it is the organisation responsible for the payroll administration of that employee that should have to auto-enrol and administer personal accounts. I foresee all sorts of administrative problems if that were not the case. It would be difficult for the employee, the employer and this country’s thriving agency worker sector, and we would not want to do anything to harm that sector.

I hope I am not expressing my ignorance, but the second unclear area was that of employees of British companies, or perhaps people in the armed forces, working overseas. Paragraph (a) says that a jobholder is an employee or worker

“who is working or ordinarily works in Great Britain under a contract”.

The employees of some of our multinational companies may have a home service type of employment contract but not be locally employed. Presumably they are not therefore ordinarily working in Great Britain. Does that mean that they cannot be auto-enrolled? For example, I  am not sure whether the staff of HM Diplomatic Service are always paid under local conditions or whether they continue under the PAYE system and pay into their UK national insurance accounts. That aspect of the Bill is not clear either and I would be grateful if the Minister could elaborate on both those areas.