Clause 1

Part of Pensions Bill – in a Public Bill Committee at 10:45 am on 22nd January 2008.

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Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions 10:45 am, 22nd January 2008

Thank you, Sir Nicholas, I am aware of that.

I will deal with the hon. Gentleman’s point about his constituents with multiple employment. That is an issue of some concern. We have worked as hard as we can to see whether we can find an easy way of resolving the issue. If a person has multiple—perhaps seasonal—jobs, each earning less than £5,035, which is the current rate, then that person will not be automatically enrolled. There will be no obligation on them to have a pension scheme, just as they have no obligation on, for example, national insurance. There are a number of exceptions in relation to the lower level of £5,035.

One of the problems that we encountered in looking to find a resolution is that so many permutations are possible—other rules also apply below that level, such as for national insurance. Our view is that it would create more complexity and difficulty if a series of new obligations were imposed, and it would provide a level of deterrence on employing people. To ensure that such seasonal jobs remain, in the end our view is that complexity and administration difficulties for employers mean that we are better off not trying to change the law. If we were to change the law, we felt that employers would not be likely to employ people for a few weeks on low-paid contracts. Employers would probably find some other way of dealing with the issue, such as offering overtime to other workers, rather than employing people for short periods. In that way, we would interfere with the labour market.

If someone has a job that brings them more than £5,035, they would be entitled to automatic enrolment with that job. They could ask their other employers to make further contributions, but such contributions would be voluntary, and they could make voluntary contributions into personal accounts. That is how we deal with that point. I do not dispute that that is not an entirely happy situation, but it is, I regret to say, about the best we can do in a difficult circumstance.