Clause 31

Pensions Bill – in a Public Bill Committee at 4:15 pm on 29th January 2008.

Alert me about debates like this

Calculation and payment of contributions

Photo of Paul Rowen Paul Rowen Shadow Minister, Work & Pensions

I beg to move amendment No. 95, in clause 31, page 13, line 14, leave out from ‘within’ to ‘after’ in line 15 and insert ‘three months’.

Again, this is a probing amendment, along the lines of the previous discussion. In clause 31 no period is specified in which payment should be made. We have suggested three months and I am interested in what the Minister thinks might be a reasonable timeframe. In the consultation we had, the lack of a time period for contributions to be paid was seen as an issue that perhaps should be looked at. I am easy about whether the Minister thinks it should be three months, six months or within a financial year.

Following on from the previous discussion, if nothing else, the principle that there should be a payment period within which or after which interest will be charged needs to be set down. If the Minister introduces the exception on interest it is important that we agree that payment is made within a certain period, after which the employer is liability for interest.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

The hon. Gentleman has raised a good point. I am not entirely sure whether three months would be the right figure. Many of us get chased up a lot sooner than three months if we owe money, and rightly so in many cases. Provided, as we have debated, the payment is made with interest, it perhaps does not matter exactly what that figure is. The important point is that the payment is made and that it is made with interest, but the hon. Gentleman is right in that the payment needs to be chased up.

Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions

I have a lot of sympathy with the views expressed by the Liberal Democrats on this issue. Employees should not be disadvantaged by their employer’s failure to comply by not paying contributions on time. The compliance regime is designed to place employees in the position that they would have been in had their employer complied. Subsection (2)(c) proposes that after a set time period employers should be required to pay both their and their employees’ contributions. The hon. Member for Rochdale is right that various stakeholders, including Help the Aged and the TUC, have expressed an interest in this issue. Before we identify a period—three months is the one for which I have some sympathy—I want to discuss with the stakeholders, including business organisations, what the best period would be. I think the way forward on this is to allow us to consult properly before taking a final view, including about the appropriate length of time in question. We therefore propose that details should be consulted on and set out in secondary legislation when this issue has been further considered. In principle, I am with the hon. Gentleman. Although I will not commit the Government to it, I am even with him in thinking that three months sounds like a reasonable period. However, I want to hear all the arguments before I make a final decision, and I want the business community, as well as other stakeholders, to have a say. On that basis, I hope he will feel able to withdraw the amendment.

Photo of Paul Rowen Paul Rowen Shadow Minister, Work & Pensions

I am grateful for the Minister’s assurance with regard to this issue. I know it will be welcomed by many groups, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 31 ordered to stand part of the Bill.