I am grateful for that indication and although I will go into a bit more detail, I will go into considerably less detail than I might otherwise have done. There will be people out there who will be totally tantalised until the end of time as to what I was coming to say. Although the Minister’s intervention was partially helpful, and I accept—I think the institute accepts—that it is perfectly possible to deal with this point by regulation, the institute wants a clear idea of where the Minister is going on this. I share that concern.
I will touch upon the main points of concern to the Institute. In a traditional audit of possibly one million employers—of which many thousands will be small employers—often with very mixed and different record-keeping systems and so forth, all the contribution records of all those employers would need to be checked so that an auditor could give an opinion. This is vastly time consuming and vastly expensive. The ICAEW says it is firmly of the view that it would be impractical and that the enormous cost would be of little benefit to the members who would have to bear it. The basic point it is making is that there is a confusion between an audit and an overall check on all internal systems and controls. What would be meaningful for savers and personal accounts would be to call for a third party to check that the administration is conducted properly. It calls this assurance engagement, which looks at all the internal controls—operational as well as financial.
There is a precedent apparently. According to the institute, following the introduction of internal controls requirements under the 2004 Act—who could forget it?—a number of institutions that work for pensions schemes, trustees in managing scheme administration, scheme investments and custody have adopted this controls-based approach. It says that it would be cost-effective, and will provide the appropriate comfort to job holders and savers. I think the institute has a very good point. Moreover, having a provision whereby this is reported to Parliament, perhaps annually, also makes a lot of sense.
I accept the Minister’s point that this could, and perhaps should, be dealt with by regulation. But the institute could not be clearer in its own conclusions and who am I—or indeed, who is the Minister?—to argue with that expert view? I therefore press the Minister to perhaps be a little less coy about telling us and, in particular, the institute where his thinking is going on this and how he intends to deal with it.