Clause 50

Part of Pensions Bill – in a Public Bill Committee at 1:00 pm on 31st January 2008.

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Photo of Mike O'Brien Mike O'Brien Minister of State (Pension Reform), Department for Work and Pensions 1:00 pm, 31st January 2008

To clear up any doubts, although I doubt whether there are any doubts, we intend to use the power to create the personal accounts scheme, which will be a defined contribution occupational pension scheme. However, defined contribution occupational pension schemes take a number of forms. Personal accounts will have various unique features, particularly given the target audience, the way in which they will be organised and the way in which we are setting them up. We therefore took the view that rather than having the legislation say that the  pension scheme was of a particular kind—thereby risking someone at some point deciding to take a judicial review as to whether our decisions fitted exactly with a particular definition—it was better to take a broad power and to be very clear about how we intend to use it.

There is no doubt that the understanding of the hon. Member for Inverness, Nairn, Badenoch and Strathspey is correct. That is what we intend, and there has been no deviation from the Government’s intentions. We have set out the power in this way because we do not want to raise legal risks at a later stage by trying to define the scheme narrowly. Personal accounts will be similar, but not identical, to other DC schemes. We should not pretend that it is a particular kind of pension scheme in the legislation, because some might say, “Well, the way you are working does not exactly fit that definition”. That is the only reason why we have taken that view. With that reassurance—the hon. Gentleman is entirely right about our intentions—I hope that he will withdraw the amendment.