Schedule 1

Part of Pensions Bill – in a Public Bill Committee at 12:00 pm on 5th February 2008.

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Photo of James Plaskitt James Plaskitt Parliamentary Under-Secretary, Department for Work and Pensions 12:00 pm, 5th February 2008

The point that I am getting at is that the amendment is designed to cement a figure in the Bill and therefore impose a charge, which could significantly increase the scheme’s dependence on other forms of charging, including public support, which previously he said he wanted to ensure would not be unduly high because he wanted the scheme to become self-financing as quickly as possible. Flexibility in charging is essential to support that objective.

I cannot say what the charging structure and levels will be, for the reasons that have already been given. PADA is consulting on the structure. It will have to reach decisions about the structure before charging levels can be considered. Charging levels follow that because PADA has to do its work on the whole financial structure of the scheme, so it is not possible at this stage to predict what the charging levels will be or, indeed, whether they will be static. Lord Turner argued in his report that if, once the scheme was up and running, it worked in the way predicted and all other criteria were met, he was confident that a 0.3 per cent. charge was realistic. That is certainly the view that I would take, given the argument in the report.

There is a balance to be struck between the initial level of charges and the time that it takes for the scheme to become wholly self-financing. Given that, we need to allow the delivery authority both the time and flexibility to do its work before closing down options. The hon. Gentleman is seeking to close down options before that work starts, but that might impede the success of the scheme.