First, I want to echo some of the comment made by the hon. Member for Eastbourne about both the importance of the deregulatory review and the work that came out of that, and of the deregulatory agenda more generally, aimed at protecting, where possible, existing defined benefit schemes. Some of the matters that we will come to discuss, particularly under the new clauses, are ones for which I have considerable sympathy.

However, I would be grateful for a bit more information from the Minister on the evidence base for the Government’s decision to include the provision to reduce the cap on growth funds for deferred members of certain occupational pension schemes from 5 per cent. to 2.5 per cent. Obviously, the main argument in favour of clause 79 and the associated schedule 2 is that it will provide support for the remaining defined benefit schemes. That certainly has been the representation made to the Committee by organisations such as the National Association of Pension Funds and the Engineering Employers Federation, which made the point both in its evidence and the briefings it supplied.

I would like to know what evidence the Minister has that this will do something to slow the closure of defined benefit schemes. It is interesting to look at what the independent reviewer said around this idea.

“We are not inclined to recommend a change in approach to the revaluation requirements for deferred benefits. Although there will be some cost savings for final salary schemes (partially offset by extra administrative costs due to the need to revalue two separate tranches of benefit at separate rates) these would be made entirely through reduction in the value of the benefits of those who leave the scheme before pension age. We have seen no evidence that this change would ease administration, encourage risk sharing or slow closure of final salary schemes.”

That is a fairly strong view from the people the Government asked to conduct the independent review into deregulation. I would be interested to hear on what basis the Government and their officials reached the opposite conclusion, which led to the inclusion of this provision in the Bill.

Certainly, representations from other organisations—I particularly draw the Committee’s attention to the TUC and to Unite in this context—suggested that what this provision could potentially mean is a significant erosion of some members’ benefits. Depending on the measure that is used, inflation is currently running at around 4 per cent., which would mean that deferred pensions  would be worth 1.5 per cent. less per year in real terms at the moment, if this arrangement applied now. Over a long period, if those arrangements were maintained—the Minister will no doubt draw attention to the Government’s inflation target and so on—this could amount to deferred pensioners, perhaps those who deferred a long time in advance of retirement age, losing quite a considerable proportion of the benefits they would have expected to receive.

As with many other provisions in the pension system, there is currently, therefore, a risk. I wonder to what extent the Government have evaluated the possibility that this change could potentially have a significant effect, particularly on women pensioners. Women pensioners suffer from a number of different aspects of our pension system and I would like to hear from the Minister that the impact on women is something he has particularly taken into account in considering and bringing forward the proposed change.

To quote the independent reviewers again:

“Although available data is patchy, it seems to us that women could be proportionately affected by a reduction in the cap, because they are more likely to earn pension benefits early in their careers and then leave the workforce for periods of time to undertake caring responsibilities.”

Clearly, in the Bill that went on to become the Pensions Act 2007, the Government made the argument that at least some of the changes that they were bringing forward were there to support and advance the position of women pensioners. Though the Bill did not go as far as some of the amendments tabled by my hon. Friend the Member for Yeovil (Mr. Laws) at that time, we did welcome the progress that was made. There is a concern, however, that the current Bill—subject to what the Minister has to say in response about the evidence he has looked at in relation to the impact on women pensioners—is actually sending some quite mixed messages.

The argument, which has some force, that has been advanced particularly by the NAPF is that the measures contained in the clause and in schedule 2 are necessary to help protect existing defined benefit schemes. The representation from the TUC has suggested that this change might, in some circumstances, encourage employers to close high-quality existing schemes, saying:

“The statutory revaluation cap also provides protection for current employees in defined benefit pensions, not least when employers make changes to schemes. If for example a scheme was closed to future accruals, all the existing members would be treated as deferred members with their benefits adjusted for inflation up to statutory cap.”

In other words, if the scheme is closed and people are therefore able to apply the lower cap that is proposed, there is a potential advantage to employers of closing the scheme. That is the TUC's argument. I wish to hear what consideration the Minister has given to that important point, because it needs to be thought through properly before the item we are discussing is put on the statute book.

Finally, I should like to hear the Minister’s answer on this complicated issue, about which there are arguments on both sides. I wish to be reassured that the impact that the provision may have on young people's incentive to save was considered properly by the  Government when drafting the clause. Clearly, in the modern labour market, we all know—I guess that Members of Parliament are more conscious of it than most—that there is no such thing as a job for life. [Interruption.] Perhaps the Minister thinks there is; perhaps the hon. Member for Eastbourne does. People often move from job to job and might have several jobs—or even two, three, four, five or six jobs in a year—and under the Bill there will be the opportunity for automatic enrolment in respect of every one of those jobs, because having left an employer and moved to other employment, people are therefore deferred in the context of earlier employment. What impact does the Minister think the reduction in the cap would have on the incentives for people to join pension schemes throughout their lives, given that doing so could result in a reduction of the benefits that they could receive from the pension schemes from earlier periods of employment?

I should be interested to hear the Minister's answers to all those important questions, before we move on and agree to the clause standing part of the Bill.