New Clause 4 - Power to exempt certain cross-border employment from enrolment duty

Part of Pensions Bill [Lords ] – in a Public Bill Committee at 6:30 pm on 12th July 2011.

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Photo of Steve Webb Steve Webb The Minister of State, Department for Work and Pensions 6:30 pm, 12th July 2011

Just to be clear on something that I just said, I want to ensure that the record is absolutely right.

On the hon. Lady’s question, the folk that we are talking about will on the whole be higher-paid, pensioned workers. They will not be folk earning £9,000 in part-time, low-paid jobs, who we need to worry about. We do not glibly dismiss the pension position of 30,000 people, but it may well be that they are precisely the sort of people who can sort their own pension arrangements out. We do not want to require firms to enrol them in schemes that are inconsistent with other legal requirements. That is the point I am trying to make.

If we do not put new clause 4 into the Bill, it is technically possible for an employer to have a legal obligation to automatically enrol a jobholder—that is the term in the 2008 Act—but because that person is also a qualifying person, to be unable to find a scheme willing or able to provide a work-based pension to that person, because of all those cross-border duties. We could require an employer to put someone into a pension, but the employer could be unable to find a pension to put them into. We do not want to put employers in that position. We could be talking about some 30,000 to 35,000 people, but as I have indicated, some of those people could already be in a pension scheme, so the real number involved is likely to be lower.

The possible ambiguity in what I said related to the position of secondees. To make the situation absolutely clear, the 30,000 to 35,000 people includes those who are seconded, but those are exempted. So that is the worst-case scenario. For the avoidance of doubt, I want to make that clear.

The EU has recognised that there are significant barriers in enabling schemes to operate effectively across borders.