Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following:

New clause 42—Holistic Value for Money Assessment—

“(1) The Secretary of State must make regulations to require that any value for money assessment framework for defined contribution pension schemes includes holistic indicators beyond cost and return.

(2) The framework must include consideration of—

(a) whether the scheme offers access to free or subsidised pension advice or guidance;

(b) the frequency and impact of pension transfer delays for members;

(c) other qualitative indicators as may be prescribed, including those related to member engagement and support services.

(3) Regulations under this section may require that—

(a) schemes are rated according to both quantitative and qualitative indicators of value;

(b) schemes publicly disclose their performance against these holistic criteria;

(c) the frequency of assessment is sufficient to ensure up-to-date information for regulators and members.

(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This new clause ensures that the value for money framework for defined contribution schemes includes whether schemes offer free or subsidised advice, and the extent to which pension transfer delays occur and affect member outcomes.

To ensure effective comparability across arrangements, it is necessary to have a clear and standardised assessment of how value is determined. Clause 12 will enable those undertaking the assessment to be clear about the method that they should follow and the criteria to be used. It will allow regulations to detail how a VFM assessment is to be made, the factors that need to be taken into account when making comparisons, the metrics to be used and, importantly, how such comparisons should be made. The clause also gives the flexibility for VFM regulations to introduce benchmarks that schemes should compare their arrangements against. That is necessary to improve comparability and transparency, and to help drive competition among schemes. That will help improve returns for members.

I turn to new clause 42, tabled by the Liberal Democrats; I am grateful to them for their contributions to the debate. Measuring the quality of services provided to members is an important aspect of the VFM framework—I support that entirely. It ensures that we assess not only the quantitative value provided by pension schemes, but the qualitative. Under the VFM framework, the Secretary of State will have the power to require schemes in scope to report on and assess the quality of the services provided to their members; I just made the point about the absence of that in Australia but the fact that it will have a role within our framework. Clause 11 provides for categories of information that schemes may be required to disclose to include

“the quality of services provided to members of the scheme”.

Further detail on the metrics for measuring quality of services will be set out in regulations. It is crucial that metrics are set out in the regulations so that we have flexibility to respond to changes in the pensions market and to learn from operational delivery—again, that is something we have seen in Australia. For that reason, we believe that the current legislative framework is sufficient. I ask the hon. Member for Torbay not to press the new clause.

Clause 12 seems fairly reasonable in its approach. Liberal Democrat new clause 42 seems in the broadest sense to follow our Amendment 254 in respect of the Australian model; should it be pressed to a vote, we would be happy to support it. I have nothing more to add.

As I stated earlier, one of our key drivers is making sure that people are able to make quality, informed decisions about their financial long-term future. The debate on the new Clause drives that agenda. I am sure that the Minister has the best intentions, but what we are discussing is still within regulations that have yet to break cover. We would be more comfortable if it was in the Bill rather than tucked away in regulations. We will seek to press the new clause to a vote when the time comes.

Question put and agreed to.

Clause 12 accordingly ordered to stand part of the Bill.