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30 Jun 2008 : Column 42
Lord Stoddart of Swindon: My Lords, like other noble Lords, I welcome the Statement and the report. The report is a good one and will tackle many of the problems. I had a particular note about the paragraph on page 4 that states:
“Patients want to be treated in environments that are safe and clean; to be shown respect and regard, compassion and kindness. The highest clinical quality can be undermined by letting the simple things slip”.
The noble Lord may recall that earlier this year I raised with him the question of mixed-sex wards and asked him when they would be phased out, as was promised. He said that the task was impossible at that time. Was the matter given further attention in this review? Can we expect to have a change in government policy that will phase out mixed-sex wards?
Lord Darzi of Denham: My Lords, in the debate that we had then, when the confusion was all about definitions and terminology, I was referring to mixed-sex accommodation. This Government are committed to ensuring the provision of single-sex accommodation and single-sex bays. That will be one of the parameters that we measure as part of patient experience.
Lord Kirkwood of Kirkhope: My Lords, does the noble Lord accept that quality at a local level depends on the context of the local level? One thing that the founding fathers of the NHS would be surprised at today is the disparity of provision in some of our most deprived communities, which suffer from financial, social and health inequalities. Can anything in his report give the House some succour by suggesting that future targeting in these areas will efficiently tackle some of the deprivation?
Lord Darzi of Denham: My Lords, I am grateful for the noble Lord’s intervention. My report addresses the inequalities that exist in health and healthcare, and the interim report also says that we need nationally targeted campaigns to deal with some of those inequalities. The noble Lord will be aware that the October report referred not only to health centres but to the fact that we are investing £100 million in the creation of new primary care centres in areas where inequalities are most challenging.
Pensions Bill
5.05 pm
Lord Skelmersdale moved Amendment No. 89B:
The Secretary of State must publish and lay before both Houses of Parliament a report annually on the impact of auto-enrolment on—
The noble Lord said: As with my previous amendment, this one also addresses another of the major issues that will decide the final success of the policy behind the Bill. Indeed, it would seem to address the most important one of all. As with means-testing, the issues
30 Jun 2008 : Column 43
The figures from the multitude of reports have been quite varied. Naturally, the Government are sticking by the most optimistic result—that of little or no levelling down and a large upswing in the size of pension saving from the target population of low to medium earners. Unfortunately, this rosy view is not shared by everyone, and the possibility that the qualifying test will drive many employers into personal accounts must be considered and, if possible, protected against. My noble friend Lady Noakes referred to that last week in the debate on Amendment No. 60A. In response, I noted that the Minister said:
“What matters is that the amount that goes into the scheme at least equals what would go into the scheme if the 8 per cent of the band on the definition of earnings”—
- “that is adopted were applied. We are not asking for that to be adopted in every scheme, simply that the contribution that goes into the scheme under the existing scheme’s rules produces at least that outcome”.—[Official Report, 23/6/08; col. 1300.]
I understand that but stakeholders still believe that the qualifying test will impose a burden on employers and, in many cases, will lead to their current schemes needing quite serious changes in order to qualify for auto-enrolment. To put it another way, it will not matter whether an employer’s scheme is calculated by reference to basic or gross pay as long as the total money going into the pension scheme is at least as much as it would be under the new personal account arrangements, which of course is 8 per cent.
If stakeholders have misunderstood the import of the Minister’s remark, the size of this burden rests largely on details that the Minister cannot yet tell us about. My amendment therefore does not seek to amend these later crucial decisions but, instead, to keep the issue alive and to ensure that research and the education of stakeholders, which I believe is vital, continue so as properly to inform and communicate those decisions. I beg to move.
Lord Oakeshott of Seagrove Bay: We on these Benches broadly support the amendment. The noble Lord is certainly right to say that this is one of the most important issues, if not the most important one, that arise from the Bill. Clearly, none of us can know at this stage what the effect of personal accounts will be and whether auto-enrolment will undermine existing schemes. It is very hard to disentangle that possible effect from the continuing decline of saving in pension schemes anyway. My only reservation is whether once a year is almost too much of a running commentary on matters which take a little time to become clear and whether every two or three years might be better.
Lord McKenzie of Luton: The amendment would require the Secretary of State to report annually on the impact of auto-enrolment; on the take-up of qualifying
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I am glad that the noble Lord has tabled this amendment because it provides me with an opportunity to outline our plans for monitoring and evaluating the impact of the reforms, which is very important. We are developing an evidence and data strategy to ensure that appropriate evidence is gathered on the pensions' landscape to enable monitoring and evaluation of the Government’s pension reforms. We have already started to engage with key stakeholders through a series of seminars on the current evidence base for pensions. We will publish a report of our work later this year and we plan to continue this dialogue with key stakeholders.
The Government already conduct regular surveys of the pensions' landscape at the industry, employer, and individual levels, including the Annual Survey of Hours and Earnings, which is an Office for National Statistics survey; the Employers’ Pension Provision Survey, a biennial DWP survey of employers; and the Occupational Pension Schemes Survey, an ONS survey of pension schemes, conducted each year. We are also conducting regular tailor-made surveys to track employers’ and individuals’ likely responses to the reforms. These include employers who plan to enrol their employees, anticipated participation rates, planned contribution levels and the likely impact on existing pension provision. A full evaluation is planned once the reforms have bedded in and then on an ongoing basis.
We will continue to work closely with key stakeholders, academics and other relevant government departments as we develop plans for the data and evidence strategy for monitoring the private pension reforms and for monitoring the Government’s wider reforms of the pensions system, including reforms to the state pension in the Pensions Act 2007.
The amendment proposed by the noble Lord, Lord Skelmersdale, would add further requirements on top of the plans that I have already mentioned. A new statutory duty would be placed on the Secretary of State, requiring him to produce an annual report on the impact of auto-enrolment. That duty in those terms may not fit well with the wider evaluation of the reforms and at worst could become a tick-box exercise.
In addition, if we had to adhere to that annual cycle as proposed, there is a risk that the proposed duty would perversely require the Government to impose additional reporting burdens on employers in respect of qualifying schemes. If we were required to produce a further annual report specifically covering participation and persistency in contributions in qualifying schemes, we could not rule out the possibility that we might need to seek further information or more frequent updates from employers, increasing burdens on them.
30 Jun 2008 : Column 45
We believe that it is important to continue to work with key stakeholders to identify the questions that need answering: what data are already available to identify evidence gaps and what is the most effective way to fill those? It is important to concentrate available resources on a balanced programme of data collection, monitoring and evaluation that has been developed carefully with key stakeholders.
I hope that that has given the noble Lord the clear assurance that we need to monitor and evaluate because in doing so we will build our understanding. However, I do not believe that the proposed narrow annual survey and report is the right way to go. It could, at the margins at least, be counterproductive, and I therefore invite the noble Lord to withdraw his amendment.
5.15 pm
Lord Skelmersdale: I am well aware of the reports that the Government publish around the pensions arena, including those that the Minister mentioned. Although I did not say so, I was trying to get at whether the ongoing evaluation of personal accounts, and indeed the new pensions regime, would automatically be included in those reports. I am grateful to the noble Lord, Lord Oakeshott, for his minor quibble that reporting every year, as proposed in my amendment, would be a bit too frequent. I accept that, but I will read carefully what the Minister said on the existing reports in the pensions arena.
I also note that the Minister will monitor and evaluate the report on the consultation, to be published later this year. Is it the Government’s intention to publish it before we finish proceedings on the Bill?
Lord McKenzie of Luton: I cannot give a precise answer to that, but I will check. I can see that it may be helpful if it can be published, but I am not sure that I can give that commitment without checking.
Perhaps I may take this opportunity to say a little more about the qualifying test and how the employer duty is discharged, which was raised by the noble Lord. Employers and schemes will receive plain English guidance on how to apply the qualifying test and to discharge the employer duties. We will consult on the content and format of the guidance. We have research under way to understand the information needs of small employers to ensure that we communicate with them in the most sensible way.
Lord Skelmersdale: I am grateful for that extra information, but I am afraid that it prompts the same question. I would assume that guidance will not be in final form until 2011, but that will not help the worries of the pension scheme managers, to whom we refer as stakeholders, during the passage of this Bill. Would it not be possible at least to have draft guidance before we finish with the Bill to give an idea of the kind of thing that is expected of employers, and rather more than the Minister has been able to give on our various
30 Jun 2008 : Column 46
Amendment, by leave, withdrawn.
Clause 30 [Effect of failure to comply]:
Lord Skelmersdale moved Amendment No. 90:
The noble Lord said: This is a simple probing amendment to explore why the Government chose to go down the route of giving the Pensions Regulator sole right to take action in the event of an employer failing to meet his obligations. The clause in Chapter 2 on compliance gives all manner of detail about the methods by which the Pensions Regulator can encourage an employer to meet his duties, and the penalties that can be imposed if he continues to disregard the notices under Clauses 31, 32 or 33. Clause 34, in particular, ensures that a jobholder should be able to have any missed contributions made up to him, but there are many other ways in which a jobholder can be disadvantaged by negligence on the part of his employer.
Some of these cases, such as the provision of false or misleading information, are covered in Clauses 40 to 42, which specify new offences. How will these two regimes operate together? For example, if a jobholder were to opt out based on misinformation fed to him by his employer, but the Pensions Regulator were to consider the breach too small to be worth the expense of going to court, what rights does the jobholder still have? As I understand the Bill, he has none. To return to repayment of contributions, when the employee chooses to opt out, the Minister indicated earlier that the worker’s contribution might be repaid to the employer in the expectation of it being passed on to its rightful owner. What powers does the jobholder have to ensure that that is done? I beg to move.
Lord McKenzie of Luton:I thank the noble Lord for this amendment because it gives me an opportunity to clarify an important point. Clause 30 aims to ensure that there is only one compliance regime for the new duties, which will be enforced by the Pensions Regulator. This means that an individual will not be able to bring an action against an employer solely—I stress, solely—on the basis that he has breached an employer duty provision. It does not affect any pre-existing right of action.
This amendment, which I understand is a probing amendment, removes that provision and enables individuals, alongside the regulator, to take action against the contravention of an employer duty. There will be a role for individuals in alerting the regulator to non-compliance through whistle-blowing, but allowing individuals to take action against employers directly could lead to duplication, confusion and increased employer burden as an employer could face action from the regulator and individuals at the same time.
We fully recognise the need for individuals to have access to other routes for redress if a situation of non-compliance has not been pursued or resolved to their satisfaction. A fairer, less burdensome way of achieving that goal is to enable individuals to make a
30 Jun 2008 : Column 47
Lord Skelmersdale: That might have been a hopeful opportunity, but it was also a fairly hopeful response. I shall come to this on another set of amendments, but I do not understand the difference between employment law and pensions law in this area and why they should be different. I agree with the Minister that if my amendment made it possible for there to be two prosecutions of the same employer for the offence, that would be total nonsense. I shall read carefully what he said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McKenzie of Luton moved Amendment No. 90A:
The noble Lord said: In moving Amendment No. 90A, I shall speak also to the other amendments in this group. This chapter introduces the provisions needed to establish the compliance regime for the new duties set out in the Bill. An effective and proportionate compliance approach is essential to the success of these reforms. Overall, our stakeholders recognise the need for an effective regime and for our approach to compliance. Before I begin, I acknowledge that we have tabled a number of amendments to the compliance provisions in the Bill, and it may assist the Committee in considering them if I explain briefly why this has come about.
The Pensions Regulator emerged as the organisation best placed to deliver the compliance regime following a thorough assessment of options. That decision was taken at a relatively late stage, which did not enable the compliance powers to be fully tailored to the regulator's existing legislative framework or its intended compliance approach. Hence, many of the amendments that we shall consider today are minor technical changes to ensure a proper fit with the regulator's existing powers, clarity of meaning and accurate expression of the policy intent.
I apologise for the fact that we are dealing with so many government amendments; I know that that does not make life as easy as it might be for the Opposition, in particular. If it would help to have a briefing from officials on any of them, that can be organised.
30 Jun 2008 : Column 48
It has also been necessary to propose minor amendments to the compliance provisions to ensure that they accurately reflect the employer duty provisions, enabling the regulator to respond effectively to all instances of non-compliance. In addition, some amendments have arisen from discussion in another place, where it was agreed further to consider certain issues raised about the compliance approach. In some cases, it has been necessary to table several amendments to achieve the same purpose. Where that has occurred, I hope that the grouping of the amendments will assist the Committee to consider them effectively.
With that introduction in mind, I turn to the first such group of government amendments. They are technical amendments intended to improve the drafting of the Bill to ensure that there is adequate protection for individuals in all cases where an employer has breached its duties. The amendments fall into three categories.
First, government Amendments Nos. 90A, 90K, 90M, 90U and 90V, 92B and 92C, 92E and 92G, relate to Clause 8, which gives individuals who do not have qualifying earnings the option of requiring their employer to make arrangements to enrol them into a pension scheme. As the compliance clauses are currently drafted, the use of the term “jobholder” will exclude workers who do not have qualifying earnings but are in pension schemes by virtue of Clause 8. Those amendments will ensure that, where Clause 8 applies, it can be enforced—in other words, they will enable the regulator to use a single compliance regime in respect of all workers.
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