Draft Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 |
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Mr. Plaskitt: I shall try to respond to as many of the points that have been raised in the debate as I can. If the hon. Member for Eastbourne will forgive me, I shall start with the comments made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), because quite a few of his questions were technical, so it may assist the Committee if I put some points on record. The hon. Gentleman asked what “spirit of co-operation” means. Basically, it means what it says. It means that employers must work with employees to ensure a fair consultation exercise, and if employers need to know what that means, the regulations set out the steps that are recognised as constituting a fair consultation process. Of course, one hopes that it will be done in a spirit of co-operation; that is what the regulations say, because that is the point of carrying out the consultation. During the debate, consultation has been rather pooh-poohed by some Members, but we are talking about consultation on schemes, not regulating how decisions are made, and I am surprised that the push that we are trying to give through regulations to ensure that consultation takes place is being questioned. The experience of industry that engages meaningfully in consultation is that that enhances the way that it does
The hon. Gentleman asked whether there is redress if things do not happen properly. That, too, is covered in the regulations. The regulator has powers, and, as is the case in all matters that relate to the pensions regulator, he will take a scheme-specific, risk-based approach to matters. It is not appropriate for Ministers to try to prejudge the circumstances under which the regulator may intervene; that is for the regulator. The hon. Gentleman asks whether firms that come under the 50-employee threshold will consult. Obviously, we hope that they will. As the hon. Gentleman knows, an argument for having a threshold at some point is that, as firms become larger, issues of consultation begin to emerge, simply because of the size of the ventures. We believe that it is generally quite straightforward and simple for firms with fewer than 50 employees to undertake a consultation exercise. There is simply a need to give larger firms, for which consultation may sometimes not be so straightforward, a push towards doing it.. However, it is important for the appropriate regulations to be in place, and we recognise that, in line with the ICE regulations. The hon. Gentleman asked me to give more information about the triggers and what makes a consultation obligatory. They are set out in the regulations but it might help if I clarified that further. For occupational pension schemes, the requirement for consultation would be triggered by an increase in the normal pension age under the scheme, closure of the scheme to new members or to future accruals of benefits, removal of the employer’s liability to make contributions to the scheme, or the introduction or increase of members’ contributions. Triggers for a consultation on occupational pension schemes that are not money purchase schemes would be a change from a defined benefit to a money purchase scheme or a change to the basis for the future accrual of benefits in the scheme and/or a reduction in the future accrual of benefits. In the case of a personal pension scheme, consultation would be triggered under the regulations by the removal or reduction of the employer’s contribution to the scheme or an increase in the member’s contribution. I have tried to give the most comprehensive account that I can of all the issues that the hon. Gentleman raised. He finally tempted me to consider the financial assistance scheme, but that is not the subject of the regulations. I should be straying beyond my brief if I went into that matter; we have heard the hon. Gentleman’s points. Column Number: 13 The hon. Member for Upminster (Angela Watkinson) asked me why the provision does not apply to public sector schemes. Their existing consultation arrangements are already written into their agreements, so there is no need to bring the regulations into play for them. Like my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), I was becoming a little confused about what message the hon. Member for Eastbourne was trying to give us about regulation. We are making regulations about consultation. I do not know what he understands by the word, but I did not think that it was a greatly contested term. To consult is to engage in a dialogue with someone. When the hon. Gentleman’s party was in power, the Government consulted many times, and I do not think that he argued then that any consultation about, for argument’s sake, introducing the poll tax, obliged the Government to accept its outcome. Indeed, the regulation would be of an altogether different type if it strayed into vetoes and how decisions are made. The regulations concern consultation only, and are designed to ensure the establishment of proper procedures and requirements for consultation. We consulted on the regulations and have chosen to take on board much of what emerged in the course of the consultations. We did not have to do so, but we carried out a meaningful consultation in a sensible spirit. However, it is for Government, in the end, to decide. I would argue that we have devised more widely acceptable and better regulations as a result of the consultation. The people involved who will be caught by the regulations understand why we have introduced them. Similarly, if consultation has been carried out on the reform of the pension system and all the employees in the scheme know and understand why the changes have been made and have had a dialogue about it, everyone is in a better position. Those are the benefits of the regulations. Angela Watkinson: The Under-Secretary says that the conditions attached to public sector pension schemes are already in place, and that, therefore, there is no need to include them in the set of regulations. Does he think that they are sufficiently robust, especially if I tell him that, at present— The Chairman: Order. I am afraid that what is not in the regulations cannot be debated in this Committee. I have been a little lenient on two points—the hon. Lady’s and a previous one—but we cannot allow ourselves to be drawn into what should be in the regulations. Mr. Plaskitt: Thank you, Sir John. I shall abide by your wise ruling. Column Number: 14 Let me return to some points raised by the hon. Member for Eastbourne. I am sorry that he used the expression “sham” to describe the process. I do not believe that employees who will benefit from consultation in the future—employees who may not have been consulted previously about changes to their pension scheme—will view it in that way. They may or may not be happy about the decisions that are ultimately made, but their reaction to decisions on which they were consulted along the way will be different from their reaction if they had never been consulted and decisions were implemented without their by-your-leave en route. Mr. Waterson: It is a bit like the old saying about whether it is better to have had money and lost it, or never to have had it in the first place. The Under-Secretary talks about consultees feeling better having had the benefit of consultation, but does he understand the argument that employees could be consulted, and perhaps become excited about being consulted on changes to their pension arrangements, but the employer could go ahead with plan A anyway? That is the point that I am trying to make. It is not very complex. Mr. Plaskitt: I accept that it is not a complex point, but those who have been involved in the consultation on the regulations have not perceived a fatal flaw in them. If they had, the TUC, for example, would not be strongly supporting the changes that we are trying to make. Everyone has seen their virtue. I trust that that addresses the hon. Gentleman’s point. I hope that hon. Members will agree that this has been an interesting and comprehensive debate. I have had the opportunity to explain the underlying purpose of the statutory instruments. The regulations on consultation by employers aim to give members who are affected by a proposed change to a workplace pension scheme, or their representatives, an opportunity for meaningful discussion with the employer about the change, and to ensure that individuals are fully aware of the implications of changes to their pension. I commend the statutory instruments to the House. Question put and agreed to. Resolved,
EMPLOYEES (AMENDMENT) REGULATIONS 2006 Resolved,
Committee rose at thirteen minutes past Three o’clock. |
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