 House of Commons |
Session 2007 - 08 Publications on the internet General Committee Debates Pensions Bill |
Pensions Bill |
The Committee consisted of the following Members:Mark Hutton, Committee
Clerk
† attended the
Committee
Public Bill CommitteeThursday 24 January 2008(Afternoon)[Sir Nicholas Winterton in the Chair]Pensions Bill1
pm
The
Chairman:
We are a bare quorum, but we are a quorum. May I
advise the Government Whip that I have to be able to see seven members
of the
Committee?
Depending
on how long the Committee wishes to deliberate, I will probably seek a
short suspension after three hours, which I think would be relatively
sensible. I am not sure how we might be interrupted by Divisions in the
House. We will have to take that as things
arise.
Clause 9Information to be given to the Pensions Regulator
Andrew
Selous (South-West Bedfordshire) (Con): I beg to move
amendment No. 136, in clause 9, page 5, line 10, after
‘Regulator’, insert ‘or HM Revenue and
Customs’.
The
Chairman:
With this it will be convenient to discuss
amendment No. 88, in clause 14, page 7, line 10, at end
add—
‘(3) Every employer
must register their qualifying pension scheme with the
regulator.’.
Andrew
Selous:
Amendment No. 136 was tabled in the same spirit
that informed some of our earlier debates around pay-as-you-earn:
trying to simplify things for employers, and making the administration
of personal accounts as small a burden as possible for
employers.
I fully
accept that the pensions regulator will need access to information
about personal account schemes that are set up by employers up and down
the country. The purpose of this amendment is to determine whether
there is a less burdensome way for employers to get that information to
the pensions regulator. The assumption underlying the amendment is that
there is, or could be, an information gateway between Her
Majesty’s Customs and Revenue and the regulator. Can the
Minister confirm that?
Andrew
Selous:
The Minister is helpfully nodding at me, so I will
assume that that is the case or that it could easily be the case,
although I do not wish to pre-empt anything that he might say when he
replies.
Putting that to one side for a
moment, the Minister may well be aware that Sir David Varney conducted
a review into integrated government in late 2006. The proposal that
information could be routed through HMRC to the pensions regulator was
exactly the type of recommendation that he had in mind when he wrote
that report. The amendment would make life a lot
easier.
We should not
lose sight of the extra regulatory burden, in terms of both cost and
time, that will be put on employers, especially smaller ones. We all
agree that this is something that should be done and that the cost is
worth while for the result that we all hope to see: many millions more
people with a decent pension income in retirement. It is important,
however, that we do not inflict any unnecessary burdens on the economy,
which is set for a slightly more problematic year.
That is the purpose behind this
amendment, which arises from a recommendation made by the Institute of
Chartered Accountants in England and Wales. The institute’s
members audit employers up and down the country and are very familiar
with processes of transferring information. They are also well aware of
the needs of employers and businesses. I hope that what I am
proposing—even if not in the exact form of words used in
amendment No. 136—will find favour with the
Minister.
Paul
Rowen (Rochdale) (LD): I support the comments made by the
hon. Member for South-West Bedfordshire about the inclusion of HMRC. We
all want to ensure that information is collected and made available as
simply and straightforwardly as possible without being a burden to
employers, especially small employers.
I want to speak primarily to
amendment No. 88, which has been suggested by the TUC. I hope that it
will find favour with the Government. It would ensure that all pension
schemes were properly registered with the pensions regulator. Although
the vast majority of employers will run excellent schemes that benefit
their employees, it is a sad fact—as we have seen in relation to
people with second pensions—that there has been some mis-selling
and people have lost out. A very tiny proportion of employers might
seek to have a scheme that does not meet the best objectives of the
Bill. All we are asking is that each scheme is properly registered with
the regulator.
There
will obviously have to be a change to the way in which the regulator
operates. I know there has been some discussion about whether the
regulator or HMRC should have that role. The Government have taken the
view that it should be the pensions regulator, and that body will need
beefing up and to change. The amendment just seeks to ensure that
registration is one of the first things to happen to a scheme.
Therefore, the compliance mechanism that the pensions regulator will
introduce would ensure that all employers, not just the best ones,
would meet the standards that we expect.
Mr.
O'Brien:
May I confirm to the hon. Member for South-West
Bedfordshire that I have the agreement of HMRC and its Ministers to
share the required information, particularly on the numbers of people
who are employers? To carry out the exercise, we will
need to know who are employers and who has a pension scheme. As a
result, we will know who has not registered as having a pension scheme
and whether they are an employer who has not registered. That is a
crucial piece of
information.
This will
work by the employer registering with the regulator on the internet to
say that they have a pension scheme and what it is. That should be a
fairly straightforward way of giving the information. They will not
need to register with HMRC, just with the regulator. Most of them will
be able to do it on the internet, but if they do not have that
facility, other facilities will be available. They will be able to
ensure that the information is provided. HMRC will be able to say who
is registered as an employer and we can then compare the data. That
sort of information exchange can be carried out fairly
straightforwardly.
I
very much appreciated the straightforward way in which the hon.
Gentleman spoke to amendment No. 136. The amendment would make
HMRC responsible for collecting the information from employers, while
the responsibility for delivering the rest of the compliance regime
would rest with the pensions regulator. Involving two bodies in the
compliance regime would result in not reduced costs, but increased
costs and additional IT system requirements, because the two
organisations would need to be equipped to work with employers on
different aspects of the compliance regime. It could also result in an
increased burden for employers, who might have to deal with both HMRC
and the pensions regulator in relation to the new duties. We would
rather keep the obligation on employers to deal with HMRC as they have
always done, while dealing with the pensions regulator in relation to
the new duties. Employers would know that on pensions they were to deal
with the pensions regulator. That is fairly
straightforward.
In
practice, most employers running pension schemes should have to do very
little other than to inform the regulator that they have a
self-certified pension scheme. That would be one that takes them
outside the requirement for registration for personal accounts, or one
involving an alternative kind of pension scheme. The system should be
fairly straightforward for the
employer.
I
understand that amendment No. 88 has been sponsored by the TUC. While
we all have a great deal of respect for the TUC, I think that here it
is just clarifying the requirement that every employer must register
their qualifying pension scheme with the regulator. We intend that in
any event, but we would rather achieve it through regulations, and have
the obligations set out for employers in regulations. That would be the
better way of dealing with
this.
Given
the reassurance that we intend to have a fairly easy way for employers
to register their pension scheme with the regulator, I hope that that
the hon. Member for South-West Bedfordshire will withdraw the
amendment.
Andrew
Selous:
I am reassured by what the Minister says, and I do
not intend to press amendment No. 136 to a
Division.
It
was never our intention that there should be two bodies with which
employers had to deal in respect of personal accounts. The Minister has
given the Committee an assurance on the sharing of information between
the
two bodies, and I am satisfied that that will reduce the burden on
employers. I beg to ask to ask leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Amendment
made: No. 124, in clause 9, page 5, line 12, at end insert
‘and [Workers without qualifying
earnings]’.—
[Mr.
Mike
O’Brien
.
]
Question
proposed
, That the clause, as amended, stand part of the
Bill.
Andrew
Selous:
As we are dealing with clause 9, I think that it
would be apposite to ask the Minister to say a little about the
provision of resources for the pensions regulator. Obviously, the body
will have to deal with a vastly increased number of pension schemes and
will be responsible for a very different landscape. How will the
pensions regulator be geared up to deal with that, and how will it be
financed and
resourced?
1.15
pm
Mr.
O'Brien:
We took the view that the pensions
regulator—TPR—was the best organisation to carry out this
work. It has a very good reputation with the pensions industry and is
broadly supported. However, it does a different job from the one that
we are now asking it to do, so the hon. Gentleman is right to press me
on how it will carry out its
duties.
We are in
discussions with TPR about the new budget that it will require. It has
been allocated the role relatively recently, and it is scoping what it
will need. The way in which it will develop its procedures will be, to
some extent, dependent on the outcome of the Bill. Assuming it passes
broadly intact, the regulator will be in a position to look at what
extra facilities and staff it needs. Then, during the course of this
year and probably into next year, we will be doing detailed work on its
budget. The straight answer is that some of this is still to be
decided.
We are,
however, very conscious that we are asking TPR to carry out a different
role. It has an excellent reputation for what it currently does, and we
expect that to carry over to the new work. The role will not be highly
burdensome. It is not anticipated that TPR will interfere with the work
of employers or cause lots of regulatory problems for them. There will
be a simple model whereby TPR will deal with specific complaints and
cases in which it is clear that someone is registered as an employer
with HMRC, but not with TPR. TPR will then aim to find out whether that
was an oversight by the employer, who will be asked to register. No
penalty for late registration is envisaged. If the employer still
failed to register, they would be given reminders, and then some of the
penalties would be brought into
effect.
In terms of
the organisation of TPR, we will need a basic structure to get the
information and an administrative structure to ensure that contact with
employers can be established in cases in which people are not
registered as having a scheme. We also need to be able to take action,
if that should become necessary. I am sorry that I cannot give much
more detail, but the hon. Gentleman will understand that we are still
in the business of trying to establish the scope of the work that TPR
will do.
Paul
Rowen:
I am grateful for the Minister’s comments.
It is important that the Bill goes through, and then we can work
towards setting up the system. He spoke about problems with
non-compliance, and clearly the regulator has a very different role now
from the one that it will have. We might be dealing with a whole
battery of different types of employers who have not previously had
contact with the pensions regulator. Has he considered what additional
powers the regulator might need to carry out that particular
function?
Mr.
O'Brien:
TPR will need new powers, some of which are
flagged up in the Bill. The detail of the administrative steps that TPR
will be able to take to deal with recalcitrant employers will be
developed, in regulations, in due course. We will have opportunities
later in our proceedings to consider some of the
issues.
The aim is to
ensure that TPR is satisfied that it will have sufficient powers to
carry out its duties and to deal with recalcitrant employers who simply
refuse to register or to provide a pension scheme. It should have
access to the appropriate penalties, or be able to bring into effect
procedures that will result in those penalties. Hopefully, employers
will see that there is a fairly straightforward system under which we
know who the employers are and who is registered, and we then identify
those who have failed to register, tell them that they need to do so,
and, if they do not, draw up sanctions to deal with that. The regime is
fairly straightforward but, as the hon. Gentleman says, we will need to
put in place the capacity for the administrative steps and penalties
that will be necessary for those who fail to
comply.
Question
put and agreed
to.
Clause 9,
as amended, ordered to stand part of the
Bill.
The
Chairman:
Before we move on, may bring some reassurance
and relief to the Government Whip? I have inquired about the size of
quorums. Although seven is appropriate for a full-sized Public Bill
Committee, the quorum can also be a third of the members of a
Committee. I have done my arithmetic again and, for this Committee, I
must be able to see six Members. I think that I have been able to
afford some consolation and relief to the Government
Whip.
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