169. Effective scrutiny by this Committee of the
major reform of State Pensions set out in the draft Pensions Bill
has been hampered; first by the extremely tight timetable the
Government imposed upon us and then by the Government's last-minute
decision to change the implementation date, from April 2017 to
April 2016. This was announced after we had concluded the evidence-taking
for the inquiry and only a week before the Government had asked
us to produce our findings. It is not acceptable for governments
to adopt such a cavalier attitude to the scrutiny role of select
committees. However, our recommendations remain valid and we believe
they will assist effective parliamentary scrutiny of the final
legislative proposals when the Bill is introduced in May 2013.
170. We welcome the improvements in retirement income
that the Single-tier Pension will bring. It will mean more State
Pension for many people, particularly low-earners, in the short
to medium term. It will also be a much simpler system for people
to understand and will give them greater certainty about the value
of saving into a private pension scheme. In this way it will complement
automatic enrolment into workplace pensions in boosting the amount
that most people will have to live on in retirement.
171. It is clear to us that the key to the success
of this reform is the way in which it is communicated to the public.
There are already a number of misconceptions about what the STP
will mean for individuals, including who stands to gain, who might
lose, and how individual entitlement will be calculated. People
closest to retirement understandably have the most immediate concerns.
172. We appreciate that it is not possible for the
Government to spend money on a communications strategy for a policy
that has not yet been approved by Parliament. However, we believe
that it is vital that DWP is in a position to indicate what its
overall communications approach will be, how the internet will
be used, and what individualised information it plans to make
available, by the time the Bill is before Parliament. This is
particularly important now that the implementation date has been
brought forward by a year.
173. The evidence we took from the pensions industry
and employers initially satisfied us that DWP had been effective
in liaising with these stakeholders on the reform proposals and
that they were broadly satisfied with the proposed arrangements
for ending contracting-out. The Government's decision to bring
forward the implementation date at such a late stage means that
it will need to engage urgently with representatives of employers
and pension schemes to ensure that their concerns about the accelerated
timetable for reform are taken fully into account in the final
legislation and draft Regulations.
174. We have a number of concerns about the potential
impact of some aspects of the proposals and the transition process
on particular groups of individuals. The change in the implementation
date has created further uncertainty about which groups will be
affected by the changes and in what ways. It will only be possible
for Parliament to make a proper assessment of the effects of the
proposals if the Government makes accurate and up to date information
available. Most importantly, DWP needs to publish a revised Impact
Assessment, which takes full account of the implications of the
earlier implementation date, when the Bill is introduced. We have
also identified some specific areas where DWP needs to carry out
further analysis and costings, to enable Parliament to judge whether
remedial action or modification of the proposals is required.