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On the first point about record keeping, at the moment local authorities keep the registers. I have checked with the Electoral Commission, academic

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researchers and the society of electoral registration officers, and their best estimate is that 97 per cent to 98 per cent of those between 45 and 65 are on the electoral roll. When one goes canvassing—

Lord McKenzie of Luton: My Lords, I am sorry to interrupt. That statistic refers to people who did not move house. We need to know how many people moved house to be able to judge that statistic.

Baroness Hollis of Heigham: My Lords, my noble friend is absolutely right to qualify that. I made it clear in my opening statement. The best evidence that I have on the churning point is that, according to the society of electoral registration officers, around 2 per cent of people between 45 and 65 move house; we are talking about a 2 per cent churning, because this is the most stable group.

The ones who are not on the register are young people. They may be students, people in rented accommodation or lodgers. They are mobile. Other people not on it are those for whom the property is a second home. Occasionally they may be absentees, but you can enrol at any stage. I think that my noble friend unwittingly misled the House last time—you can enrol on the electoral register at any point in the year.

In my view, there are no technical problems to this amendment. The question seems straightforward. Are the Government willing to work with local authorities and registration officers to create—identity cards may well remove this need—a database that a future Government of any party or complexion could use to make this judgment if they wished? By saying no, the Government are closing down options for the future, which they, or someone else, may seriously regret.

I am not proposing to press this matter today, but I have to say that none of the arguments that my noble friend has advanced seems at all difficult to address, particularly over a timescale and in consultation with people who are doing this job now, on the ground. I delicately suggest that those people have more expertise in this matter than certainly I, and possibly he and some of his officials, have. Nevertheless, with the permission of the House, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Oakeshott of Seagrove Bay moved Amendment No. 5:

(a) the terms, benefits and affordability of public sector pensions,(b) the latest trends in private pension saving (and the impact of means-testing), and(c) the latest trends in life expectancy and average retirement ages.”

The noble Lord said: My Lords, the amendment is in my name and those of the noble Baroness, Lady

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Greengross, and the noble Lord, Lord Fowler. I shall speak also to Amendment No. 34, tabled by the Conservative Front Bench.

This is a consensual, cross-party amendment. I do not propose to go in detail through our discussions in Committee but I have done my best to take on board the points made very well by the noble Lords, Lord Fowler and Lord Howarth, who tabled amendments on similar but not identical lines to my own. The noble Lord, Lord Fowler, made a good point when he said that we did not need to have two commissions, one for the public sector and one for the rest. This commission deals with both public sector pensions and trends in private pension saving, life expectancy and the average retirement age.

The noble Lord, Lord Howarth, made a very good point when he said:

and that we need one to,

Although the noble Lord has not added his name to this amendment, I hope that he will support the proposal in debate and in the Division Lobby.

This amendment seeks not to prejudge the outcomes of the commission’s deliberations but to find a pensions consensus that is built to last. It is the unfinished business from the Turner commission—which has done so much to build the present consensus, so far as it goes, and to bring about the massive changes in our pension system that have done much in the short term. In our view, however, it is essential to have a long-term, independent and stable pensions commission. We are supported in that by the National Association of Pension Funds, which I thank for its support. Its idea is to create a permanent body to monitor the adequacy and sustainability of the UK pensions system. The association is, like us to some extent, talking of a board comprising a small number of expert appointees.

I suggest that the commission should be larger than the Turner commission, which had only three people. I envisage a commission of six or eight people. It would be a small but expert commission and certainly include one representative from each of the three main parties to cement consensus in the long term. The Government Actuary or someone of equal standing would be a member to provide specific input on longevity, a critical issue in pension funding. The commission would certainly include someone with substantial public sector experience, in addition to a pensions expert from a body such as the PPI. Those are the sorts of ingredients that I would suggest. Looking around the House, I see in their places the sorts of people who I would envisage as commission members. I should hope that people with that sort of expertise will be available.

A parallel with the Monetary Policy Committee of the Bank of England can be usefully drawn here. Of course you cannot take pensions policy entirely out of politics, any more than you can take economic policy out of politics; but just as the crucial decision to set

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interest rates is better done by experts, the analysis of trends in these key areas is best done by a commission with a substantial expert element. The Government say that they are in favour of consensus but they are not in favour of a consensus that they cannot control. It was noticeable that this was the one major recommendation of the Turner commission that the Government were not prepared to implement. Frankly, I thought that their reasons were pretty thin.

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We are asking for a body that reports every four years, as the Turner commission suggested—that is once in a typical Parliament—which we think is about the right time to review the situation, particularly when one is talking about long-term changes in the state pension age. That must be the right way to do it. Age got completely stuck, as it were. When I became my party’s pensions spokesman a few years ago, the idea of raising the state pension age was thought to be almost too hot to touch. The noble Lord, Lord Turner, has done a great service in opening that up and getting a resolution. We must have a means whereby those figures can be looked at regularly and in an authoritative and independent way.

The problems of the affordability of public sector pensions are well known. I look forward to the noble Lord, Lord Turnbull, discussing in more detail how that affects management in the public sector and other problems. I shall give one example of the imbalance between basic pay and the accrual of pension rights in the public sector. I have recently had the annual report of the Bank of England and I see for, I think, the third successive year—certainly for the past two years—that the increase in the transfer value of the Governor’s pension rights, at £379,000, is substantially more than his total pay and allowances for the year. We have a very unbalanced position. Funnily enough, I remember a few months ago having a discussion at dinner with one of the executive directors of the Bank of England, who said to me that he would, frankly, have a bit more salary now so that he could buy a house rather than the very generous pension pot in the indefinite future. We had a little chat to see if there was any way in which we could structure a deal but I am afraid that we could not. More generally, public sector workers would welcome a greater range of options, such as having more salary now as opposed to building up a very expensive pension scheme liability. That is the sort of thing that an independent commission could examine in a non-partisan, sensible, calm way.

I turn to the amendment of the noble Lord, Lord Skelmersdale. Essentially, it calls for more regular reports on public sector pension liabilities. We support the amendment; it is a useful move so far as it goes but I do not believe that it is a satisfactory substitute for the much more independent, sustainable and long-term proposals that we are making. Facts and reports are useful, but they will come from the Government. Frankly, you do not put Ministers and civil servants in charge of reporting what their own gold-plated pensions will cost the taxpayer; that should be done, as a point of principle, independently.

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I ask noble Lords to support Amendment No. 5. The House is in quite an independent mood today and I invite independent-minded Peers on the Conservative Benches in particular to support this cross-party amendment. I beg to move.

Lord Fowler: My Lords, I have added my name to the amendment and I am glad to support my Seaview neighbour. I shall speak briefly.

In my view, this is one of the more important amendments—if not the most important amendment—before the House. It follows amendments that the noble Lord, Lord Howarth, and I tabled in Committee. They were not quite the same but they were pretty indistinguishable.

I would put the case in this way. For years the clamour at Westminster has been for pre-legislative scrutiny. The argument has been that if only we had thoroughly examined the legislation before it was introduced, then all would be well and all the faults eliminated. There is nothing wrong with pre-legislative scrutiny but it is only half the story and, arguably, not the most important half. Post-legislative scrutiny is also required. Many of the most expensive mistakes in pensions over the past 30 or 40 years have happened not because the legislation was badly prepared or unclear; they happened because the legislation was not implemented properly. Frankly, it would have been very simple and very easy to prevent those errors.

I gave an example in Committee from my own experience, regarding legislation that we introduced in 1986. The clearest assurance was given—it could not have been clearer—that wide publicity would be given to a change affecting widows and their pensions. The assurance was given by the then Minister of State, John Major, and it was emphatic. Was the assurance followed? Emphatically, it was not. The fault was not in the legislation or in parliamentary scrutiny; in fact, Mr Major gave the commitment in response to opposition requests for such an assurance. The fault was in the fact that the assurance was not honoured. That was frankly admitted by the then Permanent Secretary in the pensions department when I went to see her. She told me quite plainly that the Civil Service had been in error and was to blame. That can happen. I make no particular criticism of the Civil Service; we all make errors. It is also true that Ministers take responsibility for anything that takes place. In this case, it should be recognised that the Ministers—self-evidently, I was not one of them—were not at fault. The point is that all of that, and the cost that went with it, could have been avoided by decent post-legislative scrutiny. A commission with the type of remit suggested in the amendment would prevent such errors and faults taking place.

I have a final point. I do not mind what argument is used against an independent commission examining what has taken place in pensions, but I would like to be preserved from the argument that was used in the last important debate that we had, on costs. This measure would save the Treasury money, not lose it. There is no comparison between the puny cost of an

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independent commission, where we are talking about very modest sums indeed, and the sums—the tens of millions and hundreds of millions of pounds—that could be lost. In many ways this is probably the most cost-effective measure that could be introduced at this stage.

This is a sensible step forward. It is not particularly radical. It is certainly in line with the Pensions Commission and with sensible pensions policy. It keeps us up to date—above all, it keeps the Government up to date—on what is happening in the pensions area. It keeps us up to date on the emerging cost of public sector pensions. I make this argument with no particular optimism that the Government will accept it, but if they fall down on this legislation and other legislation which they have passed, they will have no one to blame but themselves. Worst of all, they will lose taxpayers’ money in putting these things right. One must remember that if errors are made on pensions, the final bill can be very big indeed. Even at this stage, I urge the Minister to accept the amendment. It will not weaken his policy but strengthen it.

Baroness Greengross: My Lords, I am pleased to add my name to the amendment of the noble Lord, Lord Oakeshott, for two reasons in particular. I also declare two levels of interest, as president of the Pensions Policy Institute and as chief executive of the International Longevity Centre. With the first hat on, I should point out that some of the models produced by the PPI have shown, and can quickly demonstrate, that change happens fast. Exactly as the noble Lord, Lord Fowler, just said, it is important that we should have post-legislative scrutiny and are able to keep up to date with the trends.

Paragraph (c) of the amendment mentions:

Governments—and a commission, if one were set up—need to know those trends, because our national statistical office has got them wrong. The ILC always looks at the implications of longevity for everyone and also a little into the future to see how policies must adapt to cope with changing life expectancy and what that means for all of us. It would be wise for the Government to have a commission whose only job was to be up to date the whole time, monitoring the situation. As the noble Lord, Lord Fowler, said, it would not only save money but keep us all up to date on what is needed. I am happy to support the amendment.

Lord Howarth of Newport: My Lords, I support the amendment. I explained briefly at Second Reading why I favour the principle of an independent pensions commission, and more extensively in Committee when I moved an amendment which had very much the same effect as the amendment in the names of the noble Lords, Lord Oakeshott and Lord Fowler, and the noble Baroness, Lady Greengross.

As the noble Lord, Lord Fowler, said, so far from cost being an argument against the establishment of a commission of this kind—I suspect that that is part of the reasoning both of the government Front Bench

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and of the Conservative Front Bench—there is every probability that if we were to have such a commission, enormous amounts of money would be saved. In Committee, I asked the Minister if he would tell us what the cost of the Turner Commission had been and if he would contrast that with an estimate of the cumulative cost of the series of miscalculations, misjudgments, errors great and small which have beset public policy on pension over many years. I recited a litany of those errors. There can be no question that £1 million or £2 million to pay for the cost of a standing commission on pensions which would furnish the Government and all of us with authoritative and timely advice on emerging pensions issues would be a worthwhile investment indeed for the nation.

I quibble a little bit with the proposition from the noble Lord, Lord Oakeshott—which is not in the wording of the amendment but was in his speech—that the commission should contain party-political nominees. I am not entirely enchanted by that. I think that the important thing to do is to have people of recognised independence on an independent pensions commission and people of recognised authority—people of the calibre of the noble Lord, Lord Turner, Professor Hills and Ms Drake. No doubt the commission could indeed be more numerous than that commission was if a case were to be made for it.

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It is surprising that the Government should be resistant in that they are attracted by the principle of being advised by panels and commissions of independent experts in other contexts. Monetary policy has already been mentioned but I rather think that the Government are attracted to a body of independent experts to advise them on environmental issues and climate change issues. That seems entirely sensible. It strengthens the resources of expertise and advice and is a stimulus to us all in policy thinking.

So I very much hope that my noble friend will, after all, be willing to accept this amendment, if only to save this Government and future Governments from the pressure and temptation which is always there to fudge and prevaricate and to pretend that there is not a problem until it is a little bit too late and the problem has manifested itself and then there is a political crisis and it is so much more difficult to deal with it. I think that this would make for good government. It would save a very great deal of money. It would also save a great deal of human unhappiness which arises from the consequences of errors of judgment in pensions policy.

Baroness Turner of Camden: My Lords, I am sure that Amendment No. 5 is well intentioned. However, I query whether it is really necessary to have an Independent Pensions Commission when we already have under the new legislation what I imagine is the most powerful regulator that we have ever had.

My concern is that Amendment No. 5 is grouped with Amendment No. 34, which takes us back to the area we dealt with to some extent when we discussed this issue in Committee. I was very concerned at the

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proposal in Committee that there should be a commission to look into public sector pensions. One argument was that the recent negotiations undertaken with the unions had led to what was referred to as a two-tier workforce arrangement. I objected to that very strongly. I made the point that public sector pensions arose as a result of negotiations between the appropriate negotiating bodies, including the unions; that the unions regarded their pension entitlement as deferred pay; and that there would be considerable objections if it were thought that any attempt was being made to undermine the agreements that had been negotiated, and which continue to form the basis of pension provision in the public sector.

Nobody can say that our public sector employees, in London in particular, are highly paid. We have great difficulty in attracting people into the public sector in London because of the housing situation. Subsidised housing for firemen, teachers, nurses, and so on has been considered. We really have to look after our public sector workforce. If a view gets around that somehow or other the pension provision of public sector employees is not as secure as they once thought it was because a commission will be considering it, I do not think that that will be popular. I really hope that my noble friend will look at this with some care because I do not think that we want to upset the present arrangements. It would be very unwise to do so.

Therefore, although I can understand that there are reasonable arguments for Amendment No. 5, I can think of none at all for the amendment grouped with it, Amendment No. 34, which of course will automatically follow if by any chance we were to accept Amendment No. 5. I ask my noble friend to consider very carefully what I have said. This is a political as well as an economic issue, and it is a very important one. I therefore hope that he will listen carefully to my plea to keep in place the arrangements we have with the unions. That means that individuals in the public sector have a contractual entitlement to what has been negotiated for them. I hope that they are not given the impression that this can be in any way less secure than it is at present.

Lord Skelmersdale: My Lords, perhaps I may say to the noble Baroness, Lady Turner, that although we are debating these two amendments together, there is no linkage between them. Therefore, if the first amendment is passed, it does not automatically mean that the second one will also be passed.

Baroness Howe of Idlicote: My Lords, I am particularly grateful to hear that. I am certainly in favour of the idea of the Independent Pensions Commission but would be a little alarmed if it were to be linked with the other amendment. In looking at these very serious issues we need to keep an eye on exactly what is happening, particularly how trends are developing in private pensions, savings, life expectancy and the average retirement age.

I like the idea of an independent commission. I stress “independent”, as the last thing we want is yet more politicians; or even more important, yet more

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regulators. We need a flow of independent information which can be acted on. As we all know, anything to do with pensions is difficult. Changes tend to build up problems for whoever is in government, so inevitably they tend to be put off for as long as humanly possible. Therefore, an independent commission which came out regularly with some really important facts and figures would be a help. I support the amendment and I hope that the Minister can agree to it.

Lord MacGregor of Pulham Market: My Lords, I too wish to support Amendment No. 5. I suspect that Amendment No. 4 will be subsumed under Amendment No. 5, which covers much of the same area although on a different timescale. I am sorry that I was not able to be present at the previous debate in Committee to talk on this subject but I should like to say a few words now.

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