---

The noble Lord, Lord Skelmersdale, asked me about the provision of information. Amendment No. 10, to Clause 3, will permit qualifying workplace personal pensions to be used for automatic enrolment. Sorry—that does not deal with his point. He asked generally about what sort of information needed to be provided. Clause 9 talks about the information to be provided to jobholders, and clearly there are existing provisions relating to the requirements on pension providers to provide members of the schemes with routine information. The amendment—it mirrors earlier ones—recognises that information will have to flow to various people. It will have to flow from the employer to the employee in terms of the scheme with which the individual is involved. There will have to be some communication about the deductions process from earnings, and there will need to be communication from the employer and the scheme about who has been enrolled. It is on those sorts of issues that we are talking about an information flow; I do not think that there is anything more profound or sinister about it, but I might recap on my briefings and write to him if there is anything further with which I can reassure him on that point.

Lord Skelmersdale: I am grateful. For once I was not suggesting that there was anything sinister here, although I suggested a sinister intention earlier this afternoon. I was trying to get at the fact that the employer could be the originator of the information given to the employee in certain circumstances, but that in other circumstances there would be other instigators and the employer would be what I described as a postbox. I hope that that reaffirmation of what I said will help the Minister when he comes to produce one of his welcome letters.

Lord McKenzie of Luton: I confirm that the employer will be the instigator of some information—it will have to be, because it will be its decision into which scheme the individual will be auto-enrolled. The information on that choice will certainly have to be communicated.

On Question, amendment agreed to.

Lord McKenzie of Luton moved Amendments Nos. 16 to 18:

Clause 5, page 3, line 22, at end insert “, or

(b) gave notice under section 7.”

Clause 5, page 3, line 22, at end insert—

“( ) Subsection (2) is subject to section (Timing of automatic re-enrolment)(6).”

Clause 5, page 3, line 23, leave out subsection (5) and insert—

“(5A) For the purposes of arrangements under subsection (2) regulations may require information to be provided to any person by the employer or—

(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;

17 Jun 2008 : Column 970

(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.

(5B) For the purposes of arrangements made under subsection (2) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 7) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.”

On Question, amendments agreed to.

[Amendment No. 19 not moved.]

Lord McKenzie of Luton moved Amendment No. 20:

Clause 5, page 3, line 29, leave out from “regulations” to end of line 33

On Question, amendment agreed to.

Clause 5, as amended, agreed to.

Lord McKenzie of Luton moved Amendment No. 21:

After Clause 5, insert the following new Clause—

“Timing of automatic re-enrolment

(1) Regulations under section 5(6) must either—

(a) secure that for any jobholder there is no automatic re-enrolment date less than three years after the jobholder’s automatic enrolment date, and that there is not more than one automatic re-enrolment date in any period of three years, or(b) secure that for any employer there is not more than one automatic re-enrolment date in any period of three years.

(2) Subsection (1) does not restrict the provision that regulations may make about the timing of a jobholder’s automatic re-enrolment date (“the relevant date”) in the following cases.

(3) The first case is where the jobholder became an active member of a scheme in accordance with regulations under section 4 and—

(a) at any time before the end of the minimum period under that section, the jobholder ceases to be an active member of the scheme or the scheme ceases to be a scheme of the relevant kind for the purposes of that section,(b) that event is not the effect of any action or omission by the jobholder or the employer, and(c) the relevant date is the jobholder’s first automatic re-enrolment date after that time.

(4) The second case is where—

(a) at any time after the jobholder’s automatic enrolment date, the jobholder ceases to be an active member of a qualifying scheme or a qualifying scheme of which the jobholder is an active member ceases to be such a scheme,(b) that event is not the effect of any action or omission by the jobholder or the employer, and(c) the relevant date is the jobholder’s first automatic re-enrolment date after that time.

(5) The third case is where—

(a) there is a period beginning at any time after the jobholder’s automatic enrolment date during which the requirements of section 1(1)(a) or (c) are not met (so that the person is not a jobholder for that period), and(b) the relevant date is the jobholder’s first automatic re-enrolment date after that period.

(6) Where subsection (3) applies—

(a) section 5(2) has effect as if the reference to an automatic enrolment scheme were, in relation to the relevant date, a reference to a scheme (“the new scheme”) of the kind referred to in subsection (3)(a), and(b) section 4(2) to (4) apply in relation to the new scheme as they applied in relation to the scheme referred to in subsection (3).”

On Question, amendment agreed to.

17 Jun 2008 : Column 971

Clause 6 [Jobholder's right to opt in]:

Lord Skelmersdale moved Amendment No. 22:

Clause 6, page 4, line 5, at end insert—

“( ) The first regulations under subsection (4)(b) shall not be made unless a draft of the statutory instrument containing them has been laid before, and approved by a resolution of, each House of Parliament.”

The noble Lord said: This is one occasion on which I have managed to pre-empt the Government, by accident rather than design, because with the amendment are grouped government Amendments Nos. 137 to 139. Also in the group are our Amendments Nos. 36, 51 and 52. The Government have accepted many of the recommendations of the Deregulated Powers and Regulatory Reform Committee of your Lordships’ House. The intention of our Amendments Nos. 22, 36 and 52 has been fulfilled by the government amendments in the group. However, our Amendment No. 51 is not matched by a government amendment.

There is, once again, a certain vagueness about Clause 12(2). It seems that the Government cannot make up their mind. Your Lordships’ Delegated Powers and Regulatory Reform Committee recommended in paragraph 19 of its report that either prescribed features should be more closely defined to the Government intention of dealing with schemes that fail to revalue accrued savings or that the power should come under affirmative approval. The Government response was:

“In their report the Committee signalled concerns over the regulation-making power at 15(2)(c) citing that the power conferred was too wide ranging and risked an average salary scheme to be removed from the definition of ‘qualifying scheme’ on any ground”.

I emphasise “any ground”. They go on:

“The Committee recommended that the delegation at Clause 15(2)(c) should be more closely confined to the purpose which the delegated powers memorandum states that it is being conferred. We are currently exploring with stakeholders, whether the power allowing the Secretary of State to exclude average salary schemes with prescribed features is required. Following these discussions we will either remove this power or table an amendment to make this power affirmative rather than negative”.

I am extremely grateful to the Minister for inviting me to some of these stakeholder meetings, one or two of which I have been able to attend. The noble Baroness, Lady Hollis, and I went to one only last week but not, alas, on this subject. With whom is the department holding discussions and which option looks more likely? Does it expect to be ready by Report stage to bring back whatever amendment is considered appropriate? I beg to move.

6.30 pm

Lord Tunnicliffe: I am not prepared for such a change in position, so I will have to improvise. I rise to speak to government Amendments Nos. 137, 138 and 139. I understand that Amendments Nos. 22, 36 and 52 will not be pressed.

Baroness Hollis of Heigham: My list says only Amendments Nos. 137 and 139. It may be that the Marshalled List is changing by the half hour.

Lord Tunnicliffe: My notes cover Amendment No. 138. I believe it has simply been omitted from the Marshalled List. I will speak to Amendment No. 138 and see what happens. We have come straightforwardly to the Delegated

17 Jun 2008 : Column 972

Powers and Regulatory Reform Committee, which recommended that the powers covered by our amendments should be subject to affirmative procedure on first exercise. We accept its recommendations. Amendments Nos. 137, 138 and 139 will make the powers subject to affirmative procedures. These amendments also address the Delegated Powers and Regulatory Reform Committee’s recommendation on the powers of Clause 15 and Clause 85. It will be helpful if I explain briefly what each of these powers does.

The power in Clause 15(2)(c), which relates to average salary schemes, is there to safeguard members’ private pension savings. It is a precautionary reserve power that could be used if there are schemes that do not revalue appropriately the earnings on which benefits are calculated, meaning that benefits do not, therefore, maintain their value in retirement. Amendment No. 51 would remove the power to disqualify such average salary schemes. I emphasise that we believe the number of schemes operating in this way to be negligible. The power is a precautionary measure to prevent members saving in schemes where the value of their benefits may be eroded over time. It is our intention to consult our stakeholders before the power is exercised.

Turning to Clause 85, the majority of the workforce is already within the scope of the Bill. However, Clause 85 provides the Government with the flexibility to extend the scope of employer duty to individuals who do not fall within the “worker” definition. It will also enable the Government to bring a new group within its scope, should one be created that does not automatically fall within the core definitions in this Bill. We recognise that, as drafted, the powers of Clause 52(2)(c) and Clause 84 are wide-ranging and that it is appropriate that they be subject to parliamentary scrutiny and exercised by the affirmative procedure.

Finally, for the same reason, these amendments also make the new power in Clause 16(1)(c), which allows for additional criteria to be prescribed for automatic enrolment schemes, subject to the affirmative procedure. I reassure the Committee that the Government will share their plans for the process and notices to be regulated under Chapters 1 and 2 of the Bill. We aim to share these plans in the autumn before going on to publish draft regulations in spring 2009, which will then be followed by a technical consultation in the usual way.

I am pleased that the noble Lord, Lord Skelmersdale, will not be pressing Amendments Nos. 22, 36 and 52. However, I hope that the noble Lord is reassured by our intention of modifying the Bill to meet these recommendations. I reiterate that we will be addressing all the Delegated Powers and Regulatory Reform Committee’s recommendations, and amendments have been—or will be—tabled to that effect. I therefore urge the noble Lord to withdraw his amendment and beg to move government Amendments Nos. 137, 138 and 139. I am sorry; I will speak to them, and move them in their place.

Lord Skelmersdale: I was not going to comment on that House of Lords faux pas, but I point out that towards the end of my few words I asked the Minister who the stakeholders are in this case. In other words, who are the Government holding discussions with?

17 Jun 2008 : Column 973

Which option currently looks more likely? In other words, will the Government remove the clause from the Bill, or make the order affirmative? Whichever they decide, do they expect to be ready by Report stage? I understand that Report stage is currently planned for some time after the Summer Recess. I have not had confirmation, but that is the rumour. The Minister might be able to confirm that.

Lord Kirkwood of Kirkhope: Perhaps I may add a pedantic word here. I generally support what the noble Lord, Lord Skelmersdale, has just said. It is offensive to have in parliamentary procedures affirmative orders on first use. In my view, orders should either be affirmative or negative. Governments now, as a matter of course, hybridise statutory instruments and go for a halfway house of “on first use”. It confuses the picture. Can the Minister explain why they are restricted in this way and why they are not simply affirmative orders—with a capital “A”—from start to finish?

Baroness Hollis of Heigham: I disagree with that point of view as someone who has been in a similar position. Time and again, there will be concerns raised in the House about the use of a statutory instrument or order that the Ministerial Bench may feel is misplaced. Ministers might, nonetheless, wish to help the Opposition, so when that order first comes up there is a commitment to proper parliamentary review. After that, it is assumed that those concerns and fears have been addressed and we do not need to continue. Should the Opposition feel that issues remain, they can raise them through the negative procedure. We should not litter dinner hour business or Moses Room procedures with unnecessary affirmative orders about which there is no concern, around which there has been consensus and, where—after the original parliamentary debate—there has been at least one debate on the Floor of the House or in Committee. That is a sensible way of ensuring initial parliamentary scrutiny but then clearing the decks so that it does not become permanent graffiti on the shoulders of opposition spokesmen at ungodly hours in this Chamber.

Lord Skelmersdale: I strongly agree with the noble Baroness, Lady Hollis—she may think “for once”, but in fact I have agreed with her on numerous occasions. The noble Lord, Lord McKenzie, will remember that I requested in, I think, the CMEC legislation, although it might have been the Welfare Reform Bill, that we should have orders debated in the affirmative manner the first time around and thereafter slipping down to the negative resolution procedure precisely for the reasons given by the noble Baroness. I am afraid that for once the noble Lord, Lord Kirkwood, is not on to a winner.

Lord Tunnicliffe: The last thing I want to do is offend the Committee in any way. Taking the simple position, we are doing what the wise Delegated Powers and Regulatory Reform Committee recommended, and that seemed to be a good thing. We agree with the summary of my noble friend Lady Hollis that using the affirmative procedure the first time works well. I can confirm that we have consulted the actuarial profession and scheme representatives. We see the whole issue of

17 Jun 2008 : Column 974

average salary benefit schemes as an entirely precautionary power. In 2006 some 2 million members in average salary schemes were revalued with the prices index. There are no statistical data for those that revalue in line with earnings, but we believe that is because the numbers are insignificant. Indeed, there are no statistical data on such schemes because we do not believe that there are any being run in that way. We will lay regulations only if it emerges that workers are at risk of seeing their savings being kept at below the reform minima. Therefore we have decided to go for the affirmative option.

Lord Skelmersdale: I am still trying to discover when these changes, if necessary, will actually be laid; that is, whether at the Report stage or not.

Lord Tunnicliffe: I am terribly sorry, but as I understand it, the option is in front of us. Either we set criteria about average salary schemes to go into the Bill or we will have a wide-ranging reserve power to be exercised only through the affirmative procedure. Our view is that because they are so unlikely to be used, we would like to stick with the powers in the Bill, but on the condition that the affirmative procedure is used.

Lord Skelmersdale: But the affirmative procedure would entail a change to the Bill as, indeed, would removing the power. Whichever way we go, an amendment will be required. My question is: when is it to be tabled?

Lord Tunnicliffe: We are confused. I will send the noble Lord a letter.

Lord Skelmersdale: On that basis, I really have no option but to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McKenzie of Luton moved Amendment No. 23:

Clause 6, page 4, line 6, leave out subsection (5) and insert—

“(5A) For the purposes of arrangements under subsection (3) regulations may require information to be provided to any person by the employer or—

(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.

(5B) For the purposes of arrangements made under subsection (3) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 7) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.”

On Question, amendment agreed to.

Clause 6, as amended, agreed to.

6.45 pm

Clause 7 [Jobholder’s right to opt out]:

Lord McKenzie of Luton moved Amendment No. 24:

Clause 7, page 4, line 26, leave out subsections (2) to (6) and insert—

“(2) If the jobholder gives notice under this section—

(a) the jobholder is to be treated for all purposes as not having become a member of the scheme;

---