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The noble Lord, Lord Crisp, in particular, touched on the importance of health workers. We thank him for his work in raising the profile of the global shortage of health workers. We see the Health Links Funding Scheme as the main way in which we will make available help and support in health expertise.

The noble Lord, Lord Joffe, mentioned that the health and survivability of women and children are critical to the achievement of all the MDGs. MDGs 4 and 6 cannot be met without improving maternal services.

The noble Lord, Lord Alton, noted the high proportion of newborn deaths. Forty per cent of all deaths of children under five occur within the first month of life. This is due largely to the lack of basic maternal and newborn care. Improving that is crucial to tackling the MDGs and, in particular, improving the health of mothers. Improving maternal and child health requires strong health systems, which is why the Government’s updated strategy for tackling HIV and AIDS in the developing world includes a commitment to spend £6 billion on health systems and services by 2015. It is also why the Government have committed to supporting countries with health-worker shortages to provide at least 2.3 health workers, doctors, nurses and midwives per 1,000 of population. As the noble Lord, Lord Crisp, noted, health workers are the backbone of every health service and are essential to providing a decent quality of healthcare.

Better health systems are vital to achieving the MDGs, which is why in New York in September the Prime Minister and other world leaders launched a task force on innovative financing for health systems.

The task force will mobilise additional new resources to support stronger health systems, which are key to

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saving the lives of 3 million mothers and 7 million babies. It follows the success of the International Finance Facility for Immunisation, an innovative financing mechanism which was launched in November 2006 and has already raised more than $1 billion to immunise more than 100 million children against polio, help poor countries to target 26 million women with immunisations against maternal and neonatal tetanus, and provide 194 million children in 32 countries with a life-saving measles vaccine. But improving the health of women and children is not just about improving systems. As the noble Baroness, Lady Northover, highlighted, the MDGs that are the most off-track are those that are most reliant on progress towards achieving women’s care and rights. The realisation of rights for women and girls has a critical role to play in achieving all of the MDGs. This is why DfID has launched a Gender Equality Action Plan to ensure that gender is at the heart of the Government’s development work. This commitment to keep women’s rights at the heart of the Government’s work continues.

In summary, achieving even the most off-track MDGs is possible, but this will become a reality only if there is a strategic step-change in the way the alliance of international agencies, Governments, the private sector, faith groups and civil society approaches these issues. The next two years will be crucial. I assure noble Lords that Her Majesty’s Government are absolutely dedicated not only to playing their part but to advocating and supporting others to play their part in achieving these goals.

Baroness Chalker of Wallasey: My Lords, would the Minister turn his attention to the issue that I raised about the difficulties faced by the Global Fund in delivering the medicines for which it has pledged money. There is a problem with the UN system and I hope that he will undertake to have this investigated and perhaps write to noble Lords who have participated in this debate. It is absolutely crucial for children.

Lord Tunnicliffe: My Lords, I give that assurance and commit to write to the noble Baroness. We will review Hansard after this debate and cover in such a letter any other issues that we have not covered in my response.

Lord Patel of Bradford: My Lords, I beg to move that the House do now adjourn during pleasure.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.26 to 8.30 pm.]

Pensions Bill

Consideration of amendments on Report resumed on Clause 69.

Baroness Noakes moved Amendment No. 52:

52: Clause 69, page 37, line 42, leave out subsection (5)

The noble Baroness said: My Lords, Amendment No. 52 deletes Clause 69(5). In the group of amendments we were debating before the dinner break, we were

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addressing the specifics of the restrictions and limits which will be placed on contributions to personal accounts. This amendment is rather different. Under subsection (5) the Government have the power to repeal Clause 69 by order, and in so doing the Secretary of State would deprive the Government for all time of the ability to set contribution limits for personal accounts.

The Minister teased me in Committee because I normally take the stance that the Secretary of State should have as few powers as possible. I explained that we are concerned that the personal accounts scheme, through its financial muscle, will need to be kept focused on its core market, which is for those with no or inadequate pension savings. We do not want the personal accounts pension scheme to engage in mission creep, which it could easily do. Indeed, the attractions of trading up market, where pension products are already adequately provided by the market, might become irresistible to an organisation with millions of pounds earned in charges to spend on advertising and marketing.

We believe that a wise Government would always want to keep powers to keep the scope of the personal accounts scheme properly focused. The proper focus may well change over time and high limits might conceivably be set at some point in the distant future. However, the Government will not control the pension scheme, though they may have some controls over the trustee corporation, so they need to be able to influence key elements of its behaviour.

In Committee, the Minister at least said that he would think about the matter further, although I concede that he did not hold out much hope of a change of view. I have tabled the amendment again because he said in Committee that he would try to convince me of the reasonableness of the provision.

If the Minister is not able to accept the amendment, I hope that he will explain whether and to what extent the personal accounts scheme will be subject to competition law and could be restrained by the Office of Fair Trading or the Competition Commission if it abused its market position. Clearly, if effective competition regulation applied to the personal accounts scheme, some of the concerns would be ameliorated, but if the competition law aspect were not clear, or if there were a lack of jurisdiction, we would remain concerned. I am always open, as the Minister knows, to being convinced that something is reasonable. I beg to move.

Lord Oakeshott of Seagrove Bay: My Lords, I am not open to being convinced by the Minister that the amendment is reasonable, and I hope that he will not accept it.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My Lords, the noble Lord, Lord Oakeshott, makes my task a little easier. I am grateful for that. I am also grateful for the amendment, as it gives me an opportunity to explain fully again the Government’s position.

The amendment seeks to remove the power to repeal the contribution limit. The 2017 review will look at whether the contribution limit and transfers

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remain appropriate once the reforms have had a chance to bed in. However, as we have just debated, we should not pre-empt the outcome of that review. It is therefore important that the Secretary of State has the ability to amend the legislation if the review concluded that it was necessary—for example, if it found that the limit was hampering saving.

If we were to remove the Secretary of State’s ability to repeal Clause 69, the personal accounts scheme would then be required to operate a limit until a suitable opportunity to amend primary legislation arose. In that situation, we would need to find an alternative way of building in flexibility. That may, for example, mean that we would raise the limit substantially, but that would generate complexity around communications for the scheme trustees as they would have to continue to explain the provision and how breaches would be handled. Of course, if the review evidence indicates that the limits should remain, the Secretary of State is not required to use this power and the limits can remain or be adjusted as necessary.

I remind noble Lords that the Delegated Powers and Regulatory Reform Committee has scrutinised this power and decided that its use, under the circumstances that I have just described, is appropriate. I should also add that Parliament would be able to debate the exercise of the power, as it is subject to the affirmative procedure. I hope that the noble Baroness can accept my assurance that the Secretary of State would exercise this power only if the review conclusively found that it was appropriate. The noble Baroness asked me specifically about competition law and the market position. I am afraid that off the top of my head I cannot give an answer to that. I shall certainly follow up the point in writing. I understand the significance of the issue. I do not think that I shall receive helpful comment on that from my officials in the next few minutes so I promise to write. Notwithstanding that, I hope that I have said enough to encourage the noble Baroness not to press the amendment.

Baroness Noakes: My Lords, I thank the Minister for that response. I should have given him notice that I intended to ask him about competition law. However, I await his written response on that point. Even if the noble Lord, Lord Oakeshott, does not understand the nature of the concerns about whether a lever should ever be given up unless there are adequate alternative levers available, I hope that the Minister does. That is the burden of my proposition. I look forward to seeing what the Minister has to say. I hope that his response will arrive in time for me to consider the position I shall adopt at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale moved Amendment No. 53:

53: After Clause 72, insert the following new Clause—

“Review of the pension scheme

(1) The Secretary of State shall lay before both Houses of Parliament a report five years after the establishment of a scheme under section 66.

(2) The Secretary of State must consider in the report—

(a) whether the maximum amount of contributions specified is appropriate; and



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(b) whether any further transfers into or out of the scheme should be allowed.”

The noble Lord said: My Lords, the Government’s and, to be fair—fairness being an issue to which we referred at length earlier—PADA’s present intention is to start personal accounts in 2012 and to review their operation, especially in regard to transfers in and out, in 2017. However, I can find literally no one in the pensions industry who really believes that it is conceivably possible to start them as early as 2012. Even if it were, I can find nothing in the Bill to say that any review will take place in 2017, nor that any review will cover the two subjects in subsection (2) of the new clause that I am promoting in the amendment.

We discussed this matter in Committee, when the Minister pointed out the plethora of information in the pensions arena which comes out of the department, from surveys of industry and from employers and employees. He mentioned the annual survey of hours and earnings from the ONS, the biennial employers’ pension provision survey, the survey of employers from the DWP and the annual survey of occupational pension schemes. None of these covers what I am after.

Personal accounts will be the largest pension scheme to hit this country ever and it would be misleading to think that every jot and tittle of setting them up will be covered by either the Bill’s clauses or the regulations that flow from it. It would also be misleading to state that another pensions Bill will not be needed some time in the next Parliament. To do its job properly, Parliament needs to be informed of the surveys conducted and the decisions flowing from them before the introduction of such a Bill. It does not require a lot of information from scattered sources to achieve that.

In Committee, the Minister was unable to give a definitive answer about whether the existing reports and surveys to which I have just referred will include the matters mentioned in subsection (2) of the proposed new clause in my Amendment No. 53; that is,

I accept that this might also cover trivial commutation, on which the noble Baroness waxed fairly lyrical just before the dinner break. On that basis alone the amendment is worthy of consideration.

As regards when the report I am requesting should be made, the House will note that there are five years between the planned introduction of personal accounts and the Secretary of State’s intended consideration of these matters. Given that personal accounts may or may not start in 2012, it is only logical that Parliament is informed of the Government’s decisions and the rationale for those decisions five years later. It is intentional that I have not put the dates 2012 and 2017 in the amendment. I beg to move.

Baroness Hollis of Heigham: My Lords, I am very grateful to the noble Lord, Lord Skelmersdale, because he has given me an opportunity, as it may have occurred to other noble Lords to do, to add things to the shopping list of items under review. This is a splendid opportunity, although I do not doubt that this really should have been moved as an amendment to an amendment.



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I want to raise an issue that I raised in Committee. I have done further work on it and have had further discussions. In most DC schemes, employers are contributing around 6 per cent to 7 per cent on the whole range of earnings from zero to the higher rate of tax or some agreed ceiling. In personal accounts, the employer is contributing half of that, only 3 per cent; I am not arguing with that and I understand where we are coming from on that. It is only contributing 3 per cent if someone is on half median earnings of £11,000—my putative hairdresser—because the first £5,000 or so is exempt because it is below the LEL. Effectively, the employer is contributing, on average, only 1.5 per cent at half median earnings for a woman compared to the 6 per cent or 7 per cent it is on average contributing if that person were working, for example, for a major company where they were possibly doing the same job.

I raised that issue in Committee, and there was some sympathy for what I was trying to achieve. The people who most need these pensions—low paid women—are going to have quite small pots with low levels of contribution, which means that they will remain entangled for much longer than we would wish in judgments about the benefits system, whether it pays to save and the like. The easiest way to spring women—particularly women who enter the scheme before the age of 50 or so—out of the income-related benefit trap is for their pot to be sufficiently large that it springs them out of the pension credit savings element, so that they enjoy a 100 per cent return on their annuity or their pension, rather than, say, 60 per cent, which would otherwise be the case.

The question is whether this is feasible at this time. I was challenged by my noble friend and by the previous Minister for Pensions, Mike O’Brien—to whom I pay tribute; I am sure that Rosie Winterton will do a splendid job but Mike will be much missed—to see what the view of industry was on this. I talked to the Federation of Small Businesses and the EEF and, through e-mail, with the CBI, which was less interested as this is essentially a small employers’ issue. They were concerned that small businesses would not be ready to go for an arrangement in which if someone who is already in the pension scheme chose to contribute for the first element below LEL the employer must match it. That is similar to the arrangement that has been devised for young people between 16 and 22; if they choose to contribute, the employer must match it. I was seeking to do something similar.

For many women, that may not be necessary, because they may have a husband or partner whose financial arrangements are such that they would not wish to make that contribution. But—particularly for single women, or those who possibly are cohabiting but who have independent financial arrangements, who are on very modest earnings—the only way, if they enter a personal account fairly late in life, to spring them free of benefit is to increase the size of the pot. The best way of doing that is, if they choose, for them to contribute below the first £5,000, below the LEL, if they are already in the scheme, and the employer then must match it.



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The Federation of Small Businesses and the EEF were entirely sympathetic with what I was seeking to achieve. They were obviously worried about putting too much burden on business in the early days of establishing a scheme. I hope that I am not attributing views to them that they would not accept, but they agreed that it would be perfectly acceptable to ask that this be considered as part of the review five years after the scheme was established to see whether, at that point, such a move would be acceptable to business and industry. In the meanwhile, they would encourage small employers to go down that route on a voluntary basis.

I thought that this was a perfectly reasonable way forward, but I would like my noble friend to acknowledge that when we have that review in, we hope, 2017, such a proposal will indeed be one of the items on the agenda, to give lower paid people, particularly women, the best possible chance of springing themselves free of IRB and having an option to build a decent enough pot with consent. I thank the noble Lord, Lord Skelmersdale, for giving me this opportunity and I hope that a proposal that the review should include consideration of this issue, in consultation with the industry—by which time the scheme will have bedded down and so on—will be a way forward to help women escape the benefits trap.

8.45 pm

Lord Oakeshott of Seagrove Bay: My Lords, I congratulate the noble Baroness on her ingenuity. No one is better than her at spotting a Christmas tree to start hanging things on. As an opposition spokesman who may well be an opposition spokesman in a few years, although Governments may change, I am always sympathetic to or in favour of a report every five years or so. A maximum amount of contributions is perfectly understandable. Perhaps the noble Lord, Lord Skelmersdale, would clarify for me the implication of,

Is the implication of that question that transfers should be stopped completely, or is it an open question? Subject to that, the amendment seems to be sensible.

Lord McKenzie of Luton: My Lords, as noble Lords will be aware, we have committed to having a review in 2017 of two of the measures that will focus the personal accounts scheme on its target market. We have stated on a number of occasions that the review will focus on the annual contribution limit and the transfer ban and I willingly restate our commitment to such a review.

The noble Lord, Lord Oakeshott, asked about the transfer ban. The purpose of that component of the review is to address whether the proposed restriction on transfers in and out should be lifted, ameliorated in any way or retained.

This review will consider these policies and gauge whether they have been effective in focusing the scheme on its target market, without detriment either to the scheme and/or its members. The amendment tabled by the noble Lord, Lord Skelmersdale, would require the Secretary of State to lay a report on these two measures before Parliament five years after the scheme is established.

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We, of course, agree with the spirit of the amendment, as we have committed to undertake such a review. However, we would like to consider the wording in more detail.

For example, the amendment may commit the Secretary of State to a review before 2017, as it links the review to the establishment of the scheme rather than to when it starts to operate. In practice, the scheme will have to be formally established before it becomes fully operational. Various tasks will need to be undertaken by the trustee before the scheme can operate as a scheme for accepting pension contributions and investing them. As I have said, we have sympathy with the aim of the amendment and I am happy to commit to returning to it—we will have a busy Third Reading—once we have had an opportunity to ensure that the amendment fully meets the intent. I hope that that will satisfy the noble Lord.

My noble friend Lady Hollis presses a further issue. She asks for the review to deal with the ability of people who have qualifying earnings to be auto-enrolled into a scheme or voluntarily pay contributions from “pound zero”. That will bring in an employer contribution. She outlined her discussions with the EEF and others on this matter. We have always envisaged that the 2017 review would specifically deal with the features of the scheme that are intended to protect the market, the contributions limit and transfers. It will be an independent review that is carried out separately from the Government’s ongoing assessment of the reforms. Nevertheless, as we are taking this amendment away anyway, we will reflect on what my noble friend said.

Baroness Hollis of Heigham: My Lords, for the avoidance of doubt, I want to make it clear, because I would not wish to embarrass the EEF or the Federation of Small Businesses, that they would be happy to see the review. That was not a commitment to its outcome.

Lord McKenzie of Luton: My Lords, I understand that and am grateful for my noble friend’s input. I cannot give a commitment that what we come back with will include that provision but I am sure that in any event there will be other, ongoing ways to assess these issues. Fundamentally, we agree with the spirit of the amendment but, for the reasons that I have explained, the wording does not particularly fit the Bill. However, we shall see whether we can achieve what we both want.

Lord Skelmersdale: My Lords, in a previous existence, a noble friend of mine used the expression “gobsmacked”. That probably describes my attitude at this moment. I am of course delighted with the Minister’s response to the amendment.


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