Pensions Bill

Public Bill Committee, 21 February 2008.

Nicholas Winterton (Conservative, Macclesfield)

I welcome members of the Committee to what I sense might be our penultimate sitting. I hope that they will note that new clause 16 has been withdrawn. I call Mr. Nigel Waterson.

New Clause 5

Nigel Waterson (Conservative, Eastbourne)

I beg to move, That the clause be read a Second time.

Nicholas Winterton (Conservative, Macclesfield)

With this it will be convenient to discuss new schedule 1—‘Provision for conditional indexed arrangements etc —

Nigel Waterson (Conservative, Eastbourne)

Thank you, Sir Nicholas. Whenever you summon someone to speak, I always expect a roll of drums as well. I welcome you to the Chair for what you rightly sense might well be our last day in Committee, after which all the guns will fall silent—at least for a short time. We are now skiing off piste and exploring those things that should have been in the Bill, and our proceedings are all the more interesting for that.

I take no credit for the draftsmanship involved in new clause 5 and new schedule 1, which is the work of the Association of Consulting Actuaries, particularly Mr. Ian Farr and his colleagues, and the Association of Pension Lawyers. I wish to make a small point on the drafting to spike the Minister’s guns if, as I suspect, he raises technical issues in that respect. If the principle of our proposals is accepted, it is always up to him to take them away and perfect them. That is not up to us. Opposition Members are not in the business of winning draftsmanship contests—we do not have the facilities. However, if the general principle of our proposal is accepted, as it should and must be, we can make progress.

Why have we tabled the new clause and the new schedule? We agree with the actuaries, who obviously have their fingers on the pulse of remaining defined benefit schemes, that there has not only been a massive shift away from DB schemes in this country, but that there will be a further acceleration of that process for two reasons. The Minister is fond of saying—and accurately so—that the move away from DB schemes started as a gentle downward course in the late 1960s. However, what we have seen, particularly since 1997, is a massive acceleration in that process. One thing on which we can all agree is that, in the world of pensions, if people are in a DB scheme, they are receiving the Rolls-Royce treatment and will end up with a relatively comfortable retirement, not least because, on average, contributions to defined contribution schemes are about half those to DB schemes.

It should be a policy aim of whoever is in government to maintain and protect DB schemes. That was the stated aim of the Pensions Act 2004, but that seemed to have the opposite effect by piling more cost and bureaucracy on to those who still run DB schemes. I have mentioned two risks, and we have discussed one exhaustively in Committee: the risk to existing provision of bringing in personal accounts. We have tried all ways in which to safeguard existing provision because, on the whole, that is significantly more generous in respect of the employer contribution than the 3 per cent. envisaged in personal accounts. The year 2012—if it be that year, although I do not want to re-open that one—will be the moment when employers will focus their minds on whether to stay in the DB game.

We have also touched on the consultation document produced by the Pensions Regulator, which is a more recent development that has taken place in the past few days. I made a brave attempt to read it last night, but one has to be a certain sort of person to catch all its nuances. It is very much actuary speak. It talks principally about the assumptions of those who run schemes—the trustees, essentially—about their members’ longevity. It contains much about what is rather depressingly called the “continuous mortality investigation”, which I think—but I am open to correction—is a process run by the actuarial profession that constantly reviews the levels of longevity in the country. It is, of course, good news that we are all living longer and, hopefully, healthier lives. I would never agree with those who go on about the demographic time bomb as though it were some horrible development not to be welcomed. Of course that is to be welcomed, but it has massive implications for pension funds.

There are all sorts of fascinating tables in the document, which you might wish to browse at your leisure Sir Nicholas, but although I searched high and low, it does not seem to come up with a figure as the new benchmark for male life expectancy, whether that be 87, 87-point-something or 89 years. However, some people estimate that if that sort of level were applied across the board to all pension funds, it could add an extra £75 billion or so in liabilities to pensioners. If that is the figure, that is the figure. If it is the necessary consequence of those life expectancy figures being accepted, there is no point arguing.

I think that it is fair to say that at almost every juncture in recent decades when the Government Actuary, or actuaries generally, have focused on projecting longevity, they have almost always understated it. That process might, of course, change with things like obesity and diabetes coming to the fore, but that is a matter for the future. That is another major risk in terms of the attitude of sponsoring employers to stay in DB schemes when they start to do their sums based on what is, of course, a consultation document. However, it is clear from some of the press briefing of the past few days that that is where the regulator wants to end up in terms of across the board longevity projections.

Before I get into the detail of the new clause and new schedule, I want to talk about the general issue of simplification or deregulation, which the Government, to their credit, have partly embraced as a necessary aspect of promoting and retaining a large number of DB schemes. There are measures in the Bill that we enthusiastically support that are on the same agenda, following the deregulation working group’s report. More can be done, and one of the main things is conditional indexation. At the end of the day, the Government can have no reasonable objection to the principle behind it. It happens in other countries—I can explain in detail what happens in Holland—and seems to be a useful tool for maintaining DB scheme membership at a relatively high level.

What harm can conditional indexation do? If not a single sponsoring company embraces the idea, and if, instead of moving straight from DB to DC—shifting all the risk from the employer to the employee, which we do not want to encourage—there is a third way, if I can use that expression, of conditional indexation, why not use it? Pensioners will be better off. What do the Government have to fear? The choice is between having a Rolls-Royce DB scheme and perhaps a Volvo or a Jaguar one. If people stick their heads in the sand—I am not suggesting that the Minister will do that—they could end up with no such pension scheme at all and fall back on to the personal accounts scheme. That scheme, although it has merits, does not have many for those who have no personal pension savings, but can be in a scheme where the employer contribution might be 10, 12 or 14 per cent.

So, what harm can it do? I make this offer to the Minister: if not a single sponsoring company takes advantage of this possibility, I will buy him a slap-up dinner in the restaurant of his choice. I cannot see any downside to these proposals—[Interruption.] I note that the Minister is pondering my offer.

The essence of new clause 5 is to end the ban on employers being able to offer new conditionally indexed pension schemes. It seems to me, the ACA and others that in around 2012, many employers will feel that they have no credible alternative but to move to DC pension provision and, if their existing scheme is still open to new members, or even existing members, to close it altogether and switch to DC, or simply move to personal accounts.

The actuaries have carried out work on the decline in membership of DB schemes. They say:

“Since 1995, the number of employee members of open, private sector defined benefit schemes has declined from 5 million to just 900,000 now.”

That is a massive decline. They also refer to the latest National Association of Pension Funds survey, which was published at the end of 2007, that said that only 40 per cent. of employers with open defined benefit schemes were prepared to say they expected no changes in the next five years. Fifteen per cent. are already expected to switch to pure DC, and 22 per cent. are expected to modify their scheme while retaining some DB provision. The ACA’s 2007 pensions trend survey found that 68 per cent. of employers expected further levelling down of provision in the period ahead and that 76 per cent. thought that more “good” schemes would close.

It is a bit like the issue of compulsory annuitisation. Nobody else around the world seems to do this. The mandatory indexation of both deferred pensions and pensions in payment in defined benefit schemes is unique to the United Kingdom. No other legislature in the world has placed such an onerous obligation on private sector firms to take on such an open-ended commitment on costs and liabilities. While I cannot claim to have made an exhaustive survey of European practices, I see the country that comes nearest is the Republic of Ireland, which requires indexation of deferred pensions only, and Germany, which requires it for pensions in payment only.

It is also clear that since the CBI gave oral evidence to the Committee, it has reviewed its position and now supports the new clause and new schedule. It set that out in its e-mail to the Committee of 6 February. That endorses the backing already given to the measures by the NAPF, the Society of Pension Consultants, and the Association of British Insurers. All the big players in the pensions field support this proposition, which makes it more difficult for Ministers to resist it, although I am sure that they will have a shot at that.

We, as legislators, will be held responsible when a process speeds up again whereby 100 per cent. of all risks fall on not employers, but ordinary employees. What is the point of conditional indexation? New conditionally indexed schemes offer to many mid-sized and larger employers that are prepared to share risks with their employees a pension arrangement that will not only attract and retain employees, but cap employers’ future costs. I do not think the ACA suggests that that would be particularly appropriate for smaller employers. The sobering thing that many major employers talk about is what is stretching into the distance: this ever-increasing escalator of liabilities based on year-on-year indexation. The ACA gave both written and oral evidence to the Committee. Of course, the Association of Pension Lawyers has looked at the legal issues in great detail, so I will not go too deeply into that. I am sure that it has made, or will make available, whatever thoughts it has on the technical side of things to officials.

It also seems that conditional indexation schemes would offer employees a far less volatile pension benefit than pure DC. Pensions would perhaps be based on career average earnings linked to service, save on occasions when scheme funding falls into deficit, with the condition that pension benefits will be indexed in line with a scheme-specific index—typically, inflation up to a 2.5 per cent. a year cap. Restoring indexation would be the first priority when a scheme returns to service. I will speak in a moment about the experience of Holland regarding the extent to which employers actually make use of the availability of conditional indexation.

Conditional indexation would not apply to the benefits offered by existing types of DB schemes. For the sake of simplicity, these amendments would apply only to new conditionally indexed arrangements that were set up after the Bill had become law. The provisions in no way interfere with existing types of risk-sharing arrangements or, indeed, with types that might be identified in the future. The Minister’s approach might be to say that we have to look at this in the round, that there are various sorts of risk-sharing and that we should look at all of them together and have a review—in tune with the current Prime Minister’s attitude to issues—but I do not think a review will do anything except put off the evil day. Why not do this, and then, if other ideas seem good, put them in as well?

I suspect that the Minister will argue that more time is needed to study the issue, but it has not suddenly popped up. This proposal has been floating around for a long time, and the ACA and the APL have made themselves available for detailed discussions with Ministers and officials. It is certainly an issue that the industry has been talking about for quite a long time. The ACA’s pensions trend survey over the last two years, to which I referred, has found that more than 70 per cent. of employers support the promotion of new risk-sharing schemes. I gather that next month a new survey conducted by HSBC and the Pensions Management Institute is to be published, and this survey—I have had a sneak preview—will show that more than 60 per cent. of employers favour arrangements whereby they can carry some or all of investment longevity and pensions inflation risk. I think we need to listen to that kind of evidence when it comes up.

I mentioned the ACA’s evidence to the Committee. Mr. Farr said openly:

“Conditional indexation—what we have proposed—is not a panacea. We and all the national pensions bodies that support this believe that it could stop the dramatic shift from defined benefit to defined contribution schemes that we have seen over the past 10 to 12 years.”

He describes conditional indexation as

“a genuine middle way between defined benefit and defined contribution; it has been well tried and tested in the Netherlands; it requires only small changes to the law; and it could be implemented quickly.”——[Official Report, Pensions Public Bill Committee, 17 January 2008; c. 82, Q106.]

I agree with all of that, and the NAPF supports this. In its memorandum, it said:

“The NAPF believe the Government should have considered more closely the option to introduce conditional indexation...The NAPF believes the Government should go further so that, for future accruals only, conditional indexation is granted depending on the current funding position of the scheme.”

It was made clear in November that the members of the occupational pension schemes joint working group, which involves the ABI, the ACA, the APL, the IMA, the NAPF and the Society of Pension Consultants, all took the view, talking specifically about conditional indexation, that risk-sharing

“would be a welcome step in the right direction to extending possible designs for risk sharing schemes.”

The CBI has now changed its position. In its most recent briefing, Neil Carberry, its head of pensions and employment policy, said:

“At our oral evidence session, the CBI indicated that while our members were in no way against the proposal for conditional indexation set out in new clause 5, they were more concerned by other issues...These issues should be a key part of the reform programme, and conditional indexation is certainly not a panacea. However, the introduction of such schemes will enable a minority of firms to choose to retain defined benefit style pensions where they might not otherwise have done so. This would be a valuable development. Following further consultation, therefore, CBI members feel that the inclusion of new clause 5 in this Bill would be beneficial as a way of presenting firms with another option for offering a high quality pension scheme.”

Finally, I quote the latest briefing from the TUC:

“We regard a government-led review of risk-sharing approaches to be an urgent priority.”

It also says that it believes

“that opportunities should be explored for occupational pension arrangements which genuinely share the risk between employer and members, where the only alternative is closure of DB.”

I find that very encouraging.

Without showing my slides, as it were, I will take the Committee through my recent trip to Holland.

Nicholas Winterton (Conservative, Macclesfield)

Fascinating.

Nigel Waterson (Conservative, Eastbourne)

Good, I thought so. I will try to be brief—it was a brief trip. It seemed to me that if the Government were not taking much interest in what was happening in Holland, perhaps the official Opposition should. I have described Holland as, in pensions terms, not just a different country, but a different planet. The official figure is that 95 per cent. of all employees there belong to DB schemes, which is absolutely phenomenal.

Let me take a chunk out of the Minister’s speech for him: there are differences between the two countries, although there are many significant similarities. Holland has big sectoral schemes covering whole sectors of the economy, and there are a lot of legislative and other pressures for existing smaller schemes to keep merging and getting bigger, so it has enormous economies of scale. It is very much in the European social model, regarding the involvement of the trade unions as part of how those large pension schemes are run. They have different funding rules—they do not have the privilege of having a pension protection fund, for example—and they have a different approach to funding. So, there are differences, and I am sure that the Minister will come up with others with his own researchers.

First, let me put on record my thanks to Watson Wyatt. Its Dutch office was extremely helpful in putting the trip together and giving me a lot of the background. According to Watson Wyatt, only 5 per cent. of all pension liabilities in Holland are in DC, rather than DB, and I have already said that 95 per cent. of people are in DB schemes. About 10 years ago, things began to change. Like every other developed economy, Holland began to recognise the intense and growing burden that was being placed on pension schemes by various factors. It became the consensus that indexation must be conditional. Dutch law makes no requirements of any indexation in pension schemes. Incidentally, there is no auto-enrolment as such, but the vast majority of people join in any event.

I had a useful meeting with several bodies, including sectoral funds, the Ministry of Social Affairs and Employment, and so on. I went to see the employers’ organisation, which explained that there was a tradition of these matters being dealt with as a social partnership between unions and employers. Again, it emphasised the lack of movement towards DC. The Dutch association of industry-wide pension funds—I will not try to pronounce its name in Dutch—was in many ways the most interesting body. About 75 per cent. of all workers in Holland are in one of the industry-wide massive pension funds, which they describe as a matter of their culture. What I thought was really interesting, which may allay some of the natural concerns of trade unions in this country and Labour Committee members, is the extent to which conditional indexation is taken advantage of.

The Dutch association of industry-wide pension funds produced some interesting figures that it had only recently collated. It asked all its members about indexation in the years 2002 to 2006 when, as in every other part of the world, pension funds were under a lot of pressure. It discovered that the average pension paid by one of its members was indexed by 10.7 per cent. between those years, while price inflation was 10.9 per cent. The indexation almost exactly mirrored inflation rate. The association says:

“Some pension funds gave extra indexation in the years 2005 and 2006 to catch up the shortcoming of indexation in the years 2002-2004. In 2007 and 2008 more and more pension funds start giving extra indexations.”

That is relevant and interesting because in Holland it seems that the mere existence of conditional indexation is enough for employers to continue in the DB system. It is almost like a “Break glass in emergency” notice: it is there on the wall. If employers want to—if things are really tough—they can stop indexing their pensions. However, many have simply carried on indexing at the rate of inflation and others have, perhaps, indexed at 1 per cent. a year or something. In just about every other case, in any major scheme where employers have cut down the indexation, they have made it up retrospectively. The fears of some people, particularly those in this country’s trade union movement, that members would miss out in the long run might be misplaced.

I apologise for going into such detail, but this is an important issue. If the Minister and the Government will not accept our proposals, we will certainly pencil them in for a pensions Bill in 2009 or 2010.

On Monday, the Financial Times published an interesting article by Pauline Skypala, the editor of “FTfm”, in which she tackles this issue. That shows how salient it has now become. She wrote:

“Only 31 per cent. of UK private sector DB schemes remain open to new entrants”

and mentioned developments in accounting standards, life expectancy assumptions and all the extra pressures on the continued survival of the DB schemes. She continued:

“The UK's unusual strictness on DB pension benefit indexation is underlined by a new book from the Organisation for Economic Co-operation and Development (Protecting Pensions: policy analysis and examples from OECD countries). This notes that a requirement to index benefits is rare in OECD countries...The OECD is worried about the gradual disappearance of DB schemes in the US and UK in particular”.

She cited Denmark, Iceland and the Netherlands

“as examples of countries with risk-sharing schemes that have proved resilient in recent adverse market conditions”.

She also mentioned the proposals and the ACA’s lobbying on the subject, and concluded by saying:

“The ACA is not asking for indexation on existing schemes to be axed, but only for new schemes to take a different approach. It deserves immediate consideration.”

That is what brings us here today. I want to stress that the proposal that I am talking about is for new schemes so that at the moment when employers are thinking of moving from DB to DC, another option will be available. They might choose not to take it, for various reasons, but they should have the option.

John Greenway (Conservative, Ryedale)

I do not want to detain the Committee unduly. I congratulate my hon. Friend on his lucid and compelling summary of the case for conditional indexation. The Minister will know that I spoke strongly in favour of that on Second Reading. I will not repeat anything that my hon. Friend said—it is all on the record—because I simply want to support strongly what he said.

I am slightly concerned for my hon. Friend’s wallet because the argument is so compelling that even if this Minister does not feel obliged to accept the proposal today, a Government Minister in another place might feel compelled to do so. My hon. Friend may well find that his slap-up dinner offer is taken up, despite the fact that the measure may be implemented in another place.

To take this matter seriously, I want to make two extremely serious points in support of my hon. Friend. First, we must get away from the problem that we face at the moment: with defined benefit schemes, all the risk lies with the employer, whereas with defined contribution schemes, it lies with the employee. We must find some middle ground and this is undoubtedly one way in which we can achieve that. The issue is urgent. The Government can rightly claim that there has been some stemming of the haemorrhage of defined benefit schemes. Despite that, very few employees in the private sector are being rolled into defined benefit pension schemes, even in firms where such a scheme exists for other employees. My hon. Friend’s point that this measure is for new employees and does not affect existing entitlements is a compelling argument for why we need to do something.

My second point is that we should listen to the actuaries. This week we are concentrating on what has gone wrong at Northern Rock and what should be done about it. I am in no doubt that if the board of Northern Rock had listened more carefully to the actuaries, and had stress tested the business plan to the point of what would happen if all the available credit in the banking sector dried up, that business plan would have been different. I am convinced that the actuaries will privately be saying, “We told you so, but nobody would listen,” about the debacle at Northern Rock.

In this instance, the actuaries are right. They have acted by bringing forward the proposal—through my hon. Friend’s new clause, to which I have put my name—and asked the Committee to debate the matter today. I suspect that in further proceedings on the Bill, we will see that they might be slightly ahead of opinion elsewhere.

The most encouraging thing that my hon. Friend has said has been about the reaction of organisations that, even during the public evidence session in the Boothroyd Room, were perhaps a little lukewarm, or even cool, on the proposal, but are now beginning to see the sense of the argument. That is all to the good, and it adds to the importance of us receiving a more positive response from the Minister today. Again, I congratulate my hon. Friend—if he had not tabled the new clause, I would have done so. The argument stands on record as compelling. We must do something about this issue.

Paul Rowen (Liberal Democrat, Rochdale)

May I echo what the hon. Member for Ryedale said about the hon. Member for Eastbourne’s proposal? The exposition of the arguments made by the hon. Member for Eastbourne for conditional indexation was very compelling.

We started our consideration of the Bill with evidence sessions and, as the hon. Member for Ryedale said, it is clear that the idea of such sessions and of having a dialogue with stakeholders has developed. In this case, it has proved its worth in that organisations that were initially lukewarm about conditional indexation have now accepted that it has a role to play.

We are all here for one purpose and one purpose only: to ensure that people’s pension provision is improved and developed. We have spent a lot of the time talking about personal accounts and expressed some concerns about what might happen if employers decide to switch from their own contributory pension schemes to personal accounts. We know that there has been move away from defined benefit to defined contribution schemes. Here we have an opportunity to provide an alternative that guarantees to employees a better form of pension than they could get. We are not prescribing a route, or saying that that is what must be followed, but providing an option.

As the hon. Member for Eastbourne said, it is important that the new clause would affect new members, not existing members. It would allow a company to look at the way in which its pension scheme was developing and the associated risks, and, if necessary, enable it to share some of that risk. It would be far preferable for there to be some risk sharing, if that resulted in people getting a better income in retirement, rather than a straightforward choice between one scheme or another, which is the situation at the moment.

This excellent new clause considerably enhances the scope of what we are seeking to do in the Bill. So far, the Ministers have listened and been prepared to make amendments, when necessary, in the light of our discussions. I hope that the Minister will accept new clause 5 and realise the benefits that it offers to the community that we all seek to serve.

Mike O'Brien (Labour, North Warwickshire)

It is a pleasure to welcome you back to the Chair, Sir Nicholas.

I do not disagree a great deal with the general argument put forward by the Opposition spokespeople and the hon. Member for Ryedale, but I disagree with the new clause and the suggestion that we should legislate now, rather than having proper discussion and consultation before we start to legislate.

We are interested in conditional indexation and risk sharing. We welcome the work of the ACA and I extend my thanks to Ian Farr for attending the oral evidence session and raising what we all recognise as an issue with some potential. We need to identify precisely the extent and nature of that potential. However, because the issue is both important and complex, I am not prepared to rush through legislation for conditionally indexed schemes until we and stakeholders have had time to consider all the issues fully and to consult properly. We should bear in mind that Lord Turner said in his report that our pension system was possibly the most complex in the world. We need to be sure that we carefully consider any measure that would increase that complexity, which the new clause clearly would.

On a recent visit to the Netherlands, for example, one of my officials was told by a Dutch representative that the intricacy of the new conditional indexation system means that schemes are understood by fewer members than ever before—they have become more complex. One of our aims throughout the programme of reform has been to encourage people to take personal responsibility for saving for retirement. Adding complexity to occupational pension schemes would not sit well with that aim. If people are to take personal responsibility, it is important that they understand the scheme in which they are saving. Conditional indexation and risk sharing add to complexity, but they might be a necessary complexity. We need to look at the way in which we take the issue forward.

I do not disagree with the generality of the argument. I merely say that we should look at the issue with more care and consideration, rather than rushing through legislation now. First, we do not know enough about the impact of the proposals. At such a delicate time for defined benefit schemes, it would be irresponsible not to take a bit more time to assess and to be clear about the impact on existing provision and the potential impact on the members of such schemes.

As the hon. Member for Ryedale rightly pointed out, the move away from DB schemes has steadied recently. That has given us some time. I hope that the deregulatory proposals in the Bill will continue to produce that steadying so that employers know that there may be changes in the future that will help them. We are further looking at more deregulatory measures, but we are also putting forward in this Bill deregulatory measures that will be of assistance to them.

As David Yeandle, of the Engineering Employers Federation acknowledged in his oral evidence to us, there is limited interest among employers for risk sharing. There is not an enormous demand for conditional indexation. A number of other witnesses commented that more work should be done, and that any changes were probably not for this Bill. Jeannie Drake, who was also a member of the Pensions Commission, said:

“My immediate point on the conditional indexing is that it should be looked at rather than put in the current Bill.”——[Official Report, Pensions Public Bill Committee, 17 January 2008; c. 110, Q135.]

We do not want to add another layer of legislation if it might do little in practice to encourage continuing defined benefit provision. I take the point that in Holland, where there is a different culture in relation to pensions savings, they have not used conditional indexation very much. However, it is there as a fall-back position, if they should need it. I take that point, but that does not mean that our different culture might not result in employers taking a different approach. We just do not know what might happen, and I think that we need to find out a little more.

As the Government have always made clear, we are serious about encouraging good quality provision by removing unnecessary burdens. That was why we brought forward the deregulatory review. I realise that when the hon. Member for Eastbourne tabled the new clause and new schedule, he did so with the assistance of outside organisations, so I shall not comment too much on the drafting. There are some problems with it, but I take his point that it is not his job to get the drafting right. We are happy to do that, so I will not make that point. However, this clause would not be ideal if we were going to do implement such a proposal, and I am suggesting is that we should not do that just yet.

I am also concerned that the references citing the Netherlands as some sort of ideal example are not terribly helpful, especially given that the Financial Times last week highlighted the case of claims that were made in the Netherlands that a particular major international company, which is also very active here, had not been increasing its contributions to the appropriate level to target the payment of indexation genuinely. Although the board of that company denies any wrongdoing, the matter is now being taken forward in court. I make no comment about the accuracy of the claims and I use the example only to point out that this is not some sort of failsafe way to avoid controversy on employers’ contributions. On the contrary, it seems to be very controversial indeed.

Similarly, the proposals before us involve complex legislative changes to a number of different requirements. When I spoke to Ian Farr, he seemed to suggest that these changes could be brought about through limited amendments to our legislation. I am very sceptical about that. I actually think that we would be creating a new area of shared risk if we decided to go ahead in that way. That could well produce a whole series of legal complexities. This is an area of law that can be subject to quite a lot of litigation. Unless we get measures right and give them full and proper consideration, we are going to end up with rushed legislation that has not been properly consulted on.

I suspect that we will need not just a few tweaks to our legislation, but quite a careful setting out of a new area of risk sharing for pensions, which might be quite a complex area of law. In addition to the provisions tabled, there will need to be changes to a wide range of other measures relating to employer debt, scheme funding, surplus transfer values and disclosure. The impact of all the other changes that would be consequential on making this change would also need to be given careful consideration. This is not the kind of radical legislative change that ought to be left to secondary legislation, so I do not accept that we can just put forward something broad and leave it all to secondary legislation. Such a measure would be quite complex and could be subject to litigation, so it would be better to include it in primary legislation.

I want to make it clear that I have listened to the ACA, the CBI, the NAPF, the EEF and others and that I value their important contributions, so I hope that the Committee will lend its support to a full consideration of the various approaches to risk sharing. I have asked my officials to undertake a detailed analysis of it.

I can also announce that we aim to issue a full consultation paper in June. We plan to allow 12 weeks for thoughtful and full responses to the issues. It is important that the issues are given full and proper consultation, and we will report on the consultation in the autumn. We can then take informed decisions that, I hope, will be built on a consensus after proper consultation. If we need to make primary legislative changes—we probably will—we will have to find a timetable to do so, perhaps in a fourth-Session Bill, subject, of course, to the will of the House.

I want to put on record my commitment to the process, because I see clearly the potential of risk sharing. However, we do not want to introduce something without a detailed consideration of the issues and a full understanding of the impact of the changes on scheme members. I therefore urge the Committee to lend its support to the consultation that I have outlined, in order to support perhaps the idea, but not this particular new clause.

Nigel Waterson (Conservative, Eastbourne)

There we have it: another review—marvellous. I feel that all my efforts have brought forward a mouse, and although I do not want to blacken our last jolly day in Committee, I must disagree with the Minister. If the Government have not given detailed consideration to those matters, it is not because they have not had the opportunity; they have simply chosen not to. If the review—the Minister said it would start in June, but I do not know when it will finish—is to be anything like the Lewin-Sweeney affair, we will be better off without it, because, with no personal criticism of Messrs. Lewis and Sweeney, they were just doomed to disagree on all the big issues, and they duly did. Their report, as I have already said, was very timid, and the Government built a new layer of timidity on top of it.

My offer of a slap-up dinner is non-transferable. Despite my hon. Friend the Member for Ryedale trying to add a new clause to it, it does not apply to a Minister in the Lords. I shall not press the new clause to a Division, but we will return to it on Report. More importantly, judging from the reaction so far of some of their lordships, and having heard the hon. Member for Rochdale speak for the Liberal Democrats, it sounds like a Minister in the Lords would have a claim on that offer of dinner, but I want to make it clear that they do not, so it would be far better for the Minister for Pensions Reform to concede the point now.

I am delighted that the Minister welcomes the work of the ACA and the APL—he is right to do so. However, it is a bit churlish to say that the idea has some potential, and then to lecture us about rushed legislation. There is no rush. Many serious-minded individuals have considered the issues closely. The only problem is that the Department for Work and Pensions has not—yet. I am talking about the NAPF, the SPC, the ACA, the APL, the CBI and any other acronym or set of initials that one can think of. All those people are lined up on my side of the argument; it is the Government who have been slow to catch on.

Mike O'Brien (Labour, North Warwickshire)

May I assure the hon. Gentleman that the DWP has given full and due consideration to the issue? Before he claims that all the people whom he cited are lined up on his side of the argument, he should consult them, because he will find that they will welcome the announcement that I shall hold a full and proper consultation on the issue with those very people.

Nigel Waterson (Conservative, Eastbourne)

I am sure that, faute de mieux, they will welcome a consultation, but they would much prefer some action, as indeed would we. We intend to press the matter—in future debates, if not today.

The Minister suggested that the issue was much more complex than our new clause and new schedule suggest, but the Association of Pension Lawyers just does not agree—it is as simple as that. The Department must focus on the matter because DB schemes are in the last chance saloon and there is no point messing about with further consultations when we could be getting on with things.

The Minister suggested that Holland was not the garden of Eden, and I am the first to accept that. Of course there may be problems in the Dutch system, but it is staggering how much more advanced it is in the penetration of DB schemes in the work force. I have conceded that there are structural reasons for that, and I am delighted that his officials have followed my well-trodden path over there to talk to some people. I assume that, if they spoke to the same people as I did, those people will have said the same things that they did to me, and I have taken the Committee through their views. Surely there must be something that we can learn from a system that has a 95 per cent. penetration of DB membership. Surely whatever they are doing is working and, frankly, whatever we are doing here is not working. That is a matter for not just today, but another day. I beg to ask leave to withdraw the motion.

New Clause 7

Paul Rowen (Liberal Democrat, Rochdale)

I beg to move, That the clause be read a Second time.

The new clause is about the role of the Information Commissioner. It would enshrine in the Bill the commissioner’s role and give him full jurisdiction over the workings of the Personal Accounts Delivery Authority and the Pensions Regulator. So that that power could properly be exercised, it would also require the Secretary of State to prepare and keep under review a code of practice setting out the information about pensions that could be disclosed by those and other authorities. Before that code was introduced, the Secretary of State would have to consult public bodies, including the Information Commissioner, and people in the pensions industry whom he deemed appropriate.

The code of practice would state which information about pensions could be disclosed, which is important. In recent months, we have seen the appalling way in which personal data have been mislaid by public authorities or not properly encrypted when sent out—the Department for Work and Pensions has been perhaps the greatest culprit—and the careless way in which huge chunks of personal information have gone missing. In recent months, hardly a week has gone by without one or other area of government losing personal information.

When the initial loss of Child Support Agency child benefit details was announced, the Prime Minister agreed at Prime Minister’s questions that the role of the Information Commissioner needed to be expanded. Yet another review has been set up to examine that role, which is vital because we cannot have sensitive personal information being treated as it has been by the DWP and other Departments.

The Bill will increase considerably the number of people in pension schemes. Perhaps up to 6 million people will be signed up to personal accounts, and they will be individuals who have not been saving in pension schemes in the past. The information will be held by a public body, and we believe that it is important—

Paul Rowen (Liberal Democrat, Rochdale)

I would like to quote from a statement made by the Prime Minister.

Nigel Waterson (Conservative, Eastbourne)

And you were doing so well.

Paul Rowen (Liberal Democrat, Rochdale)

I will not go there. The Prime Minister said:

“We will give the Information Commissioner the power to spot-check Departments, to do everything in his power and our power to secure the protection of data. In other words, we will do everything in our power to make sure data are safe.”

That was the statement he made following the very shocking loss of information from HMRC.

What this new clause does is to set up a mechanism for ensuring that the Information Commissioner has a role in protecting data. Over 6 million people will be signing up for personal accounts. The pensions authorities will therefore have a considerable number of personal details about these people, and it is quite important that this information is protected. The code of practice that this clause sets up will enable a dialogue to take place between the Secretary of State and the Information Commissioner on what sort of changes in attitude the Information Commissioner wishes to see from Departments like the DWP to ensure that data are protected.

Perhaps I should remind members what the House of Commons Justice Committee had to say in its report earlier this year. They pointed out that the Data Protection Act 1998 applies to private organisations and individuals and they can be held criminally liable if data are lost. But it does not currently apply to Government Departments. On 3 January, the Information Commissioner, Sir Richard Thomas, said in response to this that losing data should be a criminal offence. New clause 7 does not introduce that: that presumably will come when the reviews by the chairman of PricewaterhouseCoopers and the Information Commissioner, set up by the Prime Minister, are published.

What this new clause does do—and I think it is an important clause and the sort of clause that should apply to all public bills which grant Government Departments more access to private individuals’ information—is require the Department and other bodies it sets up to think very clearly how that data should be handled. I think that is a fair and reasonable point.

To quote from the Chairman of the Justice Committee, my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), about the scale of the problem at the moment:

“The scale of the data loss by Government bodies and contractors is truly shocking. But the evidence we have had points to further hidden problems. It is frankly incredible, for example, that the measures Revenue and Customs has put in place were not already standard procedure.”

This particular new clause has a requirement that there is a set of standard procedures for handling data loss relating to personal accounts before the pensions authorities actually begin to collect that data. So we are saying very clearly at the beginning that we regard this as vital and so important that we have sought to include the clause in the Bill. I do not see why the Minister cannot support that.

I hope that the review will introduce criminal charges for Departments that lose data, but we are proposing setting a standard and saying that, in future, when the DWP is collecting data—in this case about pensions—there will be clear guidance. People, including the Information Commissioner, will be involved in setting out that guidance, and it will follow from the review that there will be consequences if that personal data is not adequately protected. By having a code of practice, following up the review that the Prime Minister has commissioned and having legislation that makes data loss a criminal offence for Departments, we can provide people with a level of security for their personal data which they are not getting at the moment, and to which I believe they are entitled.

Mike O'Brien (Labour, North Warwickshire)

I have no problem with the broad thrust of the hon. Gentleman’s proposal: that the Information Commissioner should be able to cover this, and that the Freedom of Information Act 2000 and data protection provisions will apply in the normal way. They already do. We do not need this. That is the problem. The Government already have the necessary provisions in place. Indeed, section 44 of the Bill strengthens the sanctions for unlawful disclosure of personal data by staff of the Pensions Regulator. These sanctions will extend to the delivery authority in the event that it is required to handle personal data on the regulator’s behalf. Our view is that the measures in the hon. Gentleman’s amendment will generally replicate safeguards already in place. The Information Commissioner already has powers to oversee the data handling of all present and future data controllers including the regulator, the scheme, and also the delivery authority if it becomes responsible for any personal data.

Under section 51 of the2000 Act, it is the duty of the Information Commissioner to

“promote the following of good practice by data controllers and in particular so to perform his functions under the Act as to promote the observance of the requirements of this Act by data controllers.”

The commissioner has a legal duty which involves promoting the use of codes of practice for data protection, and is keen to be involved in further developing and amending them. It is in fact the commissioner who will do a lot of work to develop those codes.

Paul Rowen (Liberal Democrat, Rochdale)

I was listening with interest to what the Minister said. Is he aware of clause 71 of the Serious Crime Act 2007? It is relevant because my new clause is modelled on it. In other words, in a Bill that has just gone through the House, the Government have put in place very clear and explicit arrangements—in this case the code of practice for disclosures of information to prevent fraud. The Home Office has said very clearly that it will draw up a clear code of practice in conjunction with the Information Commissioner. It is not just relying on existing legislation, it is actually making a clear statement. If that is Government policy in the Home Office, does the Minister not accept that there is a very clear case for doing it here, which is what our amendment seeks to do?

Mike O'Brien (Labour, North Warwickshire)

The problem is that in respect of the area we are now covering—the pensions legislation and the bodies it is setting up—the Pensions Regulator and the DWP already have documents which are effective codes of practice. We work closely with the Information Commissioner in ensuring that they give full coverage. I say very clearly to the hon. Gentleman that we are satisfied, and the advice I have been given is, that PADA, the Personal Accounts Board that we are setting up, the Pensions Regulator and the Department are already covered. We do not need the new clause. Further, we have consulted the Information Commissioner; he has indicated that he is not seeking a statutory code of practice on the matter in addition to what he already has.

In effect, the Liberal Democrats are offering something that is not only covered by existing legislation but is not particularly wanted by the Information Commissioner. On that basis, I hope that the hon. Gentleman is duly reassured that what he is seeking to do is not in dispute—in the broad thrust at least, although I might quarrel with some of the detail. The broad thrust is not in dispute and is already covered. If the hon. Gentleman looks at the detail, he will find that what he seeks is already, generally, going to happen.

Paul Rowen (Liberal Democrat, Rochdale)

I listened carefully to the Minister and cannot say that I am reassured, because the DWP’s record in the area is hardly exemplary.

Mike O'Brien (Labour, North Warwickshire)

What record is the hon. Gentleman referring to? HMRC is not part of the DWP, but of a different Department. I am not sure what his “record” of the DWP specifically is. There have been one or two issues, but they have not been on the scale that he seems to be alluding to.

Paul Rowen (Liberal Democrat, Rochdale)

The Minister is aware of the data found on the roundabout in Torbay. I regard any loss of data, whether on 1 million people or on 10, as a serious issue. My view is that, yes, there are codes of practice across Government as a whole that are not operating to the level of security that they should be. Accepting that, I am more reassured by what the Information Commissioner said and I am sure that when we get the Prime Minister’s review we will have a further opportunity to pursue the matter. Therefore, I beg to ask leave to withdraw the motion.

New Clause 17

David Borrow (Labour, South Ribble)

I beg to move, That the clause be read a Second time.

The clause is a modest one, which aims to deal with an anomaly in the Pension Protection Fund legislation. The issue was first raised by my hon. Friend the Member for Preston (Mr. Hendrick), who is my own Member of Parliament, in a ten-minute Bill debate in the House on 17 October last year. He raised the issue of members whose pension schemes have become insolvent and who are therefore reliant on the Pension Protection Fund for their future pensions but who, because they are under the age of 50, are barred by the rules from access to the funds in that fund. A small group of individuals, under their schemes that went insolvent, therefore necessitating the use of the Pension Protection Fund, had a provision that would have sometimes allowed them to have access to funds prior to the age of 50, particularly in those instances where they were terminally ill.

Generally the provision is for individuals who are medically certificated as having less than six months to live to have access to a lump sum. A similar provision exists within the financial assistance scheme, which was set up for those pension schemes that went insolvent prior to the Pension Protection Fund being set up. However, the provision is not at the moment in place for the Pension Protection Fund. A small number of individuals unfortunately reliant on the fund will find themselves to be terminally ill but unable to access any funds at all. Most final salary schemes recognise that, in such circumstances, it is reasonable to make a lump sum payment to help with the additional costs—heating, lighting, special food or diet and even that special family holiday that the individual would want in the final months of life.

The provision would enable the board of the Pension Protection Fund to make a payment of two years’ worth of the pension that the individual would have been entitled to had he or she retired at the normal retirement age. It is a modest and not very expensive provision. It has been difficult to work out the number of individuals who have claimed such a provision within the financial assistance scheme because the numbers are so small. The issue has been overlooked, and I hope that my hon. and learned Friend will look favourably on the new clause.

Mike O'Brien (Labour, North Warwickshire)

I thank my hon. Friend for raising what is the important issue of a small number of people who are terminally ill and for whom the sort of financial security that might have been available from their pension scheme is not available from the PPF. It was raised—as he said—in a ten-minute Bill last October by our hon. Friend the Member for Preston. There are strong arguments for change and I welcome discussion of the issue.

Since the matter was first raised, my officials and I have been considering whether it would be possible to ensure early access to some of an individual’s compensation entitlement should they fall terminally ill before they reach normal retirement age or normal pension age. We still need to address some issues before we can make such a change to the PPF. We would need to ensure that changes that increased liabilities for the PPF were sensible and affordable. It is vital that the PPF maintain the confidence of other schemes that fund it through the levies. Any increased costs would need to be justifiable and not lead to disproportionate increases in the levies.

We also need to ensure that any changes do not place inappropriate burdens on the PPF, for example by requiring it to make difficult decisions about entitlements, which could lead to disputes or to a protracted decision-making process. Currently, eligibility for PPF compensation does not require the PPF to make those sorts of decisions and the Government believe that it is important for the good running of the fund that that should not change.

I therefore see merit in the proposals set out in new clause 17, because the test for entitlement could be applied using existing mechanisms to quickly and effectively make decisions on terminal illness; also because the small number of people who might become terminally ill would receive a significant sum—an average of around £10,000—while limiting the cost to the PPF, and therefore the impact on levy payers. The scheme envisaged by the new clause therefore appears to have found a suitable balance.

There are, however, some additional details that need to be considered, for example the impact on possible future compensation paid to survivors. I therefore welcome the opportunity to consider in more detail the proposals in the new clause with a view, I hope, to returning to the issue at a later stage of the Bill. At that point, I hope we will be in a position to bring forward a clear clause that ensures that we are able to deal with this lacuna, this gap in provision. I want to see that gap filled in due course. I hope that we will have a more positive response at a later stage.

David Borrow (Labour, South Ribble)

I am grateful for the comments of my hon. and learned Friend. I am sure that my hon. Friend the Member for Preston will raise the issue later in the proceedings, possibly on the floor of the House where he can participate fully in the discussions. I beg to ask leave to withdraw the motion.

New Clause 19

Nigel Waterson (Conservative, Eastbourne)

The new clause is another return to the simplification, or deregulation, agenda. It is very limited in scope; it is for a limited statutory override. One of the issues looked at by Messrs. Lewin and Sweeney in their review was statutory override. The amendment is sponsored by the National Association of Pension Funds, and the background is the whole thrust of trying to limit or reduce the costs and burdens on sponsoring employers of existing defined benefits schemes. Those costs have gone up a lot in recent years. The latest NAPF annual survey showed that the administration costs of an average scheme have risen by over 50 per cent. in the last two years alone. That is a staggering figure.

The NAPF welcomes the Government’s rolling deregulation programme—rolling is just about correct, although it is not very fast. It says,

“we believe the Government could go further and accelerate the process”.

That is a marvellous piece of understatement. One way in which that could be done, would be to introduce a limited statutory override into the Bill. I have already touched on the work of the external deregulation reviewers. They identified a problem whereby some schemes are unable to take advantage of Government simplification measures, due to the way in which their own scheme rules are drafted. It is not the law itself that stops them, it is their own scheme rules. The problem is about how that can be changed.

Lewin and Sweeney recommended that the Government should legislate to ensure that employers and pension scheme trustees can override their scheme rules in certain specific cases set down in the legislation. That would include the right to make changes to the indexation requirements introduced in the 2004 Act, and it should apply in other circumstances such as the revaluation in clause 79.

As we near the end of the Committee stage I may, for once, be pressing on an open door. The Government have said that they agree with the measure in principle, but they also believe that it should be possible to make such changes by secondary legislation. The NAPF does not entirely agree with that because of the complexity of the pensions set up at the moment. It believes that we should send what it calls a “strong signal of support” to those employers offering high-value occupational pension schemes—something that I entirely agree with. It says,

“the amendment...seeks to put the matter beyond doubt and provide a power—in primary legislation—which will enable the Secretary of State to make regulations to extend the Pensions Act 2004 indexation changes and those set down in clause 79 of this Bill regarding revaluation to all pension schemes.”

I have two final points that are important to put on the record.

Mike O'Brien (Labour, North Warwickshire)

The hon. Gentleman will be aware that section 68 of the Pensions Act 1995 enables regulations of the sort that he describes to be brought forward. In effect, the provision that would enable us to bring forward the regulations is already there. If it were the case that we intended to bring those regulations forward, that prompts the question of what point the amendment would serve.

Nigel Waterson (Conservative, Eastbourne)

The obvious riposte to that is to ask the Minister why he has not brought forward regulations, draft or otherwise. The NAPF accepts what the Government are saying in principle, but it thinks that we should send a strong message to industry and sponsoring employers that this is possible. I do not want to get into this too deeply, but there are wider issues about sections 67 and 68 of the 1995 Act. The Department’s view has been that those sections do not bar pensions schemes from doing this, that or the other. In fact, on the basis of legal advice, which as we all know is rarely black or white, many employers have often felt that they are not allowed by those sections to do certain things. We will return later to those issues, particularly in relation to section 67. We still think that it is worth proceeding with the new clause but if, when he comes to speak substantively on this, the Minister can confirm that these regulations are about to hit an unsuspecting world, I might take a more charitable view on pressing the new clause.

Any decisions regarding changes to scheme rules would still be subject to mutual agreement by the employer and the scheme trustees and the changes would only affect pension rights accrued in the future, not those earned in the past. That is a chunk of consensus that is now accepted on all sides. It emerges from Sweeney and Lewin that accrued rights should not be tampered with. On that basis, I commend the new clause to the Committee.

Mike O'Brien (Labour, North Warwickshire)

I am not sure that I entirely got the answer I was seeking about why this particular new clause is necessary. I do not think that there is any difference between my view and that of the hon. Member for Eastbourne about the need to provide a statutory override. We have already indicated, as a matter of policy, that we intend to issue regulations for consultation later this year, which will enable the override to be put in place. Given that we already have a statutory capability to introduce those provisions, I do not detect from the hon. Gentleman any convincing argument as to why we need to include it in the Bill; I would be prepared to consider it if there was one. The provision is there and we do intend to make this change; he is knocking at an open door and it is important that the statutory override is put in place.

This can be quite a complex area, as the hon. Gentleman said, so I want to ensure that when we publish the regulations we have time for the various employers’ groups and others to look at the regulations and give us their views. That is the better way forward. The new clause would not prevent us from doing that, but it is unnecessary for that purpose. I aim to have a consultation later this year to achieve what the hon. Gentleman seeks. I hope that it will then be brought into effect by Parliament, either this year or in the early part of next year, so the change that he seeks is on its way, and not even at a slower pace than that sought by the new clause. The reason we have not brought it forward so far is that we have been working on the Bill—there is a limit to the availability of parliamentary draftsmen and officials to do everything at once. I wish that such resources were unlimited, but they are not. I will seek to bring forward the changes as quickly as is reasonably possible.

Nigel Waterson (Conservative, Eastbourne)

I am delighted that the Minister thinks that he has the powers to do this, and at some point might even use them. I appreciate the point about limited availability of parliamentary draftsmen, which is why we have tried to help him out by drafting the relevant provision. I do not think that he has raised any technical issues on that particularly. He has confirmed my worst fears that this is indeed part of what is called a rolling deregulatory programme. We would like to see it roll a bit faster, that is all that I am really saying. Now it is all going to be swept up in the review. Another review was announced in the Chamber today, I gather, so I think that we are up to 57 reviews since the current Prime Minister took over.

Mike O'Brien (Labour, North Warwickshire)

I assure the hon. Gentleman that we are not reviewing the statutory override idea at all; we are merely going to put it into regulations. The Lewin and Sweeney review has been completed so there are no more reviews, it is just a matter of getting the regulations out there, consulting on them to get them right, and getting them implemented.

Nigel Waterson (Conservative, Eastbourne)

Yes. Let us not go further into the nature of the Lewin and Sweeney exercise, but it seems like a wartime convoy going at the speed of the slowest ship when there seems to be a lot of consensus on what needs to be done. The Minister has the powers, and we should get on and do it. Clearly, the door at which I am pushing, and which is supposed to be open, is stuck. Until the odd-job man makes an appearance, I beg to ask leave to withdraw the motion.

New Clause 21

Andrew Selous (Conservative, South West Bedfordshire)

I beg to move, That the clause be read a Second time.

It is my duty to give my hon. Friend the Member for Eastbourne the odd rest during our proceedings as he has borne the brunt of our efforts for a while.

New clause 21 would ensure that there are provisions for the sharing of personal accounts on divorce or the ending of a civil partnership. It has been supported by the Equality and Human Rights Commission, and I am grateful for the brief that it provided.

The new clause is simple. I am well aware of the concerns expressed by both Ministers, and indeed by Tim Jones and Paul Myners of the Personal Accounts Delivery Authority in the evidence sessions, that we need to keep the administration of personal accounts simple. They do not want a mass of transfers in and out, which I believe are barred until 2017. If there is a criticism of new clause 21, it is probably that it is modest in scope, too restrictive and would not help enough people because it relates only to couples when they both have a personal account. The issue is not easy, and we are not talking about new money coming into the personal account scheme or money going outside in its entirety.

Paragraph (b) allows transfers by mutual consent, which I hope the Minister has noted. That is important because I learned from the Equality and Human Rights Commission briefing that although pension sharing rules on divorce were introduced in December 2000—since they were introduced there have, sadly, been more than 1 million petitions for divorce—figures from the Department for Constitutional Affairs reveal that in the year to September 2007, less than 8 per cent. of divorcing couples obtained pension-sharing orders. That tells me that there is a real problem in this area, and that an asset, which in many cases may be worth as much or perhaps more than the former matrimonial home, is not being fairly shared. A wife may have contributed greatly to a marriage over many years or may have taken time off to look after children or a sick relative, and it is absolutely right and important that she should enjoy the proceeds of pension contributions to which she has a right, given her part in the marriage over many years. This is an area that couples often find contentious, and believe will be complicated, or perhaps they are not even aware that it is possible to have a claim on a former spouse’s pension.

I hope that the new clause commends itself to the Minister. I know that there is a bar on transfers before 2017, but I repeat that we are not talking about transfers out of or into the personal account scheme. We are talking only about changing the fair sharing of pension pots within the personal account scheme. I think that in 2017 it would probably be necessary to go beyond the provisions in new clause 21 and perhaps look at other cases. I hope that the Minister, perhaps when he replies, will give the Committee an indication of whether the review of transfers in and out, in 2017, will take into account that very important aspect.

I hope that I have set out where we are coming from in tabling new clause 21. I hope that the Minister realises the seriousness of the matter, given that, as I have just said, less than 8 per cent. of divorcing couples currently obtain pension sharing orders. If he cannot accept the new clause, as drafted, I hope very much that he will reassure us that the Government are aware of the importance of the matter and intend to do something about it.

John Greenway (Conservative, Ryedale)

I think that my hon. Friend is on to something with this new clause. I want to make a brief point that he did not touch on in his otherwise excellent rÃ(c)sumÃ(c) of the new clause. He has said that it will apply only when a divorcing couple both hold personal accounts. One of the attractions of the personal account scheme will be its low cost. On Tuesday, in Committee, we discussed changes to provisions for pension splitting on divorce and the prospect of further work to be done by the Government. However, it is not clear whether someone could transfer their money into a personal account. I see nothing in the Bill that would allow for that.

Clause 100, which I have been rereading along with its explanatory note, deals with the exclusion of, rather than allowing, transfers. Such transfers would entail very little cost. In fact, there would probably be no cost at all, other than a charge that might be levied by the scheme for such a transfer. Given that we are probably dealing with relatively low-income earners, I find the prospect of the new clause particularly attractive. I am not sure whether it needs to be included in the Bill, or whether a power to deal with it in regulations is buried in the detail. However, on principle, I support my hon. Friend’s suggestion. I regret only that I did not spot the new clause earlier and add my name to it.

James Plaskitt (Labour, Warwick and Leamington)

This is indeed an important matter and I am grateful to the two hon. Members who have just spoken on it. As I said, the new clause would replicate for personal accounts the effect of provisions in the Welfare Reform and Pensions Act 1999. Pension sharing was a flagship policy of the Government’s first pensions reform and the arrangements in the 1999 Act will apply to the personal accounts scheme, as they do to all other occupational pension schemes. Given that the Act provides already for pension sharing for occupational schemes, we have not duplicated the provisions in the Bill.

If a couple divorces and the court makes a pension sharing order, the trustees of a scheme will arrange for the former spouse or civil partner to be awarded a pension credit, which will be a share of the member’s pension rights. The trustees will then discharge the pension credit into a pension scheme in the former spouse’s name, who will then become a pension credit member of that scheme.

Andrew Selous (Conservative, South West Bedfordshire)

I am reassured by the way in which the Minister started his remarks. For the sake of clarification, we heard a lot during the evidence sessions about no transfers at all before 2017, but is the Minister now saying that it will be possible in divorce cases to move money in and out before 2017?

James Plaskitt (Labour, Warwick and Leamington)

We covered that in previous debates on divorce and arrangements for it. The arrangement is that the pension credits, as they are called, that come out of a divorce settlement and are awarded by the courts can be transferred into such personal pension schemes—the point covered by the hon. Member for Ryedale—but there is a ban on them subsequently being transferred out.

Scheme rules determine whether a scheme will accept the pension credit members. Occupational pension schemes are not obliged to accept them, and very few do. Some existing schemes do not accept them if the former spouse has no connection with the sponsoring company. It is our intention that personal accounts will accept the discharge of a pension credit into personal accounts if that is what the former spouse wishes, provided that the pension credit has come from the personal account or the former spouse has a personal account in his or her own right as either an active or deferred member.

The former spouse may have the pension credit discharged into another pension arrangement, such as a personal pension, if that is what they prefer. There is no compulsion to use personal accounts. The Government’s detailed intention to pension sharing in personal accounts will be covered in the scheme order. I am grateful that the new clause has provided the opportunity for me to explain our intentions. I hope that I have offered assurances. Our proposals are wider in scope than the new clause would allow, and I hope that the hon. Gentleman will agree to withdraw it.

Andrew Selous (Conservative, South West Bedfordshire)

I am indeed reassured by what the Minister. He will recall that, at the start of my remarks, I almost criticised the new clause by saying that it was more restrictive than I had wanted it to be. As always, I was fearful that the hon. Gentleman would say that we were overdoing it by putting forward a proposal that was too complicated. However, what he said about the scheme order is good news and, on that basis, I beg to ask leave to withdraw the motion.

New Clause 22

Paul Rowen (Liberal Democrat, Rochdale)

I beg to move, That the clause be read a Second time.

We have so far rightly spent a lot of time dealing with accumulation and the measures that people have to take to ensure that they have a pension worth saving for. The new clause deals with what happens when someone retires and how we should go about it. I refer hon. Members to proposed subsection (1)(b) because that measure is different from existing legislation. It requires the customer to select an annuity from the open market, while the existing provision states that the customer has the opportunity to choose on the open market. In other words, we believe that people should go on the open market rather than simply be covered by the provision saying that they may go on the open market, and we want that advice linked to the information made available to people with personal accounts

Why have we tabled the new clause? A comparison of the figures on the FSA’s website for a different range of people shows that there can be up to an average of 15 per cent. difference between the best and worst annuity that a person could purchase. For example, let us consider a single male with a five-year guarantee on a level income annuity. At the age of 65, between the highest and lowest annuity available, there was a difference of 10.45 per cent. For a joint annuity in respect of a husband and wife, the spouse being three years younger, at the age of 65 the difference for level income is 18.89 per cent. and, escalating at 3 per cent. per annum, it is 22.28 per cent. Those differences are huge.

Within the companies on the FSA website, which are some of the most commercially competitive and well-known in the country, such as Norwich Union, Legal & General, Canada Life, Friends Provident and Reliance Mutual, there is a huge range of differences.

With impaired life annuities, which are typically available to someone with an impaired life, such as because they are a smoker or have suffered a heart attack, there can be up to a 40 per cent. difference between the benefits under such a scheme and the ones they could get with an enhanced annuity. Those are staggering figures. If hon. Members consider the original Turner report, we have gone down this road to try to get a low-cost saving model that could give people an enhanced pension, which is laudable. However, if we do not do so, when we come to the decumulation phase, we will more than encourage people to use the open market—we will make them use it. We will see all the benefits from the savings that people have by going through the personal accounts wiped away because they might be advised, perhaps by the firm that they are working for, to go to a preferred annuity provider that may not give the best rates. It is in everybody’s interests, not least the state’s—given that any shortage of income may have to been met through enhanced benefits—that we encourage, nay require, retirees to get the best open market option.

John Greenway (Conservative, Ryedale)

I am entirely at one with the hon. Gentleman’s objective, but I am slightly confused about why he thinks that we need the new clause. I understand that the personal accounts scheme would provide the same opportunities and entitlements that apply to all other pension schemes, particularly personal pension schemes, where the open market option already exists. However, we should address how we can ensure that retirees are given that information. Perhaps the Minister will consider including that in the regulations to be made under clause 8(2).

Paul Rowen (Liberal Democrat, Rochdale)

The hon. Gentleman is right. He knows a lot more about this than I do. We want to ensure that retirees get that information and go down that route. However, we tabled the new clause because we want that information to be required to be made available under the Bill, rather than saying that it should be made available. That is a matter of semantics, but it is important. For example, it is estimated that in 2007 those buying an annuity lost £1.25 billion of pension and benefit by not accessing enhanced annuity rates. At the moment there is insufficient information available for people purchasing annuities and some relevant issues are not being addressed. In due course, an additional 6 million to 10 million people will have a personal account and will want to cash it in for an annuity, and it is important that they go for the open market option.

I will be interested to hear how the Minister intends to ensure that that option is made available. As the hon. Member for Ryedale knows, we have laboured the point about information and advice quite a lot, because the success of the personal accounts is predicated on the quality of the advice that is available. By including the new clause in the Bill, we would be requiring the open market option to be used, because it has the benefit of forcing people to go down that route, otherwise they may take the easy option. We know what happens when people are visited in their homes by people trying to get them to change their electricity or gas supplier: they use the information that they are given because that is all they have in front of them. The benefit of the new clause is that it says that the open market option, with all the options available, is the route that has to be chosen. I would be very interested to hear how the Minister intends to ensure that that sort of benefit is taken advantage of, if not by that route.

James Plaskitt (Labour, Warwick and Leamington)

I am grateful to the hon. Member for Rochdale for tabling the new clause. I am tempted to reply by referring him to the hon. Member for Ryedale, who has almost dealt with the matter already. Nevertheless, I have a few other things to add and some reassurances to give, which I hope will address the thrust of the argument made by the hon. Member for Rochdale and encourage him to withdraw the new clause, which, as I will try to explain, is unnecessary.

New clause 22, as the hon. Gentleman said, would require all qualifying pension schemes, including personal accounts, not only to offer, but to require, their members to exercise the open market option. As he rightly said, choosing annuities is one of the most important financial decisions that a pension scheme member makes. It is a one-off decision that can have a big effect on the value of income in retirement. For this reason, the Government fully support the open market option, which allows individuals to shop around to get the best annuity deals that they can under the circumstances, rather than simply taking the annuity offered by the provider. By shopping around, people can certainly make a very big difference to the value of their pot—as much as 30 per cent, we believe.

However, new clause 22 is not required to ensure that members of personal accounts, or any other qualifying scheme, can benefit from the open market option. Under the Finance Act 2004, all tax-registered money purchase pension schemes that provide benefits through the purchase of an annuity must offer the open market option, or they would face tax charges. As clause 14 requires all qualifying schemes to be tax registered, that requirement, in effect, already applies to all money purchase schemes into which employees can be automatically enrolled, including personal accounts.

As hon. Members will be aware, the Government, working with stakeholders, have recently conducted a review of the operation of the open market option. That review reported in 2007 and set out a number of measures to help and encourage more individuals to use it. We do not believe that it would be right at this stage to go beyond that and to force members of money purchase schemes to use the open market. Apart from anything else, such an approach could add to costs and complexity, for example if schemes had to check that the member had shopped around to avoid tax charges.

We do not believe that the Bill should create a separate set of rules just for personal accounts. Additionally, we have said that within the existing framework, the detailed design of the process will be a matter for the delivery authority, based on the conclusions of the review of the open market.

Regarding the point of information that was raised by the hon. Member for Ryedale, existing legislation already requires occupational pension schemes to provide a wide range of information to members. The relevant parts of the legislation will apply to personal accounts in the same way as to any other pension scheme.

John Greenway (Conservative, Ryedale)

I must confess that I had not thought about this point before. Could the Minister clarify how he thinks the personal accounts scheme will be structured? If someone is in a group personal pension scheme operated by a major insurance company pension provider, and the default position is that that pension provider will convert the cash in the fund to an annuity at their rates unless the person exercises the option to purchase an annuity somewhere else on the open market, is it the intention that the scheme will itself provide a default pension, or will people simply take the money and buy the best priced pension they can find? I think that the Minister takes my point that there is quite a subtle difference between the two.

James Plaskitt (Labour, Warwick and Leamington)

The hon. Gentleman is right to stress that. The important thing is to ensure that individuals reaching this point are aware of the need to shop around for their annuities and that they have the right information to do so. As I said in response to the hon. Member for Rochdale, we are making changes, which were reported in 2007, to the way the OMO works.

The Pensions Advisory Service is setting up a web-based, structured choice tool to guide people. We are working with stakeholders to facilitate the development of better focused information for customers about their annuity options. The issue will also be for the Personal Accounts Delivery Authority, which will be responsible for the detailed design of how members can access their pension savings. That will include consideration of the information that members will need when making that important choice.

I hope that I have reassured the Committee about the Government’s commitment to the open market option and that the personal accounts scheme, along with other qualifying money purchase schemes, will be required to offer that to their members. The appropriate support for information will be in place, and I hope that the hon. Member for Rochdale will withdraw the motion.

Paul Rowen (Liberal Democrat, Rochdale)

I am grateful to the Minister for his remarks and reassurance. I am happy to beg to ask leave to withdraw the motion.

Nicholas Winterton (Conservative, Macclesfield)

I advise the Committee that we have a revised selection list. Although new clause 28 is starred, the hon. Member for Stoke-on-Trent, South has spoken to me about it and I think that the issue merits a brief debate. Bearing in mind that we are not under pressure from the programme order, I am happy for the hon. Gentleman to move his new clause.

New Clause 28

Rob Flello (Labour, Stoke-on-Trent South)

I beg to move, That the clause be read a Second time.

I will not detain the Committee for more than a minute or two, especially as you have been kind enough to exercise your discretion in calling my new clause, Sir Nicholas, for which I am most grateful.

There is a small group of schemes, which my hon. and learned Friend the Minister mentioned on Tuesday, that fall between the financial assistance scheme and the PPF. Those schemes, such as that of Desmond and Sons, are ones where the employer went insolvent before April 2005, meaning that the PPF does not apply, but where winding up, for whatever reason, was delayed until after April 2005, meaning that the schemes fall outside the criteria for FAS assistance. A technicality has caused the problem—I think that I am safe in assuming that it was not the Government’s intention to exclude such schemes when the FAS was set up. They are occupational schemes, just like others caught within the FAS. The only difference is the date of winding up.

Without detaining the Committee much further, it is fair to say that such circumstances would not have been foreseen at the time. It was not reasonable to have expected pension schemes to wind up later than the employer’s insolvency, yet we know that such schemes exist. Pensioners are not getting either the pension for which they paid into the scheme—the pension they expected to get—or any help, which is a massive problem for the pensioners involved. A small number of schemes are affected, and I understand that they have a mainly small numbers of members, so I presume that the cost of putting this right will be equally small. However, it is an extremely vital issue for those people concerned with, or caught up in, such a situation.

Mike O'Brien (Labour, North Warwickshire)

The FAS was designed to help underfunded occupational pension schemes that started winding up between 1 January 1997 and 5 April 2005. The Pension Protection Fund was designed to help occupational pension schemes that were left underfunded when their employer went insolvent from 6 April 2005 onwards. The new clause refers to a small group of schemes that fall between the FAS and the PPF, where the employer went into insolvency before 6 April 2005, but, for many reasons, the pension scheme, although underfunded, did not start winding up until after that date.

A small number of schemes are affected. We know of three at the moment: Desmond and Sons, which is based primarily in Northern Ireland but also in the UK; Stanley Press Equipment; and Pinney’s. If we are to deal with the issue, it would be useful to know whether any other schemes are affected. It is an anomaly that those schemes are not covered and I want to look at that in more detail.

I am sympathetic to the claims put forward by Members who have made representations, including my hon. Friend. We recognise that some scheme members have suffered pension losses through no fault of their own, despite their employer acting legally. I am hopeful that we might find a way to assist them. I cannot give a guarantee at this point, but I encourage my hon. Friend and his colleagues who have been pressing me to continue to do so in the hope that we can find a way to resolve the issue. I hope that he will feel able to withdraw the motion.

Rob Flello (Labour, Stoke-on-Trent South)

I am grateful to my hon. and learned Friend for his comments. I am reassured that the important issue is being looked at seriously by him and his Government colleagues. While colleagues might seek to bring forward similar amendments to the Bill on the Floor of the House, I beg to ask leave to withdraw the motion.

Nicholas Winterton (Conservative, Macclesfield)

I congratulate the hon. Gentleman on his brevity.

New Schedule 2

Mike O'Brien (Labour, North Warwickshire)

On a point of order, Sir Nicholas. We seem to have moved ahead at full steam and I had not thought that I would not be here for this part of our proceedings. However, everything has progressed faster than any of us perhaps expected, so I am here, and I am pleased that I am.

Members of the Committee are grateful to you, Sir Nicholas, and to your colleague, Mrs. Anderson, for your firm and fair steering of the Committee over the past three weeks. It has been a pleasure to serve as a member of a Committee chaired by you both. I would also like to extend warm thanks to all members of the Committee, especially my hon. Friends, but also Opposition Members, especially the hon. Members for Eastbourne, for South-West Bedfordshire, for Rochdale and for Inverness, Nairn, Badenoch and Strathspey, all of whom have made Front-Bench contributions. I particularly pay tribute to the hon. Member for Ryedale, who, along with the hon. Member for Bromsgrove, has made significant contributions with his knowledge and skill.

I thank my colleagues for their help. Pensions matters can get tedious, but I am sure that they have got through a lot of correspondence and that their constituents are well informed as a result. The debate has dealt with some important issues that will affect many millions of people. It is important that we deal with this in as consensual a way as possible and that we bring together stakeholders.

I was particularly pleased that we were able to have the oral evidence sessions at the beginning of our consideration of the Bill. A number of organisations were able to come forward: the ABI, Age Concern, the ACA, the BCC, the CBI, the EEF, and lots of other initials. The Equality and Human Rights Commission, the Federation of Small Businesses, Help the Aged, Which?, the TUC, the Pensions Policy Institute and others were all able to inform our debate. The result has been that the quality of the debate from both sides has been particularly good. The information that we received from the three pensions commissioners who gave evidence was invaluable, as was the help that we received from Paul Myners and Tim Jones from the Personal Accounts Delivery Authority. I thank them all for their contributions.

I thank the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Warwick and Leamington, for his contributions, and I extend a particular word of thanks to my Parliamentary Private Secretary, my hon. Friend the Member for Coventry, South, and also to our Whip, who has made a very welcome contribution at various stages of our proceedings. I also wish to extend my grateful thanks to the officials in my Department who have briefed me, the parliamentary counsel who drafted the Bill with expertise, the police and other officials, Hansard and the Clerk of the Committee, all of whom have ensured that we were able to carry through an important Bill with a great deal of proper consideration and detailed understanding by members of the Committee. Our proceedings have taken place in a spirit of goodwill, good humour and consideration. I hope that we can look forward to the rest of the Bill’s progress through the House and the other place being conducted in a similar way.

Nigel Waterson (Conservative, Eastbourne)

Further to that point of order, Sir Nicholas. May I add my thanks to those of the Minister to your and your fellow chairman—I hope that you will pass those thanks on to Mrs Anderson—and to all the officials, the Hansard writers, the Clerks, the police and all the other staff who have made this such a smooth running Committee? I would like to thank the Ministers for their unfailing courtesy and their amazing ability to keep a straight face while advancing the most preposterous arguments—it was quite an achievement, but they have both had a lot of practice.

Mr. O'Brien rose—

Nicholas Winterton (Conservative, Macclesfield)

Order. I am not sure that there can be an intervention on a point of order.

Nigel Waterson (Conservative, Eastbourne)

I would like to thank the Labour members of the Committee, particularly the Whip—the velvet fist inside the velvet glove. The hon. Member for Caerphilly has been the big cheese, as it were, of the Committee. He kept us all running to time, or slightly ahead of time, in fact.

I usually try to enliven these events by trawling through hon. Members’ biographies that are on the internet, but this time there have been fairly slim pickings. However, I was taken aback by the unconscious irony of the hon. Member for Brent, South, who sadly is not here. Her biography says:

“From an early age I knew that as a woman in a male dominated society you have to be active and assertive, or else you won’t be heard. I am part of a generation who grew up in the Thatcher years and didn’t like it.”

There is a bizarre contradiction there. Obviously she thought that the Thatcher years were those of a male-dominated society.

The Liberal Democrats, as always, have enlivened our debates. I referred before to the fact that the constituency of the hon. Member for Inverness, Nairn, Badenoch and Strathspey includes part of Loch Ness. It is rather reminiscent of Liberal Democrat pensions policy: sometimes through the mist we thought that we perceived a shape, but then we rubbed our eyes and saw that there was nothing there at all.

I thank my colleagues on the Committee. To match the efforts of the Government Whip, we have had to have two different Whips: my hon. Friends the Members for Peterborough (Mr. Jackson) and for Rochford and Southend, East, both of whom served the Committee admirably and well. I pay particular tribute to my hon. Friend the Member for South-West Bedfordshire, who has worked extremely hard on a large part of the Bill. He brought his own expertise to discussions about the Territorial Army, among other things, and his personal commitments and beliefs to some of the other issues, too.

I am also grateful to my hon. Friend the Member for Ryedale, who has brought enormous experience and expertise to the Committee. In fact, sometimes I thought that he was doing a better job than Ministers in responding to some points. I also thank my hon. Friend the Member for Bromsgrove, who talked passionately about the pensions victims in her own constituency. I know that she has followed these issues closely for some time.

I entirely agree with the Minister about the benefits of oral evidence. There might be Bills on which that might not be so helpful, but in this case it put into context a lot of the discussions that we were to have. There were times when we had a big array of witnesses and they were almost all very helpful indeed. However, for those involved in pensions, life is one long seminar and I see the Committee as just another stage in that process. Of course, there is another seminar in a week or two, which has been organised by the indefatigable Pensions Policy Institute, to talk about means-testing and so on, so life goes on. Really, this is all part of the same process for people in the pensions world.

We regret that some of our more sensible ideas were not embraced by the Government, but as I have said before, we have pencilled them in for the pensions Bill that will be introduced under the next Conservative Government in a year or two. I thank you, Sir Nicholas, for your unfailing courtesy and helpfulness in allowing this Committee stage to go so well. We look forward to the next pensions Bill.

Paul Rowen (Liberal Democrat, Rochdale)

Further to that point of order, Sir Nicholas. May I also thank you and your co-Chair for the efficient and courteous way in which you have conducted proceedings? This has been my first pensions Bill, although I know that many hon. Members here have been through several and survived. We all are indebted to the Clerks, who assisted us in ensuring that our amendments made it on to the amendment paper. I am also grateful to members of Hansard and the police, who have helped to make our proceedings go well.

I would also like to thank the two Ministers. We have had a continuous dialogue throughout the Committee and have regularly had copies of letters that the Ministers have sent on issues that we have raised, so I thank them for that. I genuinely feel that we have had a proper dialogue in which they have agreed to change and look at various things. That demonstrates the best aspects of the Committee system, when everything is not a closed book and is open to debate.

Again, I support what has been said about the involvement of outside bodies in the oral evidence sessions, which informed the debate considerably. I have particularly enjoyed listening to the hon. Member for Ryedale, who obviously knows a great deal more about pensions than I do. I thank the Government Whip and Labour and Conservative Members for the pleasant way in which we have gone about the proceedings.

John Greenway (Conservative, Ryedale)

Further to that point of order, Sir Nicholas. I endorse everything that has been said and I am grateful for the comments that have been made about my contributions. However, there is one serious point that I want you to take from the Committee, given your membership of other Committees. I must confess that I found the evidence session, which preceded our normal scrutiny of the Bill, an extremely enlightening and constructive experiment. I have thought back to the first time that I was in Committee Room 10 in the autumn of 1987 when we were sitting on the other side of the room and not allowed to say anything. The yah-boo-sucks politics that took place in Standing Committees in those days was unconstructive, unhelpful and did not improve the quality of legislation. One of the reasons why this Committee has been so constructive and has ended up with better arguments is that so many issues were brought out in public during the evidence sessions.

From an Opposition point of view, in wanting to give the Government a run for their money, a lot of the foxes that we might have run with were shot by some of the evidence that we received. However, given that the collective objective of these occasions is to end up with better legislation, I would urge you, Sir Nicholas, to ensure that when decisions are taken in this place, the voice of reason calling for more oral evidence sessions at the start of Public Bill Committees should be heeded with real vigour. I know that you will share my view and that we can leave it in your capable hands to make sure that point is duly registered.

Mike O'Brien (Labour, North Warwickshire)

Further to that point of order, if you will permit me, Sir Nicholas. I do not want to delay the Committee, but you ought to be aware of a minor incident that occurred during the course of these proceedings yet might have escaped your notice. At one stage, the hon. Member for South-West Bedfordshire put forward a very constructive point to which my hon. Friend the Under-Secretary responded by reading the wrong note and setting out an answer to a point that was not raised—he did so with great eloquence. Interestingly, the hon. Member for South-West Bedfordshire said in response that he was greatly reassured. I can therefore say that the spirit of co-operation and constructive engagement during the course of this Committee has been unlike anything that I have ever experienced. Our proceedings have been very good humoured and I am grateful for that.

Nicholas Winterton (Conservative, Macclesfield)

The Chairman of a Committee always gets the last word.

May I thank members of the Committee for their generous comments about myself and my co-Chairman, Janet Anderson, which I shall pass on to her? I am sure she will be as happy as me to have received such generous comments.

I congratulate the Committee on the work that it has done during the past month. It has been a great pleasure to chair this Committee, and I would like to thank all members of the Committee, particularly the Front-Bench Members—that includes the Liberal Democrats, of course—and those with special knowledge. For example, the hon. Member for Ryedale has added very considerably to the knowledge of the Committee, which, ultimately, has been to the benefit of the legislation that we have been considering line by line. The hon. Member for Bromsgrove and even the hon. Members for Stoke-on-Trent, South and for South Ribble have put forward proposals succinctly that have added to the tenor and constructive nature of the debate.

I thank my Clerk, and those who have sat in when he has not been here, for their support and advice. I also thank the Official Report and the police: clearly they have added to the way this particular Public Bill Committee has gone so smoothly.

I think that this Committee has been an example to the people of this country of how Parliament actually can, in the right situation, do the job that it is here to do. We have considered a very important piece of legislation line by line. It has been done constructively. The usual channels have worked together and—uniquely one might say—the programme order has proved to be adequate, although, sadly, on many other occasions such orders are not. I believe that this Committee and the way the Government and the Opposition have worked together are examples that I hope will be understood and taken to heart by the House. I congratulate all Members on the contributions that they have made.