Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021

Lord Faulkner of Worcester Excerpts

Thursday 25th February 2021 Lords Chamber

[Lord Davies of Brixton (Lab) [V]]

My Lords, I thank the Minister for her detailed introduction. It is a pleasure to follow the noble Baroness, Lady Gardner of Parkes, because, back in the day, we were both members of the Greater London Council—long lamented by me.

Everyone has pointed out that auto-enrolment has been a success, but it is important to understand that it is still a work in process. A series of well-recognised problems need to be addressed: the exclusions, low contribution rates—there is universal agreement that they should be higher; the only issue is when—and small pots, which is relevant here. Unfortunately, there is nothing in the supporting analysis to say what the impact of changing the earnings limits will be on the number of small pots. We know that there will be millions of them; what is the impact of changing the earnings limits on the future number of small pots? This is germane to the future of the scheme.

There are also some interesting figures in the supporting analysis. I found it a bit counterintuitive that the 8,000 people being brought in by freezing the trigger helps older people, more of whom are brought in by this change than younger people. This points out that we are running out of time: it is important to get the future of the scheme sorted out because these people do not have any time. We are not planning a scheme for people entering the workforce; this is a scheme for people approaching to retirement. The fact that freezing the limit helps older rather than younger people emphasises that point. Deferring it means that they have even less time to sort out their inadequate pensions.

Thirdly, I ask the Minister about the implications of the judgment in the Uber case, the key point in which was that these people are eligible workers and, hence, will be covered by the auto-enrolment requirement. Have the Government explored the implications of the judgment for pensions and, in particular, issues such as back claims for contributions that should have been paid and the fact that people in the area of employment covered by the Uber judgment have fluctuating earnings, almost by definition? Again, this has important implications for small pots and people moving in and out of the earnings limits. Have the Government considered the implications here?

[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

My Lords, I am not able to call the noble Lord, Lord Bhatia, because he was not on the call when the Minister made her opening speech.