Pensions

Guy Opperman Excerpts

Monday 1st March 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I beg to move,

That the draft Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2021, which was laid before this House on 20 January, be approved.

It is a great privilege to be here in the House to move the motion. This order reflects the conclusions of this year’s annual review of the automatic enrolment earnings threshold required by the Pensions Act 2008. This is the ninth annual review. The review considered the earnings trigger and the qualifying earnings band for the tax year 2021-22. The earnings trigger determines the point when a qualifying worker becomes eligible to be automatically enrolled into a qualifying workplace pension. The qualifying earnings band determines the earnings upon which workers and employers pay contributions into a workplace pension. This order sets a new upper limit for the qualifying earnings band and is effective from 6 April 2021. The lower earnings limit is not changed. Similarly, the earnings trigger is not changed.

The Government’s commitment to automatic enrolment was demonstrated through the support for the statutory minimum employer pension contributions originally included in the coronavirus job retention scheme. I thank everyone who continues to support automatic enrolment, whether that is the participating employers or, more particularly, the 10 million-plus employees who are saving 8% per annum. I can confirm that we will be pursuing the 2017 automatic enrolment review and bringing that in in the mid-2020s. The 2019 stats show the success that is automatic enrolment, with women in workplace pension participation now at 86%—that was 40% in 2012—and young people between 22 and 29 in workplace pension participation now at 86%; that was 35%. I commend the order to the House.

--- Later in debate ---

[Guy Opperman]

It is a great honour and privilege to respond to the debate. As always with pensions, while we are engaging in a debate on a specific topic colleagues across the House never miss the opportunity to raise all manner of issues on pensions, to which I have been asked to respond. I am delighted to do so.

No sooner has Her Majesty signed the Pension Schemes Act 2021 on the dotted line—we thank her tremendously for that, and I thank the House for its endorsement of that wonderful piece of legislation, which will make our pensions safer, better and greener—than colleagues are urging me to bring forth another pensions Bill to further transform the pensions landscape. I am sure that those on the Treasury Bench, and the Deputy Chief Whip and the pairing Whip, will have taken due attention of that when bids for future legislation are put in.

[Tom Hunt (Ipswich) (Con)]

In a very practical sense and meaningful way, how do these reforms make a real difference to my constituents in Ipswich?

[Guy Opperman]

My hon. Friend is a champion for his constituency and rightly raises the importance of what we are doing. I draw his attention to two key points: first, the Pension Schemes Act will make his constituents’ pensions safer, better and greener; and secondly, the automatic enrolment reforms that we have brought forward as a coalition Government and then a Conservative Government unquestionably support his constituents, who are saving in their thousands, to the tune of 8% per annum.

Of course, my hon. Friend will be aware that in 2012, approximately 35% of our young people were saving into a workplace pension, and now 86% in his community are doing so. Similarly, women, who were saving at 40%, are now saving, quite obviously, up at 86%, as I outlined earlier.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

Very quickly, I have a compliment and a question. The compliment is that, as an MP of 20 years’ standing, I know that pensions are one of the most difficult things that we get inquiries on from constituents, and the Minister, when he replies, has a knack for explaining these things in everyday English that is simple to understand. I thank him for that.

[Guy Opperman]

Stop there!

[Mr Francois]

My question is this. The very helpful notes that go with the instrument state:

“A full impact assessment has not been produced for this instrument.”

We were not expecting “War and Peace”. There will be a reason why the Government took that decision; perhaps the Minister will explain it to the House.

[Guy Opperman]

As always, I am grateful for my right hon. Friend’s intervention and support, and for his kind comments. I accept and take any praise that is due, and likewise hope that all Whips have taken due note of that.

[Mr Francois]

Stop there!

[Guy Opperman]

Indeed. The practical reality is that I will write to my right hon. Friend with more detail about the impact assessment, but clearly, this is an annual review that is done on an ongoing basis to ensure that the automatic enrolment regulations should be enforced in an appropriate way, and they should be reviewed and assessed in an appropriate way.

Some colleagues have raised matters of the Budget, and I leave that to my right hon. Friend the Chancellor. Similarly, the hon. Member for Strangford (Jim Shannon), whose comments we always appreciate—it is an honour to respond to the great man—asked for a specific assurance that the Government will continue to support employers. I can give him the profound assurance that my right hon. Friend the Chancellor on Wednesday will continue the massive support that this Government have made to employers on an ongoing basis. That will continue.

Clearly, we work on an ongoing basis to implement by the mid-2020s the automatic enrolment review; we continue to work forward on the pensions dashboard; section 125 of the Pension Schemes Act has made a significant difference on pension scams; and we continue to put climate change at the heart of pensions, which are now safer, better and greener under this Government.

Question put and agreed to.

Royal Assent

[Mr Deputy Speaker (Mr Nigel Evans)]

I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Acts:

Covert Human Intelligence Sources (Criminal Conduct) Act 2021

Ministerial and other Maternity Allowances Act 2021.

We will now suspend for a brief moment in order to sanitise both Dispatch Boxes.