Lord Davidson of Glen Clova
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Public Service Pensions Bill
Lord Davidson of Glen Clova Excerpts(11 years, 10 months ago)
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“(1) The Treasury shall make directions requiring the scheme manager or responsible authority of a scheme under section 1 to publish scheme information.
(1A) The Treasury may make directions requiring the scheme manager or responsible authority of a scheme under section 1 to provide scheme information to the Treasury.”
Lord Davidson of Glen Clova
My Lords, this amendment makes it a requirement for the Treasury to make directions for the publication of scheme data. It retains the permissive nature for Treasury directions in respect of data that are for the Treasury’s own use.
In his report, my noble friend Lord Hutton condemned the data presently available for public sector pension schemes. His report stated that,
“the Commission has concluded that at present the availability of such data is at best patchy: some key data is not available, at least not publicly. This needs to be improved”.
My noble friend Lord Hutton stressed the need to improve the quality and accessibility of scheme data so that comparison can be made between schemes and individual administrators. With better data, comparison could be made in respect of administration costs, membership profiles and, for the 89 funded local government pension scheme funds that manage more than £150 billion worth of assets, with a return on investments, which noble Lords will doubtless consider rather important.
Comparison, as in many areas, allows good practice and permits weak performance to be identified. Once identified, rectification may then be put in place in relation to that performance. It also enables good practice to be distributed throughout the various funds. In terms of accessibility, my noble friend Lord Hutton recommended that data be published as far as possible to common standards and methodologies and collated centrally. Currently, there is no central, publicly available depository of information.
Clause 13(1) of the Bill is permissive and thus fails to ensure that the Government will implement any changes to the current system for collating public service pension scheme data. Given the importance of full and reliable data in assessing the performance of public sector pension funds, that is not a desirable position.
Amendment 74 would replace the permissive language of “information may relate” with the compulsory language of “information shall include”. Over the decades, the argument about “may”, “maybe”, “must” and so on in context has been a fruitful source of income for many lawyers, and I declare my interest as a lawyer. However, in trying to get clarity in this important area, I suggest that the option that means either you do it or do not do it should be replaced with a mandatory position. The permissive nature of the language is not adequate in this area. My noble friend Lord Hutton in his report was very clear that current pension scheme data were not adequate—in his words, “at best patchy”—and some key data were not publicly available.
The report stresses that data should enable the assessment and scrutiny of performance, viability and key facts associated with the different schemes. This cannot be done unless the data are placed in the public domain. I suggest that the Bill should ensure that key data are published and not merely list types of data that the Treasury “may” include should it decide to make directions under Clause 31.
The Minister has frequently referred to flexibility and in many areas that is very useful, but in certain other areas such as this it can be termed, in my noble friend Lord Hutton’s phrase, patchy, which is undesirable in this area. The amendment does not set out to establish every detail of the information to be published but to provide a framework for information requirements.
In Amendment 75 there is an effort to specify that scheme information should include full valuation reports. Again, my noble friend Lord Hutton’s report specifically stated that full valuation reports should be published by our public service pension schemes, yet they are not mentioned in the types of scheme information in Clause 13(3). Without the publication of full valuation reports, comparison between schemes, as noble Lords will immediately appreciate, becomes very difficult. Proposed new subsection (3A) would allow the Treasury to require scheme information to be published to common standards to make it easier to collate. That in turn would help better comparisons between schemes. This is a permissive amendment.
Amendment 76 would require the Office for Budget Responsibility to report at regular intervals on the long-term impact of public service pension schemes. As my noble friend Lord Hutton stressed, there is a need for fiscal policy to take account of the sustainability of public service pension schemes. In that regard, I assume that the view is entirely common. For fiscal policy to be properly informed in relation to the cost of future and past pension promises, there needs to be accurate and independent analysis of the long-term impact of public sector pension schemes on public finances. That is why my noble friend Lord Hutton recommended that the Office for Budget Responsibility should provide a regular published analysis of the long-term fiscal impact of the main public service pension schemes, including the Local Government Pension Scheme. This amendment would ensure that fiscal policy is better informed, and that policymakers and the public are more regularly and reliably informed about the cost of public service pension schemes. Again, one assumes that that is a common objective on all sides of the House.
The Minister in another place said that the amendment was unnecessary, given that the Office for Budget Responsibility already has a responsibility to examine and report on the sustainability of public finances. From this side we suggest that this amendment be accepted, because it facilitates the understanding of the various trends and developments that may take place within the economy that have an impact on fiscal policy, which in turn can have an impact on pension matters. I beg to move.
Lord Newby
My Lords, as the noble and learned Lord, Lord Davidson of Glen Clova, has said, in his final report the noble Lord, Lord Hutton, set out the need for improved transparency of information concerning the public service pension schemes. His report highlighted the range of information that is currently published, including data published by the Office for National Statistics, the OBR, the Treasury and the schemes themselves. However, as he explained, despite this range of data there is no centrally collated information that allows the total impact of the schemes to be readily assessed. Also, differences in the presentation and underlying methodologies and assumptions hamper comparisons between the schemes and, for local government, the funds within them.
Amendments 73 to 75 seek to ensure that Treasury directions require scheme information to be published and specify what that information must include. This is distinct from the current permissive drafting of Clause 13. Greater transparency is absolutely essential if we are to invite analysis and debate on the performance of the schemes. I can reassure the noble and learned Lord that we are committed to improving the information that is made available. It is our intention to use a central direction to ensure that such publications are helpful and consistent across the schemes, and to set out what information will be available—which I think goes a long way towards what the noble and learned Lord is seeking to achieve.
Amendment 74 seeks to require that all information set out in Clause 13(3) is published. However, that list is not intended to be a fixed or exhaustive list of the matters that schemes will be required to publish. Rather, it is intended to set out the core areas of scheme information that the detailed requirements will be built around. The list provides a starting point. The Government are committed to greater transparency, but it is fair to say that there is more work to be done to identify what information should be published, what common methodologies and assumptions should underpin it, and how best to collate or co-ordinate its publication. Once we are doing it on a more systematic basis, we will also want to change or amend the information that is published in the light of comments that are made. I do not necessarily think that even the Treasury will get it absolutely right first time so it would not be helpful to determine a mandatory list now, when information requirements will undoubtedly change as a result of comments made on our first attempts, and over time.
I hope that I can assure the noble and learned Lord that Amendment 75 is not necessary. Clause 13 already allows for Treasury directions to require information to be provided in a particular format. That is the key. Further, Clause 13(3) is not exhaustive, and already allows for schemes to be required to provide or publish full scheme valuation reports.
Finally, I turn to Amendment 76. The OBR already includes the impact of public service pensions in its spring and autumn Economic and Fiscal Outlook reports and in its July Fiscal Sustainability Report. The OBR’s role is established by the Budget Responsibility and National Audit Act 2011. Section 4 of that Act places a duty on the OBR to consider and report on the fiscal sustainability of the public finances, of which the public service pension schemes clearly form a significant part. As we discussed on an earlier amendment, the OBR has already started doing this. The report it produced at the time of the Pre-Budget Report in December does exactly, I think, what the noble and learned Lord is seeking to achieve. The OBR clearly intends to carry on doing that, so that amendment is not necessary either. I urge the noble and learned Lord to withdraw this amendment.
Lord Davidson of Glen Clova
I am grateful to the Minister for his clarification on a broad number of areas. One is gratified to discover that we are ad idem in terms of our objectives. I will consider what has been said by the noble Lord and I congratulate him, again, on the openness of Her Majesty’s Treasury to change, which is always useful. I will reflect on what has been said and will seek to withdraw this amendment.
“Review of standards of administration
(1) Within six months of the day on which this Act is passed, the Treasury shall commission an independent review into the standards of administration in public service pension schemes and how those standards could be improved.
(2) The Treasury shall lay before Parliament the report produced by the review as soon as reasonably practical after the report has been published.”
Lord Davidson of Glen Clova
This amendment would require Her Majesty’s Treasury to commission an independent review into the standards of administration in public service pension schemes. I refer again to my noble friend Lord Hutton’s report, recommendation 22 of which expresses the desire that:
“Government should set what good standards of administration should consist of in the public service pension schemes based on independent expert advice. The Pensions Regulator might have a role, building on its objective to promote good administration. A benchmarking exercise should then be conducted across all the schemes to assist in the raising of standards where appropriate”.
The proposed new clause implements this recommendation by ensuring that the Government will receive independent advice on how standards of administration can be improved in public sector schemes. It also ensures that independent review will be publicly accessible, so that its implementation may be scrutinised and the recommendations easily accessed and implemented by schemes that wish to do so.
The Bill makes provision for the regulator to issue codes of practice at paragraph 14 of Schedule 4, but we say that this provision does not require the regulator or another independent expert to carry out, first, a review and then set out clear principles regarding good administration in public sector pension schemes. Were that to be done, it would, of course, enable these codes to be informed. An independent review would identify areas for improvement in the inevitable drive for better administration. As well as identifying best practice, it could inform future codes of practice and look at the possibility of streamlining and combining the administrative functions of schemes. In his report, my noble friend Lord Hutton observed that the commission,
“received suggestions and evidence from a number of commentators that public service pension schemes offer scope for streamlining and combining of their administrative functions”.
It is suggested that via this amendment one could examine ways in which the Local Government Pension Scheme in particular might benefit from economies of scale. It follows, therefore, that there is potential for sharing administrative costs and services, and creating broad contracts. I beg to move.
Lord Newby
My Lords, we have already taken steps in the Bill to ensure the effective and efficient administration of public service pension schemes. Until now, the schemes have been exempt from much of the legislation that applies to the governance and administration of other occupational pension schemes, but through Schedule 4 we are significantly extending the administration requirements on public service pension schemes. I would not necessarily commend Schedule 4 as it is extremely detailed, but to this extent I would do so because it sets out how we are changing the current arrangements by extending the administration requirements.
The schedule also extends the role of the independent Pensions Regulator in regulating the governance and administration of public service schemes, bringing it into line with the regulator’s role in regulating all other occupational pension schemes. As the noble and learned Lord has pointed out, the regulator will issue codes of practice relating to the responsibilities of public service schemes and be able to enforce compliance where schemes do not meet the requirements of the legislation. We are also taking steps to improve the transparency of the schemes and their governance by introducing pension boards, as we have discussed, as well as scheme advisory boards. Taken together, our changes will deliver the commitment to establish and monitor standards of administration in the public schemes.
The burden of the noble and learned Lord’s amendment is that before the codes can be introduced you need to have a review, and indeed he talked about an independent review. We think that we have dealt with the point about independence by the fact that the regulator is independent. Further, you cannot produce codes without reviewing what is already there. You do not simply sit down with a blank sheet of paper and not look at what already exists in terms of best practice elsewhere in the industry. Our expectation is that the Pensions Regulator will of necessity have to review existing best practice before it can produce its own codes. For those reasons, we think that the amendment is unnecessary. We think that we are going to do what the noble and learned Lord is seeking to achieve, but we do not need a belt-and-braces approach in the form of further cover in the Bill to ensure that it actually happens.
Lord Davidson of Glen Clova
Again, I am obliged to the Minister for his clarification. However, if this side has a prejudice it is that it is always better to be better informed. I will reflect on the Minister’s words to see whether what he has said matches our common objective. Once again, I respectfully seek leave to withdraw the amendment.
Lord Davidson of Glen Clova
This amendment would provide that the regulator must issue codes of practice by changing the permissive expression “may”. As I said earlier, when one comes across this language, one is always presented with an option either to do it or not, and plainly in this context it is not an enabling use of the word “may”. It does not suggest “shall”, so we suggest in this amendment that “shall” would be the better way of proceeding. That is because the desirability of codes of practice must be common, given what the Minister has already said.
As it stands, Schedule 4 allows but does not require the Pensions Regulator to issue codes of practice for public service pension schemes. Under the schedule, these codes of practice would include guidance in relation to the exercise of functions and standards of conduct and practice. Plainly, the intention of these codes is to bring about high standards of scheme governance and administration. We say that there should be a clear requirement that the codes are produced by the Pensions Regulator rather than leaving this as a potentially permissive provision. I believe that the Minister in another place said that this amendment was not necessary, but we take the opposite view in that it introduces a compulsitor on the regulator to make these codes of practice clear to all.
I should say immediately that there are many aspects of Schedule 4 that this side welcomes, specifically the requirement in paragraph 19 that pension board members must have appropriate knowledge and understanding to enable them properly to exercise their functions, and the requirement for public service schemes to establish internal controls, as set out in paragraph 21. However, we are concerned that the regulator is not obliged by this Bill to produce codes of practice for public service schemes. I beg to move.
Lord Newby
My Lords, it would be an interesting little exercise to look at how many hours of your Lordships’ time is spent debating across the Floor of the House whether to use “may” or “shall”, and vice versa. In my view, they are certainly too many.
As we have just debated, Schedule 4 sets out the new role for the Pensions Regulator in providing regulatory oversight of the administration and governance of public service schemes. A key part of that new role is to issue codes of practice. These codes set out in more detail the legal requirements on schemes and how to fulfil them. The regulator already issues codes of practice for private sector schemes and the drafting in this Bill closely mirrors the drafting in the Pensions Act 2004. These amendments would turn the overarching power for the regulator to issue codes of practice into a duty.
Proposed new Section 90A(2), set out in paragraph 14 of Schedule 4, already imposes a duty on the regulator to issue codes of practice in relation to the 11 matters listed in that provision. This sits under the broader power in proposed new Section 90A(1) to issue codes of practice in relation to the exercise of functions under pensions legislation and the standards of conduct of those exercising these functions. The result is that as currently drafted, the regulator will already be under an obligation to issue codes in relation to certain areas of pensions legislation. The power in new Section 90A(1) allows the regulator to issue codes on other areas in addition to those already required by new Section 90A(2).
New Section 90A(2)(j) provides, as does existing Section 90 of the Pensions Act 2004 on which this provision is based, for the Secretary of State for Work and Pensions to add to the list of matters in relation to which codes of practice must be issued. I can therefore assure noble Lords that the regulator will be obliged to issue codes of practice for the public service schemes. These are a key part of implementing the independent oversight and regulation of public service schemes, as recommended by the noble Lord, Lord Hutton.
Amendment 91 in this group relates to codes of practice in Northern Ireland. However, those provisions are all proposed for deletion by Amendment 90, which has already been debated. However, on the main point, I hope that with the reassurances I have given, the noble and learned Lord will feel able to withdraw the amendment.
Lord Davidson of Glen Clova
If the Minister is surprised at the amount of time spent by this Chamber in debate on the potential differences between “may” and “shall”, perhaps he should reflect on the decades that are spent in court having to consider and implement what this House and the other place have actually traduced. I am endeavouring to reduce by a few decades debate in the pensions area on the use of “must” or “shall” instead of “may”.
It is clear that the Government accept that there is a duty for the codes of practice and we welcome that. The difference between us is how far these codes of practice must go. The Minister takes the private sector as the comparator. Sometimes it might be an idea for the public sector to aspire to a slightly higher standard. However, given that no doubt difficult proposition for the coalition Government, I beg leave to withdraw this amendment.
“(1) New scheme regulations made under sections 1 and 3 shall replace existing schemes’ current regulations and shall take effect on the amendment date.
(1A) Following the implementation of new scheme regulations under subsection (1), benefits shall only be provided in accordance with those new regulations.”
Lord Davidson of Glen Clova
Amendment 91A and the other amendments in the group are designed to address the concerns with Clause 16, in particular relating to the Local Government Pension Scheme, as it allows for the closure of each of the 89 funds that make up the LGPS.
Our concern is that allowing closure could have a number of unintended consequences. It was mentioned in Committee that local government schemes are exempt from Section 75 of the Pensions Act 1995, so “closure” would therefore not trigger debts under that section. But that is by no means the only risk of the use of the operative word, “closure”.
There are thousands of employers in local government pension funds, each of which has individual admission agreements governing the terms of the employer’s participation in the fund. Those agreements are not necessarily in standard form, meaning that there are potentially thousands of different admission contracts. It is likely that at least some of these agreements will set out various powers for the local authority in the event of closure, including the power to collect a debt from the employer equal to its share of the scheme’s deficit. This could put a massive strain on participating employers and has the potential to put some of them out of business.
The Minister in the other place assured the House that the Government will not close the Local Government Pension Schemes but, respectfully, this misses the point that the Bill allows local authorities to close their funds and the Government cannot prevent them doing so. For their own reasons, local authorities may wish to close schemes in order to crystallise debts from certain employers. The Government have insisted that the word “closure” be used in Clause 16 but this does not in fact mean closure. We suggest that this might be approached differently, to avoid this explanation.
Closing a pension fund means that there are no longer any active members in the scheme but that the scheme continues. However, the Government insist that in the context of Clause 16, “close” does not mean “close”. Rather, it means that no benefits will be provided under the scheme. That is what I understand the position to be.
As Clause 16 is currently drafted, the word “closure” is not given the different meaning that the Government contend. Clause 16(1) provides that,
“no benefits are to be provided under an existing scheme ... after the closing date”.
That is not sufficient to change the word “closure” from its accepted meaning in pensions law.
If the Government want the word “closure” to have this different meaning, they should explicitly define this in the Bill. These amendments would ensure that schemes do not close but that they are amended. It is suggested that “amendment” is by far a better way of proceeding than continuing with the word “closure”. These amendments are designed to achieve the Government’s desired aims, which we share, but prevent what we suspect would be the unintended consequences that could arise if the Bill continues to allow “closure”.
Amendment 91D is new and provides that the closing date for a Scottish scheme is 1 April 2016. This is to address the fact that administration of the scheme in Scotland is more complex and that more time will be needed. The Bill requires that existing schemes are closed on 5 April 2015. This means that Scottish local government pension schemes have to be renegotiated and scheme regulations drafted. There has to be consultation, approval by the Scottish Parliament and then administrative implementation. This may be achievable in England, because negotiations over the schemes have been concluded and significant work has been undertaken on scheme regulations, as we have already heard. Sadly, this is not the case in Scotland as until this Bill there was no necessity to do so.
A new Scottish Local Government Pension Scheme was implemented as recently as April 2009. The focus was to implement the cost sharing and other provisions of that new scheme. This Bill imposes the principle of the English-negotiated solutions, which were not sought in Scotland.
Two years may seem enough time for the Scots to sort themselves out, but the reality is somewhat different. If one works back from April 2015, the timetable is as follows. At least a full year is required to implement the scheme administratively, which includes software changes; that, I gather, is a minimum period. At least a further year is required to undertake the legal process, including the drafting of regulations, public consultation, ministerial approval and the laying of regulations in the Scottish Parliament. This is based on Civil Service estimates, approved by a Scottish Minister. It is not simply a construct by this side of the House.
That timeframe leaves about two months for initial union consultation with members, negotiation with stakeholders, and then consultation with members and other stakeholders—councils, admitted bodies and so on—about heads of agreement. Pension negotiations, as the Minister will immediately accept, are complex and require extensive data that take a long time to produce. Agreements also require an equality impact assessment, which takes time too.
This timetable assumes that stages progress smoothly, with no significant difficulties. However, as in England, not everything in Scotland necessarily proceeds smoothly—in fact, in Scotland it is possibly less so. Making changes to the Scottish Local Government Pension Scheme is significantly different to doing the same to the English scheme. So far it has taken about a year for the Scottish scheme to catch up with its English counterpart. The last major change in England was in 2008 and 2009 in Scotland. An amendment that delayed implementation in Scotland until 5 April 2016 would therefore have the support of the trade unions, of the Scottish local authority body, COSLA, and of Scottish Ministers. I beg to move.
Lord Newby
My Lords, before I turn to these amendments I would like to notify the Committee of a development with regard to certain Scottish pension schemes.
The regulations made for local government, police or firefighters’ pension schemes in Scotland must follow the framework set by this Bill. However, Clause 3 does not require the Treasury to consent to them before they are made. This reflects existing devolution arrangements. The Chief Secretary sought to agree a mechanism to ensure that both Governments were kept appropriately informed of any changes to these regulations, or factors affecting them with the Scottish Government. This would have operated via a non-binding memorandum of understanding.
However the Scottish Government have now informed the Treasury that they do not consider there to be a need for such a memorandum. I can assure noble Lords that these schemes will not operate in a vacuum. Existing agreements will continue to apply to these schemes, and we will continue to support the Scottish Government in making these regulations fair and sustainable.
Lord Davidson of Glen Clova
Will the Minister briefly elucidate the reasons that the Scottish Government have given for why they do not consider that consent is required? If the Minister cannot do that immediately, I would be happy for him to write to me.
Lord Newby
I think I will have to write to the noble and learned Lord. I am very happy to do so.
I shall return to the amendments and start with Amendment 91D regarding the Scottish scheme. I heard what the noble and learned Lord said about the Scottish Government being unable to implement the reformed schemes in the 27 months available, but the Scottish Government have at no stage asked a Minister for a delay to the implementation of the schemes, and we think there are very good reasons for avoiding a delay.
A delay in implementing the reforms would, for example, result in hundreds of millions of pounds of additional liabilities being accrued in the Scottish schemes. These additional costs would have to be met from the Scottish budget at the expense of Scottish jobs and services. Furthermore, a delay would disadvantage Scottish public service workers on lower and middle incomes by prolonging the period that they will continue to subsidise the pensions of high flyers. I am sure that the noble and learned Lord does not think that that is desirable. The only thing I would say by way of general comment is that it has been clear since the point at which this legislation was introduced that it would apply to Scotland and how it would apply to Scotland. My right honourable friend the Chief Secretary has written repeatedly to the Scottish Government about what is going on in England and how we are making progress, and therefore there is no objective reason why the Scottish Government should not be absolutely marching in lockstep with the Government in London in terms of producing the scheme rules. We think that the time has come for the Scottish Government to get their skates on, and we do not believe that there should be a delay in Scotland for the reasons that I have given.
Lord Newby
I am afraid I cannot because it is not the responsibility of the London Government. We do not seek to micromanage what is happening in Scotland or to follow every minute of what the Scottish Government are doing in relation to these things, not least because if we did, we would be excoriated by the Scottish Government for interfering in Scottish affairs. These are Scottish affairs and I am afraid we cannot second-guess every bit of discussion that is going on in Scotland. It would make us extremely unpopular for no benefit because we are not responsible for the way those scheme negotiations are progressed.
I shall move to Amendments 92A and 93A. Concerns were raised in another place about the closing dates as originally drafted. Although I am confident that the dates as drafted would have worked as intended, to address the concerns echoed here, and following discussions with each of the schemes about their planned timetable for reform, the Government have tabled Amendments 92 and 93 to revise the closing dates. I hope that noble Lords feel that their concerns have therefore been addressed.
On Amendments 91A, 91C and 93B to 93G, I shall attempt to address noble Lords’ concerns relating to the extent and effect of the closure of the existing schemes. Taken together, these amendments seek to provide for the replacement of the existing regulations in order to make these reforms. This would mean that the new scheme regulations made under Clause 1 would have to provide for both accrued rights prior to reform and new service after reform with different rules pertaining to each. That would be unnecessarily complex and inefficient.
The Bill already enables new and existing arrangements for each workforce to be managed and administered together by virtue of Clauses 4 and 5. The new and existing schemes will have the same scheme manager and the same pension board. From the perspective of a scheme member, their existing and new pension benefits and the administration of their pensions will be seamless. I hope I can also reassure noble Lords that there is no need to place in the Bill any requirement to legislate for the new schemes. The Government have made a number of commitments in this House, in another place and elsewhere to enact the schemes in accordance with the relevant heads of agreement.
I realise that a number of concerns have been raised in another place about the use of the phrase “closing date”. We have given lengthy reassurances that these words have only the meaning that can be attributed to them in the context of the clause; that is, that they close the schemes to future accrual only. This was the subject of the correspondence between the Economic Secretary, the shadow Financial Secretary and the chair of the Local Government Association which I circulated to noble Lords a couple of weeks ago in which we sought to minimise confusion about the use of the word “close”. Government Amendments 111 to 114, to which we will come later, have been drafted to achieve that. I hope that noble Lords can now put their minds at rest on the subject.
We have been clear that our intention is to simplify and consolidate the existing legislation relating to the provision of pensions to public servants. In future, public service pension schemes will be made under the powers in the Bill. These amendments, as drafted, would not allow for such consolidation. Although I know what the noble and learned Lord was seeking to achieve, I hope he will understand why I cannot accept his amendments.
Lord Davidson of Glen Clova
I am obliged to the Minister. I remind him that when I referred to Scotland, I said that things do not always seem to move smoothly there. There certainly seems to be a different understanding on this side about what Scottish Ministers, who I take to be the Scottish Government, have expressed by way of a view in relation to timing. As I said, things do not always move smoothly north of the border.
If my learned friend the Minister—he may be learned for all I know and may be my friend—wishes to avoid unpopularity in Scotland, perhaps I may suggest that he refrains from suggesting that the Scottish Government move in lock step with the UK Government and that they get their skates on. In any event, I hear what he says, and we will perhaps return to this in due course when we are both better informed.
In relation to closure, the Minister described possible confusion between the Economic Secretary and his shadow. It may be that this is in effect a difference of approach. I suspect that we will return to this on Report, but at this stage I beg leave to withdraw the amendment.
Lord Newby
My Lords, Clause 16 provides that no person may accrue further benefits in the existing pension schemes after a given date. However, while this is referred to as “the closing date”, it is important to note that this does not mean that these schemes will be closed or wound up on that date. They will continue to exist to pay the benefits accrued up until the closing date, and beyond that date for those who are eligible for transitional provisions.
Although the closing dates as originally drafted would have worked as intended, they were a cause of concern in another place. To address these concerns, and following discussions with each of the schemes about their planned timetable for reform, Amendments 92 and 93 will revise the closing dates. Therefore, for local government workers in England and Wales, the closing date is 31 March 2014, and for all other schemes the closing date is 31 March 2015.
Amendments 111 to 114 are designed to minimise the potential for misinterpretation regarding how the Bill will affect the current schemes. Perhaps I may reiterate what was made clear in another place. There will be no subsequent crystallisation of liabilities when the Bill closes the current schemes to future accruals. To provide further clarity on this point, these amendments will remove references to schemes that are closed and instead signpost to the clauses that restrict the build-up of future accruals in the schemes. I beg to move.
Lord Davidson of Glen Clova
There was initially a spark of hope that these amendments might have addressed the question of closure. That spark has died. However, I hear what has been said. I will confine myself to saying that we may return to this matter on Report.