DEFINITION OF THE TERM 'PRESCRIBED' (Hansard, 19 April 1985)

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

I have already made a number of fairly strong observations about the way in which the Bill is being handled by the Department and I need not repeat them now. We alluded several times in Committee to the complexity of the matters covered by the Bill and to the wide-ranging effects of many of the provisions in the Bill or clearly in prospect.

In this complex field, it would be quite wrong for the House to abdicate responsibility for supervising what the Department is doing, especially in relation to occupational pensions. I have campaigned for many years for reform of the law in this area, but the Department has not made any strong response to the arguments advanced by me and by others far better qualified to do so. That being so, I am not satisfied that the Department's intentions and the pace of reform are in line with public opinion. I therefore regret that throughout the Bill powers are taken to allow the Department to take charge of the legislation when, in practical terms, Parliament will have withdrawn from the scene.

The newspapers today confidently predict that the state earnings-related pensions scheme is to be abolished. I do not disagree with such a policy, but if the state scheme is abolished private sector schemes will bear the whole burden of earnings-related provision. In those circumstances, it is even more important that the law relating to such schemes should be thoroughly satisfactory. I do not believe that the law will be satisfactory unless Parliament—or at any rate those Members who are seriously interested in the subject, which may not be very many—has the opportunity to scrutinise and comment upon the Department's activities in this respect.

466 The present state of the law is most unsatisfactory. Many contributors pay good money in over a lifetime of work but get bad money out because of currency depreciation. Pension funds could protect contributors to a far greater extent, but they are not called upon to do so and the Department has shown itself to be quite satisfied with that very disappointing situation. In many cases, early leavers are obliged to sacrifice a large part of their entitlement because the rules of the scheme of their employer in the first instance have not been amended. The fact that early leavers do not get a fair deal under present legislation has been talked about for years, but nothing of substance has been done to put things right and the Bill only begins to deal with it with effect from the present year.

On the other hand, the people who remain in occupational schemes are obliged very often to participate in final salary schemes which have the effect of transferring resources from lower-paid to higher-paid members of the scheme. That is intrinsically wrong and should not be countenanced by Parliament. I appreciate that in many schemes, and in public sector schemes, the employer's contribution is so generous that the employees have no cause for complaint, whether the calculations are made on a final salary basis or on the personal build-up of entitlement; but in far too many schemes the low paid subsidise the higher paid, and that should not be allowed to continue.

If the Bill goes through as drafted, I am not confident that all the references it contains to the Department having power to take responsibility will lead to any significant improvement in the near future.

Our economy rests on the belief that saving is worthwhile. Parliament must not allow a general belief to grow up to the effect that there is no point in saving because one either loses one's resources through depreciation or people who are cleverer than oneself will use them to suit themselves and not give one a fair deal. It is quite wrong for Parliament to allow such an inadequate and unfair situation to continue.

I should not like it to be thought that I regard all occupational pension schemes as inadequate and unfair. Many employers make handsome contributions to their employees' retirement pensions. Nevertheless, a very large number of schemes are entirely inadequate and the rules protecting the rights of employees are utterly insufficient. Somebody must protest if Parliament is asked to hand over power to deal with that situation to a Department which lacks the drive and the energy to put matters right. Parliament must not leave such matters to the Department without having a proper opportunity to supervise and discuss what the Department has it in mind to do.

§ Mr. Newton

I hope that my hon. Friend the Member for Kensington (Sir B. Rhys Williams) will not take it amiss if I say that I am in some difficulty as to whether to reply to what the new clause says or to the rather broader thrust of his arguments about occupational pensions generally. I hope that you, Mr. Deputy Speaker, will forgive me if I comment briefly on the broader issue. I think that it is a little unfair to accuse the Department of being essentially inert and not to take account of the substantial changes that have taken place in occupational pensions legislation—not least those in the Bill—many 467 of which are in the direction urged by my hon. Friend for some time and reflect considerable credit on his effort and application in this area over many years.

It is not for me to predict in this debate, any more than in earlier debates, the outcome of the Government's current review of social security provision and financial provision for retirement generally, but my hon. Friend may rest assured that his views do not go unremarked in our consideration of these matters. I hope that he will understand if I cannot say much more about the general issues.

The new clause essentially concerns whether the regulations required to implement the proposals in the Bill —the primary legislation —should be subject to the affirmative rather than the negative resolution procedure. Knowing my hon. Friend's views on this and having listened carefully to him in Committee, I considered the possibilities open to us to move in that direction on Report, and it is with some reluctance that I find myself unable to move towards him—not because I believe that he has made an overwhelming case, but because my natural inclination is to try to please him, and indeed all hon. Members, if I possibly can. I regret, however, that in this instance I cannot do so.

I have before me several passages reproduced from the report of the Joint Committee on Delegated Legislation in the 1972–73 Session. I shall not weary the House by reading them out, unless I am pressed further, but those passages, with other precedents that I have examined, persuade me that we are acting entirely properly and in line with precedents over a long period in proposing that the regulations should be subject to the negative rather than to the affirmative procedure and that my hon. Friend the Member for Kensington is being somewhat unfair in suggesting that this in some way overrides the normal way in which the Government should deal with Parliament. Nevertheless, in acknowledgement of my hon. Friend's strength of feeling, I should like to tell him that, whenever I am able to meet him on this issue, I shall try to do so. I am afraid that I cannot do that today for a variety of reasons, most of which are practical.