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Lord McConnell: My Lords, on many occasions I have attacked the Government for their attitude towards terrorism and for not being enthusiastic enough in dealing with it. But on this occasion I support the order. It is perfectly right and proper that it should be brought before the House. It is, therefore, only right that I should stand up and say so.

This matter has taught us certain lessons about being more careful in the future, about not rushing legislation, and about examining it before it is presented to either House. But I need not rub that in. Those lessons have been learnt recently. I shall merely content myself by saying that I support the Minister in regard to this order.

Viscount Waverley: My Lords, I too support the order.

Lord Williams of Mostyn: My Lords, I want to make the timetable absolutely plain. I know that it is a relatively minor matter, but I do not want any misunderstanding.

The article appeared in the Criminal Law Week on 24th May. The Home Secretary was faxed the article on 26th May. We spent the time from 26th to 28th May preparing advice and questions for the Law Officers. So the advice from the Law Officers, in fairness to them, was asked for on 1st June. It arrived at the Home Office on 17th June. I should not like there to be any suggestion that the Law Officers were dilatory, because I do not believe that they were.

I am rather surprised that the noble Lord, Lord Thomas of Gresford, felt that he had been misled yesterday. I do not think anything could have been plainer. In repeating the Home Secretary's Statement, I made specific reference to the case of Kebilene and others. So far as I know, that has been reported and commented on in the newspapers. If the noble Lord missed it, then I am rather surprised; it has been reported and commented upon. The reason that it was mentioned in the Statement, I think rightly, was to point out that there was a judicial review and it was about the question of whether or not the Director of Public Prosecutions should continue to give his consent to the prosecution of offences under Sections 16A and 16B if they are incompatible with the terms of the European Convention on Human Rights. That is the point of Kebilene. The European convention has not been fully incorporated by the Human Rights Act, which will not come into effect until 2nd October next year. I believe that we did rightly

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in drawing your Lordships' attention to the case of Kebilene and the fact that the Appellate Committee was going to determine issues that were related, as the noble Lord, Lord Cope, said, not central to, the particular matter.

As the noble Lord, Lord Cope of Berkeley, indicated, and as your Lordships agreed, we all thought that the drafting of the continuation orders had had the legal effect of continuing Sections 16A, 16B, 16C and 16D as the basis for criminal offences. Because the drafting was in error, as I explained yesterday and was generally accepted, it turned out that Sections 16A, 16B, 16C and 16D were no longer of legal effect. Having taken advice on that--and one does not want to rush into matters of this potential importance--we brought the matter back to the House and explained the error that had been made; the Home Secretary said, "for which I take responsibility", and no one tries to derogate from that. I cannot imagine that anyone could conceivably have been misled who had put his or her mind to these matters.

There is nothing unconstitutional about what we are doing. I repeat, although I was reproved by the noble Lord, Lord Thomas of Gresford yesterday, that we believe that our stance on incompatibility and compatibility is the correct one. In due time, should the House of Lords Appellate Committee come to a different view, we shall have to review the position. But I stress that what the House of Lords is being asked to consider is the application for judicial review, which has already been heard at first instance in judicial review terms, as to whether the director should carry on giving his consent to the prosecution of offences if the offences are not compatible with the European convention. I see nothing unconstitutional in that. I believe that we were right to mention the case of Kebilene yesterday. If I had not mentioned it in repeating the Home Secretary's Statement, your Lordships could reasonably have felt a little aggrieved that we had not been as full and frank as possible. I put the matter yesterday on the basis that this is a related matter. The noble Lord, Lord Cope, was good enough to repeat it. I do not think that he ever said that it was peripheral, which was the word used by the noble Lord, Lord Thomas. I think he said that it was related but not central to this point. I commend the order to the House.

Lord Cope of Berkeley: My Lords, before the Minister sits down, is he aware that I myself saw both the law report and the newspaper report of this particular case at the time, although I am not as avid a reader of law reports as the Minister. It seems to me that if the Government had failed to bring the order before the House in these circumstances, they would have been prejudging, if not prejudicing, the case in the Appellate Committee. To me that would have seemed to be unconstitutional to a much greater degree than bringing the order before the House in the circumstances.

On Question, Motion agreed to.

Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn during pleasure until 8.15 p.m.

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Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.59 to 8.15 p.m.]

Welfare Reform and Pensions Bill

House again in Committee on Clause 1.

Lord Higgins moved Amendment No. 11:


Page 2, line 11, leave out from ("to") to ("and") in line 12 and insert ("a minimum contribution level of £10 per month,")

The noble Lord said: The purpose of Amendment No. 11 is to raise the issue of what contribution those subscribing to a stakeholder pension can make. The Committee will be aware of widespread comment in the press that the Government intend that it should be set at a minimum level of £10 per month; in other words, £120 per annum. This raises a number of questions on which it would be helpful to have the views of the Government. This matter is also related to the earlier debate about the costs that might be involved in the provision of stakeholder pensions. It also looks forward to later amendments related to the extent to which advice will be given by those who provide such stakeholder pensions.

One must express hesitation about the figure of £10 which appears in the amendment in the light of press comments on the position of the Government. At £120 per year, for someone who provides a stakeholder pension of 1 per cent--we discussed this matter just before the adjournment--the cost allowed would be only £1.20. If one is a minimum contributor it seems unlikely that one will get very much for the sum of £1.20.

At the other end, the question arises: what kind of pension will one get for a minimum contribution of £10 per month? In that context, one raises yet again the issue of whether the pension that one gets is likely to be sufficient to provide a pension in excess of the minimum guaranteed pension proposed by the Government, which one understands is to be index-linked. Clearly, if an individual did not reach that level with the subscription just mentioned it would be money--I was going to say--down the drain. Without using Mr Frank Field's exotic expression, that would be roughly where it would go.

Of course, the Minister may well argue that one is unlikely to be making the minimum contribution throughout one's working life and that the expectation is that people will probably contribute significantly more. Even so, if the amount contributed is significantly higher, calculations suggest that even, say, for someone aged 21 on an income of £12,000 a year, with the salary rising by 2 per cent over inflation and a contribution of 10 per cent of earnings to the scheme, the total contributions will be only some £85,000. That would produce an estimated income in retirement at today's purchasing power of about £11,700, plus what is left, if anything, of a basic state pension. That would presumably be scarcely seen as a reasonable return on the investment made over one's life.

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I am sure the Minister has alternative figures which we can consider. But certainly the minimum contribution level and indeed the level of contributions which may be expected by people above that level raise serious questions as to whether encouraging low-earners to go into this scheme will be a worthwhile investment. I should be grateful if the Minister could comment.

Baroness Hollis of Heigham: The amendment would put on the face of the Bill details of the minimum contributions that schemes can require stakeholder pension scheme members to make. We expect to set out these details in regulations. I am sure that the noble Lord will agree that the matter is much better handled in that way. I could explain the purpose in one phrase: this is meant to be a ticking-over contribution. Perhaps I may enlarge on that point.

Subsection (7) provides that schemes must allow members to make contributions as they think appropriate. This means that members will be able to contribute such sums as they wish, either on a regular basis or as and when they can. The subsection also provides a regulation-making power to prescribe minimum contribution levels and other restrictions on the making of contributions.

The Green Paper made clear our intention that schemes which require minimum contributions should not be able to set them above a specified amount. Our recent consultation document proposed that no scheme should be able to require a minimum contribution of more than £10. This low limit will ensure that people who can afford only modest contributions are not ruled out from joining a stakeholder pension scheme. I am pleased that the noble Lord's view of an appropriate minimum level is consistent with ours.

We have also proposed in our consultation document that there should be no requirement for contributions to be made at a specified frequency--for example, once a month, as suggested by the amendment. One of the key flexibilities that we want to introduce into stakeholder pensions is the freedom for individuals to make contributions as often as they wish--that is, by regular payments or by a one-off payment. We want them to be flexible enough to adapt to circumstances.

For example, regular and monthly contributions may be the most appropriate arrangement for those in work. However, they may lose their job and be unemployed for a time. If that happens, we want them to be able to continue to make modest contributions--perhaps £10 or £20--as and when they can afford to while they are looking for work. Likewise, we want to make sure that people who take a career break to raise a family--they may take three or four years out while they have a couple of children--can continue to make one-off contributions from time to time, possibly from freelance earnings or in some other way; we want them to be able to make a modest contribution while they are out of the labour market. And we want to cater for people who may wish to make irregular lump sum payments--for example, if they should inherit money or if they wish to make a contribution from their savings.

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In the consultation document we have invited views on the compatibility of the minimum contribution rule with the variety of ways in which schemes may collect contributions. I could discuss that if necessary, but essentially I entirely agree with the noble Lord that a £10 a month regular minimum contribution over many years will not produce a faintly satisfactory pension. But the point is that the provision allows a welcome flexibility for exactly those people that the stakeholder pension is designed to cater for: those who may be in and out of work, those who may temporarily drop out of work, those who may have temporary childcare responsibilities and the like. They can then have the option of making good that low level of contribution in their later contributions.

As I said originally, it is a sort of ticking-over contribution which we think offers much needed flexibility so that we keep people within the pensions system rather than have them drop out altogether. I hope that in the light of that explanation the noble Lord will withdraw the amendment.


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