asked Her Majesty’s Government:

What is their assessment of the incoming Government of Zimbabwe.

My Lords, it is clear to the world that the so-called election last Friday was a complete sham and that, as African observers have already said, it did not reflect the will of the people. It is not surprising that Morgan Tsvangirai and the MDC felt that they had to withdraw, given the horrendous levels of violence and intimidation. We will continue to press for a resolution that reflects the political choice of the people as they voted on 29 March.

My Lords, there are so many threads in this picture that it is difficult to know which ones to pick up but I shall briefly mention three. The first is that support is flowing away from Mugabe. He has been criticised by Mandela, two archbishops, the Secretary-General of the Security Council, the G8, the EU, SADC observers, which is significant, and the African Union, which is also significant. Therefore, it is a case of Mugabe against the world. The second is the position of Mugabe’s military, which played a very big role in the terror over the past weeks in return for Mugabe giving up his idea of retiring. Finally—

Question!

My Lords, does the noble Lord agree that it is important that we should not play too big a role in this scene and that it is for the Africans to deal with?

My Lords, I agree with everything that the noble Lord said. We should not play too big a role, and it is important that the Security Council, the African Union and SADC work together on this. However, we do have a role and a strong view on this, and anything that we can do to help to resolve this outrageous position, we will do.

My Lords, in the light of the fact that the second presidential election in Zimbabwe was held beyond the 21-day limit legislated for in the constitution and that it appears that the MDC and its allies have an overall majority of about nine in the Zimbabwean Parliament, is there any possibility of the Parliament being able to exercise any practical pressure on Mugabe and his henchmen, who usurp power in that country?

My Lords, the noble Lord’s points are good ones. There is no doubt that in the legitimate elections held in March the MDC won a majority in Parliament and the opposition candidate for president certainly got more votes than President Mugabe. I pay tribute to the bravery shown by MDC opposition politicians over a long period and to those who voted for them last week. Whether the politicians who make up a majority in the Parliament will feel able to take a stand is very much a matter for them, but we need to understand the appalling situation that exists in that country in terms of the number of people who have already died and the violence and threats that made up the election that was supposed to take place last Friday.

My Lords, in view of the point made in the previous question that the run-off election was outside the due time under the Zimbabwean constitution and that in the legitimate elections Mugabe was beaten both in the presidential election and in the parliamentary election, why do the Government not just simply withdraw recognition of the regime?

My Lords, it is extremely tempting to do so, but we have to think very carefully whether that is sensible at this time. All options are possible. We recognise states, not governments, and Mugabe is not a legitimate president. However, 14,000 or so British citizens live in Zimbabwe. At present, we believe that it would be wrong not to have some representation for those people, especially given the very difficult circumstances that I have tried to outline.

My Lords, are we ready to tighten the screws on the ZANU-PF elite, for example, by halting the three-times a week flights by Air Zimbabwe from Zimbabwe into Gatwick and by persuading the Germans to halt the printing of bank notes, which have fuelled the 9 million per cent inflation? As it will be impossible to send Zimbabwean asylum seekers back there in the near future, will the noble Lord answer the question which has been put to him by my noble friend Lady Williams about allowing Zimbabwean refugees in this country to work, particularly in activities that will contribute to the rebuilding of their country when they are able to go home?

My Lords, on asylum, I make it clear that we have no current plans to enforce returns to Zimbabwe and will not do so until the current political situation is resolved. On the work position, as my noble friend Lord Malloch-Brown, who, as we speak, is at the AU meeting in Sharm el-Sheikh, said last week:

“We are looking at the support that we may need to give Zimbabweans in this country, particularly at the ban on refugees taking up work”.—[Official Report, 23/6/08; col. 1258.]

My Lords—

My Lords—

My Lords, it is the turn of the Labour Benches.

My Lords, I declare an interest as a member of the England and Wales Cricket Board. I welcome the decision to stop Zimbabwe’s cricket team playing bilateral matches with England. Are there any plans to stop the Zimbabwean cricket team visiting England for the Twenty20 World Cup next year? If not, what will the position be if England meets Zimbabwe in the finals?

My Lords, there are no sporting sanctions as such on Zimbabwe. However, international sport should never be a way for dictators to publicise their misrule. As my noble friend says—I am grateful for his comments—we have made it clear that we do not want the bilateral tour to go ahead and that we will do all in our power to prevent it from going ahead. We have also—I hope this answers the question—asked the ECB to represent to the International Cricket Council our serious concerns about the situation in Zimbabwe and ask the ICC to reconsider its inclusion in the Twenty20 World Cup.

My Lords, can the Minister please elaborate on what measures can be taken to allow duly elected MDC Members of Parliament to take their seats?

My Lords, I wish I could. Given the state of government in Zimbabwe at present, anything I said on that would have every prospect of not being accurate. One hopes that those properly elected Members of Parliament will be allowed to take their seats and to exercise their powers in the proper way. We hope for so much for that country, and so far we have seen so little.

My Lords—

My Lords, we are in the ninth minute. The noble Lord must sit down.

asked Her Majesty’s Government:

How many dedicated Section 136 suites in mental health trusts have been opened in England and Wales.

My Lords, we have good reason to believe that the extra resources that have been made available for investment in adult mental health services are being used to develop a growing number of dedicated Section 136 facilities. However, the Government do not hold information centrally for the total number of such facilities.

My Lords, I thank the noble Baroness for that reply. In Nottingham, all detained under Section 136 of the Mental Health Act, other than those requiring physical health needs urgently to be addressed in A&E units, are taken to a police station as a place of safety. I appreciate that Her Majesty's Government have allocated money to build suitable assessment units in psychiatric hospitals, but what assurance can the Minister give that facilities will not fail to open due to a lack of staff? How will Her Majesty's Government monitor the availability of these suites to help patients in need?

My Lords, I thank the right reverend Prelate for his questions, which are entirely reasonable. The capital funding allocated by the Department of Health in 2006 included £1.35 million for Nottinghamshire Healthcare NHS Trust to build a new eight-bed unit, including a Section 136 facility. Indeed, a condition of the funding was that Nottinghamshire met the revenue costs. There really is no reason why NHS bodies locally, in partnership with other relevant agencies, should not provide appropriate facilities and arrangements.

On the right reverend Prelate’s second question, we have given some thought to monitoring in respect of Section 136. The primary responsibility for ensuring effective and appropriate use of Section 136 lies with the responsible local agencies. However, our revised code of practice to the Mental Health Act makes it clear that locally agreed policies must include arrangements for effective monitoring of how, in what circumstances and with what outcome Section 136 is being used locally.

My Lords, the fact that severely mentally ill people still spend many hours languishing in police cells reflects a much wider failure to invest sufficient resources in in-patient units and services. The result is that the current risk is unacceptable. Will the Minister seek from strategic health authorities an assurance that they will review the levels of risk and the quality of services in in-patient units as well as the availability of Section 136 suites and that they will spend sufficient money to ensure that there is an acceptably low risk?

My Lords, I am very happy to revisit this question, but we have made it clear in our revised code of conduct that police stations should be used only exceptionally as a place of safety under the Act. There is clearly much to do, as they are used much too often. The code stresses that it is preferable for people to be detained in a hospital or other healthcare setting where mental health services are provided.

My Lords, does the noble Baroness realise how encouraging it is to hear that she is aware of this as a problem that the Government must tackle earnestly? Does she also realise how much that pleases me, given that, when I was a Minister in the Department of Health and Social Security in 1982 and, later, when I had responsibility for the Prison Service, I was faced with exactly the same cries about insufficient secure beds in NHS services for the number of people who needed them? The result is treatment that is not acceptable.

My Lords, the noble Lord is correct: we are driven by a desire to prevent and minimise people with mental disorders coming into contact with police and being detained by them. He is absolutely right that we need to improve access to healthcare.

My Lords, I shall expand a little on what the noble Baroness, Lady Meacher, asked because I think she was trying to get a rather broader response. What are the Government doing to ensure that mentally ill people can and want to access emergency and in-patient services, with confidence that they are of such a quality that they do not have to deteriorate to the point where a Section 136 is necessary—so they can get in early? What are the Government doing to ensure that services are of an acceptable quality that people want to use?

My Lords, the noble Baroness will be aware from experience that the Government have made the provision of services to those with mental illness a priority, which has included an additional £130 million capital funding to the NHS in England to assist with the development of dedicated healthcare-based facilities, including for people detained under Section 136, but not only for them.

My Lords, will strategic health authorities monitor the provision of acute mental health services in rural areas? It is evident that in some rural areas police stations are overused as places of safety because of a lack of facilities.

My Lords, I need to repeat what I said earlier: monitoring is a local responsibility. However, the Independent Police Complaints Commission is expected shortly to publish findings on the use of police stations under Section 136, which will include rural facilities. The Royal College of Psychiatrists working group is developing an agreed approach to recording information about the use of Section 136. Both those things will help to take this forward.

My Lords, will the future Care Quality Commission have a role in setting and monitoring standards in this area?

My Lords, the noble Earl is aware that it will. I hope that the CQC will take this up very seriously.

asked Her Majesty’s Government:

What action they propose to deal with delays encountered by those wishing to create new lasting powers of attorney.

My Lords, since October 2007, the Office of the Public Guardian has seen a significantly higher than predicted number of applications to register lasting powers of attorney. A strategy to deal with the high volume has been implemented, and improvements are starting to be seen. I expect further progress to be made over coming months.

My Lords, I thank the Minister for that reply. Does he accept that it is now taking four months to set up a lasting power of attorney where it took only a month to set up the old one, that costs have risen fourfold to more than £1,000 a time and that relatives now have to complete two forms, each of 25 pages, compared with a single four-page document previously? Is any consideration being given to reducing those 25 pages?

My Lords, I think that the cost must refer to the cost of lawyers, which is a question between the client and the lawyer. Some of the time built into the new system is because of the safeguards that were deemed to be necessary and were thought to be absent from the previous system. I have copies of both forms, which were carefully prepared in consultation with stakeholders. However, I am sure that over the next few months there will be an opportunity to take account of the comments made by the noble Baroness. We are committed to reducing the time for the overall process to the absolute minimum.

My Lords, does the Minister accept that one of the problems with lasting powers of attorney is that people who enter into them are often ill and frail? Filling out 25-page forms is not the easiest thing for them to do, and they may be subject to influences. What would the Minister do to publicise the benefits of people entering into a power of attorney of this nature when they are relatively in charge of themselves and understand all the implications?

My Lords, I understand the point that the noble Lord raises. The problem has arisen because the number of applications per month reached 6,000 last month against an estimate, when the new policy was enunciated, of around 2,600 a month. That suggests that, notwithstanding the short-term problems with the timetable, the message about the importance of the lasting power of attorney is getting through to potential donors. I entirely understand the point that he makes about the forms, and I am sure that, as part of the review after 12 months of the operation of the new system, that matter will be looked at carefully.

My Lords, when there are delays and when money from the person’s account is needed—for instance, to pay care home fees—what provisions are there to enable access to funds prior to registration?

My Lords, I assume that the noble Baroness is referring to a situation where a person has not yet become registered. Clearly that will depend on the circumstances of the individual. Under Section 5 of the Act, there are provisions to enable a person to act on behalf of an individual on that basis. Ultimately, application can be made to the Court of Protection.

My Lords, the point raised by the noble Baroness, Lady Greengross, is absolutely correct. Difficulties are being experienced by people in precisely those circumstances. Will my noble friend undertake to look at that matter specifically and perhaps write to us?

My Lords, of course I am happy to look at the matter, but it should be remembered that the lasting power of attorney was not meant for emergency use; it is there to enable a person to plan their future in good time. That is why, as I just mentioned, there are the provisions in Section 5 of the Act and, ultimately, application to the Court of Protection, which allows a matter to be dealt with immediately if an application has not yet been registered.

My Lords, with respect, I think that the noble Lord is not right. The power of attorney is often used at a time of momentary distress, often with instructions to look after children. I speak from professional experience. It is then, at times, forgotten about and left there. It is a difficult situation, but it ought not to be regarded as a merely temporary arrangement, as the noble Lord said.

My Lords, I am not sure that I did get it wrong. I was referring to circumstances where an application has been made but has not yet reached full registration, where there are provisions to allow the matter to be dealt with. I think that the noble Lord is referring to what are sometimes described as fluctuating conditions, where a person may have capacity at one point but not at another. The whole point about the new structure is that it is designed to be flexible enough to deal with those circumstances.

My Lords, is the noble Lord aware that his honourable friend in another place, Bridget Prentice, has been organising a series of seminars with her staff? I attended the first one last Monday, which I found extremely helpful and recommend to other noble Lords. She is holding more such seminars, where staff explain why it has been taking so long to deal with the matter, why they have to raise fees—because they have to be self-supporting—and why there are two forms. I ask the noble Lord to recommend the seminar to other noble Lords.

My Lords, I think that this is the first time in eight years that I have been able to say that I thoroughly endorse the views of the noble Countess.

My Lords, the noble Lord has made it clear that the principal hold-up is an excess of work falling on those who have to grant the powers. Surely, when there is too much work, it is a good thing to have some more workers.

Yes, my Lords, and part of the improvement programme has been to put more people to work in the registration system, alongside more IT equipment. That is why the time taken to deal with registration, where there is nothing wrong with the way in which the form has been filled in, is expected to be back on target by the end of August.

My Lords, why not just have shorter forms?

My Lords, because these forms are easy to read. Whatever other defects noble Lords might find in them, they are absolutely clear to read. I am sure that they resulted from consultation, which said that many previous forms were too small and difficult to read. I fully accept that we can learn the lessons from the past few months. The October review will take this into account. If the forms need to be changed, they will indeed be changed.

asked Her Majesty’s Government:

What has been the percentage increase in the carbon dioxide content of the atmosphere over the United Kingdom as a whole since the Second World War.

My Lords, my department has funded CO₂ measurements at Mace Head in the Republic of Ireland since 1987. There, the latest annual average is 385 parts per million, which is the same as that measured in Hawaii, where continuous measurements of carbon dioxide have been made since 1958. Carbon dioxide is well mixed in the atmosphere; therefore, the issues are comparable. The percentage increase from 1958 to today is approximately 22 per cent; that is, from 315 parts per million to 385 parts per million.

My Lords, I am grateful to the noble Lord for that reply. Is it not important to get these matters into proportion? Whatever may be the percentage increase over the period given by the noble Lord, does not the absolute figure remain microscopic? Is it not very difficult to believe that that microscopic figure is responsible for whatever global warming has taken place in recent years, particularly since, in very recent years, there appears to have been no global warming at all?

My Lords, the latter point is not correct. The averages may not have changed, but land temperature has increased considerably more than sea temperature because, in the Pacific, El Niño is a cooling factor—part of the ebb and flow. That has now switched off, as I said to my noble friend Lord Sheldon the other week. Therefore, the average can be very misleading.

An increase of 22 per cent, or of one-fifth—I earlier asked officials about this—in CO₂ since 1958, when measurements began in a consistent way by US scientists in Hawaii, is a considerable part of the problem. Of course, the figures I have given relate only to the Question and to CO₂. Figures for greenhouse gases are much higher, at 432 parts per million. All the evidence indicates that somehow we have to stabilise them at less than 500 parts per million; otherwise, we will not need to bother about future weather forecasts.

My Lords, knowing how well my noble friend briefs himself, I assume that he has now taken the opportunity to read the book written by the noble Lord, Lord Lawson. Even if he agrees only with part of it, like me, would he accept that making decisions on climate change, which are based on the assumption that forecasts for 50 years and 100 years are accurate, does not make a lot of sense to anyone, especially as it is very difficult to make forecasts for next week?

My Lords, my noble friend makes a point. No, I have not done the noble Lord, Lord Lawson, the justice of reading his book but, after the kind things he said about me a couple of weeks ago, I promise to make it a top priority. Leaving aside the forecasts for 100 years hence, let us look at the impact of what has already happened with greenhouse gas concentrations. Since 1900, the earth’s temperature has warmed by 0.8 degrees centigrade, much of which was in the past 50 years. Sea level has risen by 20 centimetres in the 20th century. The northern hemisphere’s snow cover has decreased in every month except November and December over recent decades. In the late 1980s, average snow cover dropped by 5 per cent. Arctic sea ice coverage has undergone long-term decline at all times of the year in recent decades. Last year, the extent of summer sea ice reached a record low. Those things have happened. They are not related to 100-year forecasts. Something is happening with the climate and the consensus says that we should be mindful and take some action.

My Lords, I am very grateful to the Minister for undertaking to read my book. It is short, and he will find it easy. Perhaps we may discuss it afterwards. But it really will not do to cherry-pick examples as he has done. Arctic sea ice, for example, has declined. Antarctic sea ice has increased over the past year by more than it has for many years. The average temperature is the average temperature, which he quotes when it suits him. He decries it when it does not. Does the Minister agree to look at this issue with an open mind and not perhaps be over-influenced by his department’s Chief Scientific Adviser, who is a very committed person in this dispute? In fact, there are scientists on both sides, and a substantial minority—30 per cent—disagree with the conventional wisdom.

My Lords, to be honest, I have not had discussions about the long term with the department’s Chief Scientific Adviser, a Nobel Peace Prize-winning scientist on this issue, who speaks for the majority of scientists, a point made by the noble Lord. The fact is that the figures I have given are those measured by earth-based stations. There are other ways of measuring what has happened with CO₂—in ice, for example, and using satellites, which are not so accurate. The fact of the matter is that concentrations of CO₂ are reckoned to have increased by 35 per cent since 1750, when the concentration stood at about 280 parts per million, and they are now higher than they have been for the past 800,000 years—I repeat, higher than for the past 800,000 years. It may be that in the ebb and flow of time CO₂ levels will go down again—in another 800,000 years—but we need to be able to do something today if something is happening to the atmosphere that is caused by man. That is the issue: is climate change man-made or not? The consensus is that it is.

My Lords, we agree strongly with the Minister’s and the Government’s sense of urgency over this matter. One of the big growth areas in recent years has been that of aviation and air travel. Could the Minister outline what the Government are urgently doing now to reduce those emissions, such as in the area of airport expansion?

My Lords, we are not going to be childish and stop people taking cheap holidays, which is what the Lib Dems want us to do. We cannot do anything as a nation on aircraft emissions; it has to be done internationally. The initial stage will be through the European Union. There is a plan for the Union to take on aircraft emissions as a whole in phase 3 of the emissions trading system, which will start from 2012. This cannot be done by individual countries; it has got to be done with international agreement. To start with, we have European-wide support from 2012. It is a very thorny issue and we agree with the noble Lord, but it cannot be done by one country alone.

My Lords, with the permission of the House, my noble friend Lord Darzi of Denham will repeat the Statement entitled “NHS: Next Stage Review” at a convenient point after 3.30 pm.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

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

House in Committee accordingly.

[The LORD SPEAKER in the Chair.]

Clause 28 [Power of trustees to modify by resolution]:

moved Amendment No. 84:

We have debated some of the issues that lie behind these amendments already in Committee. The amendments are part of the Government’s denial of the problems that the definitions in the Bill will involve. They are happy to grant the trustees a power to alter the scheme rules to allow an employer to pay more or more often into a scheme, but they have not recognised that the problems the Bill will cause will operate in a different way. Employers will have to pick up the costs of any rule changes, either directly or indirectly, and Clause 28 correctly requires employer consent. But they will not give that consent unless there is some advantage to them, and it is not obvious what the advantage will be of increasing contributions under the Bill.

We will not oppose the amendments, but they do not address the real issues that will arise under the Bill of why employers would want to incur costs to amend their own scheme—not only by paying more in but by changing the rules and their payroll systems to meet the definitions we discussed on our previous Committee day in connection with the group of amendments under Amendment No. 60A. The difficulties are so great that it would be easier for employers not to amend their existing schemes but simply to let personal accounts take over. Levelling-down is the elephant in the Committee. The Government cannot wish it away with amendments like this.

To some extent, the Government have got their timing wrong. If we were clearer on exactly how they see this working, we would be happier. Like the noble Baroness, we do not oppose the amendments in principle, but it looks as though the Government have not got their ducks in a row, if I may put it that way.

I am surprised at the reaction to these modest provisions. The noble Baroness asked what would encourage employers to make changes under their schemes to comply with the auto-enrolment and quality requirements of the Bill. It is fairly obvious: they would want to have, as they do now, good quality provision for their employees. They see the competitive advantage in many cases of good scheme provision and they do not want unwittingly to fall foul of the rules relating to qualifying earnings.

Qualifying earnings underlie the amendments and other matters that we will discuss. The Government’s aim is to maximise the number of new savers and savings and to support existing pensions arrangements. We do not want to disrupt arrangements that offer good pension outcomes for savers. As noble Lords know, a number of stakeholders raised concerns about the practical arrangements for dealing with scheme qualification in relation to qualifying earnings. We discussed some of these when we debated amendments to Clauses 12 and 19.

Since then, the Minister of State for Pensions Reform and I have been talking to stakeholders about how we can make the test as simple as possible while still preserving the new minimum level of pensions savings. We focused on a suggestion by a group of four stakeholders—the ABI, NAPF, ICAEW and SPC—the essence of which is annual reconciliation, which we have also been thinking about for a while. A key objective for the Government is to avoid disruption for existing schemes so that good arrangements may continue to function beyond 2012 without unnecessary changes or additional administrative processes. More detailed discussions with key stakeholders are already planned, and I fully expect to be able to be clear about our approach on Report. I hope that that has reassured the noble Baroness and indeed the noble Lord, Lord Oakeshott.

That was most encouraging. The issue will not go away, as we said on the previous Committee day, and I am glad that the Minister has taken the Government’s thinking a little further forward. There is clearly some way to go, but I am grateful for what he has put on record.

On Question, amendment agreed to.

moved Amendment No. 85:

moved Amendments Nos. 86 to 88:

moved Amendment No. 89:

This is the fifth or sixth of a large group of government amendments that we are due to look at today. Many of them are eminently sensible, but as my noble friend Lady Noakes has just said, we have queries on some of them. Incidentally, by my count, the number of amendments that the Minister’s advisers hope we will get through by the end of the day is 77. I suspect that they are a little erroneous in that view, but we shall see.

Amendment No. 89 is supposed, as the Minister said, to allow the deductions to be made from the first pay day after the auto-enrolment. However, the amendment does not actually say that; it says,

“at any time on or after the date with effect from which the jobholder is to become an active member of a scheme under the arrangements”.

If it said what the Minister thought it said, I would be perfectly happy, but

“at any time on or after”

does not give me that confidence.

This is part of a continuing debate we are going to have about the structure of the Bill. It is about taking a power so that we can ensure that employers have to deduct upfront under any arrangements; otherwise, some might be tempted—although I accept that this is overwhelmingly not the case—to take contributions later on, even though there is an automatic enrolment requirement from day one. That would disadvantage employees in respect of their pension arrangements. This provides for a power so that the regulations can make clear when those deductions can and should take place and require that they take place upfront.

The noble Lord will be aware that the precise mechanics of auto-enrolment and the opt-out period are still being worked through, which is why the provision is perhaps not as prescriptive as he would like, but the intent is very clear: to prevent arrangements being put in place whereby contributions were taken from employees down the track, after they had been auto-enrolled, so that they did not get the full benefit of that auto-enrolment. I accept that the provision is not as prescriptive as the noble Lord would wish, but these powers are part of the structure of the Bill and enable what we want to happen. I think we have agreement on what we want to happen.

I fully understand what the Minister wants to happen, but I do not think, with the best will in the world, that the amendment achieves it. The Minister quite rightly wants the money to be taken on the first pay day after auto-enrolment—I accept that; it is absolutely right—but I advise him to withdraw the amendment and think it out again.

The amendment seems to be pretty straightforward. It states:

“Regulations prescribing arrangements for the purposes of section 3(2), 5(2), 6(3) or 8(2) may require the employer to make such a deduction or payment at any time”,

et cetera. The noble Lord may balk at the term “may”, rather than “should” or “will”, being used, but the amendment provides a power so that regulations can require the employer to make those deductions from the start. I am happy to ask officials to look at it again, but I believe that it is clear and does not need it.

As I have tried to make clear, it is the “et cetera” that worries me.

moved Amendment No. 89A:

I wonder whether the noble Lord can help me. I am not sure that I fully understand the intent of proposed new subsection (2), which states:

“If the projected figure published in accordance with subsection (1) exceeds 10% of the total expected pensioner population”.

Does that mean 10 per cent of the pensioner population, or 10 per cent beyond the pensioner population expected to be on benefit, given that about 25 per cent of pensioners draw housing benefit now—that figure is not likely to fall—and that some 30 per cent, perhaps more, will continue to draw council tax benefit? Is he saying that all this must come into play given 10 per cent of a retiring population, or the full existing pensioner population, or is the 10 per cent greater than the pensioner population already in receipt of benefit? Which of the three possible meanings is intended under the proposed new subsection (2)? That may help us to further the debate.

Proposed new subsection (2) means much as it says. When the number of people on expected means-tested benefits exceeds 10 per cent of the pensioner population—I put the word “expected” in another part of the amendment; I hope that makes it clearer for the noble Baroness—a report will be published and the introduction will be delayed.

Perhaps the noble Lord could help me further. If in 2011, say, the Government were to publish a report stating that they expected that of the total pensioner population in 2012, instead of 30 per cent there might be 25 per cent on council tax benefit, and that instead of 25 per cent on housing benefit, as now, there might be 22 per cent, does that mean that, according to the rest of the proposed new subsection (2), the whole of this Act must be postponed?

Yes, it does.

Can the noble Lord suggest how, under any circumstances, he will remove council tax benefit and housing benefit from an existing pensioner population—all 11 million or so of them—who are in their existing housing with their existing income and entitlement? How will he bring the number down from 30 per cent or 25 per cent to 10 per cent in order for the second part of proposed new subsection (2) to come into play without making them poorer? Does he propose that they should have that benefit withdrawn, or that the local authority should cut rents, or that the Government should halve council tax? Given that he is dealing with the existing pensioner population, he cannot have more than marginal changes at the edges of the statistics.

The noble Lord is therefore saying that the amendment would in effect delay the implementation of the legislation to the disarray and discomfort of all the stakeholders involved who have been planning to this timetable. There is no way in heaven or hell that you can deliver proposed subsection (2), given the existing pensioner population who are already in the council houses and flats and housing association homes and claiming council tax benefits now. The amendment is nonsense. It is simply a recipe for delay that would disrupt the entire planning process for all the stakeholders who are working to the 2012 deadline. I suggest that the noble Lord thinks again.

I shall be delighted if the debate on the amendment means again that not only two can play. I agree with what I am sure is the intention behind the noble Lord’s amendment—to highlight the continuing effect and amount of means testing in the system and to see what can be done about reducing it or at least ensuring that the most high-risk groups are properly protected from it.

We have already discussed the basic statistics and the basic problem at some length on the amendments that my noble friend Lady Thomas and I moved on a previous day to try to ensure that generic face-to-face advice was available to the high-risk groups, so I do not want to go over that again. I should say to the noble Lord, Lord Skelmersdale, that the DWP recently published its estimates—I do not expect that those figures will change very much—of the proportion of pensioner households that will be subject to means testing at different dates. They are, of course, exceptionally high. I remind noble Lords that under the new reform system, as the department calls it, the figure for 2020 is now 55 per cent and still 40 per cent for 2050.

It might be worth pointing out that the DWP says that it is testing the sensitivities of these assumptions. It states that these four figures,

“have been tested for sensitivity to plausible changes in underlying assumptions about the future level and distribution of pensioner incomes and future growth in rents and council tax liability”,

which is obviously significant. It continues:

“Based on these tests the proportion of pensioner households entitled to income related”—

in other words, means-tested—

“benefits in 2050 appear to be robust to the changes in assumptions, with pension credit varying by around five percentage points”,

and the other benefits by very little.

We all know that there will be a serious problem with means testing for the foreseeable future. Although, if pressed, we would support amendments that seek to ensure that the Government update those estimates, in a way this amendment does not go far enough. I hope that all of us who are concerned about this will think carefully about this before Report. We need not only to know the shape of the figures, which are fairly clear, but to press the Government further on what we are going to do to protect the most at-risk groups.

I add to what my noble friend has said by discussing how auto-enrolment into pension provision will interact with those who are likely to be on means-tested benefits in retirement. This is one of the chief concerns of all those who are involved in the Bill, and is one of the great unknowns. The noble Baroness, Lady Noakes, said at Second Reading that it was,

“something of an evidence-free zone”.—[Official Report, 3/6/08; col. 119.]

Even the redoubtable Pensions Policy Institute said that some of the factors that will have an impact on returns from savings and personal accounts,

“could be more problematic than others”,

in predicting the point at which saving decisions are taken. It continued:

“Clearly, nobody can predict with certainty all of their future life circumstances”,

or marital status, and it may be difficult for an individual to predict whether he or she will be renting in retirement. Although it is clear that more pensioners will own their own homes in future, no one can know for certain what will happen to the housing market. Those who may have thought that their homes and jobs were safe may find that things are very different some years hence.

In his winding-up speech at Second Reading, the Minister did not give us very much information about the Government’s review of Pays to Save. He just said that the scheme was not buying people off, that it was there for a proper purpose and that he was sure it would deliver. Perhaps in his reply he could expand on what action the Government will take and in what circumstances when the review is published.

From the very beginning there has been concern on all sides about the interaction of the scheme with the benefits system. Therefore, I support the intentions behind the amendment but, on the other hand, it does not meet the objectives which I think the noble Lord, Lord Skelmersdale, had in mind in introducing it. In particular, I share the views expressed about proposed new subsection (2) of the amendment. I do not see why the implementation of the scheme under Clause 58 should be postponed for at least 12 months, as the subsection says, while consideration is given to the projected figure of 10 per cent referred to in the amendment. That seems a rather unusual figure to quote. In those circumstances, although I am sure that the Committee is concerned to ensure that interaction with the benefits system should be ironed out somehow or another—indeed, we know that the Government have that under continuing review—I cannot support the current wording of the amendment.

I ask the Committee to reject the amendment and I thank all noble Lords who have contributed to this short but important debate. As the noble Lord, Lord Oakeshott, said, the issue of savings incentives and the interaction with means-tested benefit has enjoyed lengthy and constructive debate in both Houses, and it is clearly an important issue. Perhaps he did not use the word “constructive”; that is my gloss on his presentation.

I reiterate that under reasonable assumptions the majority of those who enrol can expect to benefit from having saved, and we must not lose sight of that. The noble Lord’s amendment would delay introduction of the personal accounts scheme, but seemingly not auto-enrolment generally, if the number who may not benefit was greater than 10 per cent of the total expected pensioner population.

I hope that we all accept—the noble Baroness, Lady Thomas, touched on this—that no amount of analysis can tell individuals at the point of enrolment exactly how their lives will turn out possibly decades into the future. We know from analysis, for example, that there is around a 10 per cent chance that a 20 year-old man today will not reach state pension age, but no one is suggesting that we should stop advising 20 year-old men to save for their retirement. On this issue, perhaps I may quote the noble Lord, Lord Turner, who said that,

“if at the end of the year your house has not been burgled, it does not mean that it was bad advice to buy a household insurance that year”.

As I said at the outset, our package of reforms means that most people can expect good outcomes from saving, while those who do not wish to save will be able to opt out. The provisions in the Bill represent the remaining pieces of our pension reform package, and any delay in their introduction would deny many individuals the very real benefits of starting to save early.

Again, as the noble Lord, Lord Oakeshott, said, we have already published our projections of entitlement to all income-related benefits for the pensioner population until 2050. Around 40 per cent of pensioner households will be entitled to one or more income-related benefits by 2050. As my noble friend Lady Hollis said, there is no prospect of reducing that figure to 10 per cent. Indeed, as I think we have discussed before, if the basic state pension were doubled in 2012, in 2050 25 per cent of pensioners would still be on one or more income-related benefits.

Through our reforms we are reducing the level of means-testing, not increasing it, because without reform it would have increased to 75 per cent in that period. By 2050, the basic state pension will be worth more than double what it otherwise would have been, ensuring a solid foundation for private saving.

We could debate, as we have done in the past, what an appropriate level might be for pensioner households on means-tested benefits, but I do not apologise for the need to retain a means-testing system. Such a system protects the most vulnerable individuals against poverty within inevitable cost constraints. However, in this debate we must absolutely not lose sight of the fact that both our analysis and that of the Pensions Policy Institute demonstrate that people can be on benefits in retirement and be better off for having saved. Equating those on income-related benefits with those who will not be better off from savings is simply not right. We need to remember that because of our reforms to the state pension system, someone with a good record of working or caring, including those on low earnings, can expect a state pension of around £150 in 2008-09 earnings’ terms by 2050, more than £25 above the pension credit guarantee.

The interaction between means-testing and savings incentives is not a new issue. There are already safeguards in place to improve incentives to save. In 2003, we introduced the savings credit to prevent a pound-for-pound clawback. People can take up to 25 per cent of their pension pot as a tax-free lump sum and those with less than £16,000 can take 100 per cent of their pension pot. Our analysis shows how these are already working to improve incentives for those who have been suggested as the most vulnerable. Older groups with lower earnings, for example, are most likely to be able to trivially commute their savings, gaining a cash sum. Up to £6,000 of that—a significant amount for many, I suggest—can be held without any impact on any pension credit or housing benefit that they may receive.

We would have to think carefully before discouraging such people from saving. Indeed, while the challenges around means-tested benefits are clearly an important matter, the PPI has stated that this,

“does not mean that people should … be auto-enrolled”.

But, as the PPI has also made clear, this implies that people will need access to clear information. We fully agree with that; indeed, Clause 9 of the Bill recognises the importance of information. We will ensure that every automatically enrolled individual has access to the range of information that they need to understand the process of automatic enrolment, the pension scheme into which they will be enrolled, their expectations for a state pension and the implications for their later life.

Anyone who does not think that pension saving is for them, regardless of the reason, will be able to opt out. But that should not be allowed to detract from, or hinder, the fact that we are further improving savings incentives through this Bill. Millions of workers, many for the first time, will see their pension contributions matched pound for pound through the employer contribution and tax relief. It is right that we should protect against unpredictable events and provide a safety net for those who need it most and it is right that we should encourage individuals to save and take personal responsibility for their own retirement income, giving them the security and flexibility of their own savings pot.

Governments always need to strike a balance between alleviating poverty and encouraging savings. They must do so in a way that is both affordable and sustainable. Our reform package achieves that. We agree that this is an important matter, but the Government, external stakeholders and, I thought, all political parties are also agreed that there is no magic bullet and that progress of this Bill need not be delayed. Nigel Waterson MP said:

“We never thought it was realistic to deal with this during the life of the bill”.

That said, we have listened carefully to the concerns of those in Parliament and outside. Age Concern, Help the Aged and others have asked us to set up a review to look at these issues again and to have an informed debate on the issue. We are now well advanced in that review involving stakeholders and external experts as well as the very best analytical minds and tools at the Department for Work and Pensions. The review will further expand an already extensive evidence base on this issue. It will further improve our understanding of incentives and the impact on behaviour. It will look at how different factors and individual characteristics affect outcomes. Clearly the lessons of this will be vital in developing our information strategy. Importantly, it will assess some of the proposed measures put forward, putting in the public domain an objective assessment of their pros and cons, their costs and the effects on our wider tax and benefit policy.

In all this, we are mindful of the need to strike the right balance between alleviating poverty and personal responsibility for retirement income. We are also mindful of the cost constraints that we face, but we will consider the evidence of the programme and its full implications. I shall briefly touch on some technical issues relating to the drafting—

Before the Minister does so, perhaps I could say that I was rather surprised to hear what he said in his first reference to the Pensions Policy Institute. He gave the impression that the PPI—I know that it guards its independence very jealously—was in some way endorsing government policy. Although I do not ask him to read it out again now, has he cleared what he said with the PPI and, if not, could he do so please?

As it happens, I met the PPI last week; I discussed the programme and the work that it had done and sought its views. The noble Lord is right that it is an independent body, but it was a clear statement; I think that it was in part of the PPI’s response to the consultation and in its report, which indicated that the challenges around identifying those at risk should not cause people not to be auto-enrolled. It meant that people needed very good information, and that is where we agree.

I asked whether the Minister could send the sentence that he used to the PPI and make sure that it is a fair reflection of its views. That is all that I am asking.

I am happy to do that, but I asked a question when we met and I believe that what I said was a direct quote from the letter that I was sent. However, I will certainly clarify this with the PPI if it helps the noble Lord.

Let me make clear some of the technical drafting. My noble friend Lady Hollis dealt with people being at risk, which is not defined here. It seems that the noble Lord is equating the numbers on means-tested benefit with those who are at risk. On that basis, the 10 per cent threshold could not be met.

The amendment would prevent the development of personal accounts, which is not the same as auto-enrolment. It would permit auto-enrolment to proceed on the basis of the noble Lord’s formulation but not the development of personal accounts. That cannot be right.

There are some other technical issues, but I do not want to dwell on those, as we are focused on a more substantive debate today. Let us not forget the big prize here. This package will benefit millions of people. We estimate that in 2050 the reforms will lead to a total increase in annual private pensions income of £11 billion to £16 billion at today’s prices. That is a prize worth having.

I am advised that I read out the PPI quote wrongly, missing out a “not”. I will now read it out properly. I said that while this is clearly an important matter, the PPI has previously stated that this,

“does not mean that people should not be auto-enrolled”.

I thought that that was what I had said but, if not, I am happy to clarify it.

Even if we were to define and identify accurately an 11 per cent risk group, as the noble Lord wants, there would be justifiable fury if we denied the benefits of auto-enrolment to 89 per cent of people who were not at risk, so that millions of low to medium earners would not get the chance of having what many of us have taken for granted throughout our working life. I hope that, on reflection, the noble Lord will feel able to withdraw the amendment.

I had no intention whatever of pressing the amendment. I accept straight away the criticism of the noble Baroness, Lady Hollis. I accept, too, that I went way over the top in drafting the amendment, although I hope that I did not go way over the top in speaking to it. As the noble Baroness, Lady Turner, and noble Lords from the Liberal Benches have said, this is an extremely important subject. There is no doubt in anybody’s mind that means-testing is essential to the success of what we all want to see: a significant increase in the number of people saving for their retirement.

It is inevitable that jobholders will exercise their right to opt out if they feel—and it may not be a particularly sustained feeling—that investing in a personal scheme, especially towards the end of their working life, would so eat into their state benefits, even eliminating them altogether, that they would be no better off than if they had not saved into such a scheme. The advice that they are given, and that we have discussed already, must—simply must—tell them whether it pays for them to save in this way.

I referred in my opening remarks to the work that the Government are still undertaking on this, which the Minister called a review. This, as I understand it, will be completed during the Summer Recess—I hope that I am right. It is on the basis of those results, or what I can discover about the review if it is still going on, that I will decide whether to come back to this matter at a future stage of the Bill, because I am absolutely convinced that it is essential to the future of the whole scheme. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move that the House do now resume.

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

House resumed.

My Lords, with the leave of the House, I will repeat a Statement made by my right honourable friend the Secretary of State for Health in the other place.

“Mr Speaker, as we celebrate the 60th anniversary of the NHS this week, it is befitting that we should acknowledge its successes, secure its strengths and chart a path for its future. Created by fraternity to take the place of fear, the founding principle of the NHS was as clear as it has been enduring: that access to healthcare should be determined by clinical need rather than by the ability to pay.

“The NHS has been a friend to millions, sharing their joy and comforting their sorrow. Today, the service sees or treats a million people every 36 hours, nine out of 10 people see their family doctor every year and a million more operations are performed than just 10 years ago.

“Then, the NHS was suffering from chronic underinvestment. The challenges were too few doctors and nurses, poor equipment and crumbling infrastructure. Patients waited months, if not years, for treatment, waited weeks, not days, to see their GP and measured their time waiting in A&E in days and nights rather than hours. A service whose promise was fair access to all had witnessed patients dying before they could even receive its care.

“This Government resuscitated the NHS and reaffirmed its principles. Today, patients wait no more than four hours in accident and emergency, and by the end of the year they will be able to go from referral by their GP to treatment, with all the diagnostic tests in between, in no more than 18 weeks and normally in nine.

“There have been considerable improvements in the quality of care received by patients and delivered by NHS staff. The improvements for cancer and heart disease alone have saved nearly a quarter of a million lives in the past 11 years. The NHS is now able to deliver the highest quality of care in many medical disciplines and settings.

“The report published today heralds the next stage for the NHS: to deliver the highest quality care for all. It is underpinned by the service’s first constitution, which will empower patients by clearly articulating their many rights, bringing transparency to decision-making and securing its founding principles for generations to come.

“The review has been led by front-line clinicians in every NHS region. Seventy-four local clinical working groups, made up of some 2,000 doctors, nurses and other staff working in health and social care organisations, have developed improved models of care for their communities from maternity and new born to end of life. These are based firmly on the best available clinical evidence and extensive engagement to ensure that they reflect the needs and preferences of local people.

“In common with all health systems around the globe, the NHS faces some significant challenges: ever higher expectations; greater demand driven by demographics; the transformational power of better information; the changing nature of disease and of treatment; and rising expectations of the health workplace. The report puts the NHS on the front foot, seizing the opportunities that these challenges present, rather than simply reacting to their consequences.

“Meeting these challenges demands that the NHS does more to help people to stay healthy and gives them more information, choice and control over their own health and healthcare. Every primary care trust will now commission comprehensive well-being and prevention services to meet the specific needs of their local populations.

“Preventing vascular conditions such as diabetes, stroke and coronary heart disease has the potential to save thousands of lives. Today, about 4.5 million people are afflicted by vascular conditions, accounting for over 170,000 deaths every year. We will launch a new ‘Reduce Your Risk’ campaign to raise awareness and understanding as a precursor to the national vascular screening programme that will begin next year.

“Improving the health of individuals and families will become an increasing focus for GPs. We will work with world-leading professionals and patient groups to improve the quality and outcomes framework to develop better incentives for maintaining good health as well as providing good care.

“As much as the NHS will do more to help people to stay healthy, it will also become a service that responds more rapidly and effectively to the people who use it. Patients will be given more rights and control over their health and care. They will have greater choice of GP practice, with better information to make the best choices for themselves and their families. This will be delivered by a fairer funding system that gives better rewards to GPs who provide responsive, accessible and high-quality services. Choice will not simply be a policy of government but a right secured for all through the first NHS constitution.

“The constitution will guarantee patients access to NICE-approved drugs and treatments. We will give greater support to NICE to increase the speed of its appraisals process so that new guidance is consistently issued more quickly. Primary care trusts will have a new duty to give transparency to their decisions and clear explanations to the public. These measures proclaim an end to the postcode lottery in NICE-approved drugs and treatments.

“These rights will be accompanied by more personal control for patients, harnessing their ingenuity to improve their health and care. Every patient with a long-term condition will be offered a personalised care plan, jointly agreed by the patient and a named professional, so that services are organised around the needs of individuals. For the first time, we will pilot personal health budgets that give individuals and families the fullest control over their care.

“All of the measures announced here today are designed to improve the quality of care that patients receive; it is essential that quality is understood from patients’ perspective. They pay regard to experiences as much as effectiveness, with safety as a given. Patients want to be treated in environments that are safe and clean; they want to be shown respect and regard, compassion and kindness. The highest clinical quality can be undermined by letting the simple things slip.

“We must have an unwavering, unrelenting, unprecedented focus on quality. Our approach will be dedicated and disciplined, putting quality at the heart of everything that the NHS does.

“We will begin by bringing clarity to quality, ending the daunting and frustrating confusion that is caused by the morass of standards. NICE will be transformed to select the best available standards, fill the gaps and establish a new NHS evidence service that will ensure that best practice readily flows to the front line.

“We can be sure to improve only what we can measure; information can unlock local innovation by showing clinical teams where their greatest opportunities lie. We will create a national quality framework, so that every provider of NHS services systematically measures, analyses and improves its performance. Front-line teams will be supported by a new set of graphically illustrated quality measures, known as clinical dashboards, informing the daily decisions that lead to improvement.

“The power of information will be provided to the public. We will legislate so that all providers of NHS services will be required by law to publish quality accounts just as they publish financial accounts. These will detail the quality of care that they provide for each and every service. Easy-to-understand comparative information will be made available online.

“For the first time, improvements to quality will be recognised and rewarded. Patients’ own assessments of the success of their treatment and the quality of their experiences will have a direct impact on payments. We will harness the expertise and experience of clinicians to raise standards by ensuring strong clinical involvement at every level of the NHS. New medical directors will be appointed to join existing nursing directors in every NHS region. They will be supported by clinical advisory groups to sustain and support the strong clinical voice elevated through the review.

“Nationally, a new quality board will be formed to provide leadership, to give advice to Ministers on top clinical priorities for standard setting and to make an annual report on the state of quality in England compared to international peers. There will be strong safeguards for quality, with no hiding place for those who fail to get the basics right on issues such as infection. I have already announced that the Care Quality Commission will have tough new enforcement powers to tackle infections and other lapses in patient care.

“Finally, we know that healthcare works at the edge of science, constantly creating new ways to cure and care for patients. The NHS has long been a pioneer, but too often too few NHS patients have benefited. We will create an environment where excellence and innovation can flourish. That is why this report heralds new partnerships between the NHS, universities and industry to achieve the very best care for patients. This ambitious agenda to improve quality for patients can succeed only by unlocking the talents of the front line. We will ensure that NHS staff have the freedom to focus on quality, empowering them to improve services.

“Clinicians have abilities that go beyond their clinical practice alone. Our new expectations of professionalism redefine their roles as practitioners, partners and leaders in and of the NHS. We will unlock their creativity and innovation, give greater responsibility for stewardship of resources and proclaim a new obligation to lead change where the evidence shows that it will improve quality.

“These noble objectives will be supported by pragmatic action. Our journey of setting the front line free from central direction will continue. Our commitment to foundation trusts remains strong and we will extend similar freedoms to community services. We will free up their talents by introducing a ‘right to request’ to set up a social enterprise. All primary care trusts will have an obligation to consider these requests, and staff choosing to join such organisations and continuing to care for NHS patients will be able to retain their pensions.

“With greater freedom will come a newly enhanced accountability. The report sets no new targets. Our approach will be openness on the quality of outcomes achieved for patients, meaning accountability for the whole patient pathway from beginning to end. NHS staff are the service’s most precious asset. We will more clearly illuminate how highly we value them by making new pledges to all staff on the constitution, on work and well-being, on learning and development and on involvement and partnership. All NHS organisations will have a statutory duty to have regard to the constitution.

“Furthermore, the system for education and training will be reformed by working in partnership with the professions. We will open a new chapter in our relationship with the medical profession by establishing Medical Education England. We will increase our investment in nurse preceptorships threefold so that newly qualified nurses will be given more time to learn from their senior colleagues. We will pay a higher regard to the contribution of non-clinical staff—the porters, administrators and others who are the backbone of the service—by doubling our investment in apprenticeships and we will strengthen arrangements for learning and development so that all staff have access to the opportunities that they need to update and enhance their skills. Following today’s publication of the final NHS next-stage review report, we will, over the course of this week, be publishing supporting documents setting out in more detail our conclusions for primary and community care, for workforce and for informatics.

“Let me turn to the first NHS constitution. The changes outlined by the review will improve quality, but the best of the NHS—its enduring principles and values, its defining rights and responsibilities—must be protected for generations to come. Patients and the public should be empowered by the clear expression of their rights in relation to the NHS and the value of staff should be fully recognised. Decision-making should be transparent and accountability strengthened. It is right and proper that a national health service funded by national taxation should remain accountable in and to Parliament. These goals are accomplished by our draft constitution, which we will publish for consultation today.

“Our proposal is to legislate so that all NHS bodies and independent and third sector providers of NHS services must take account of the constitution in their decisions and in their actions. The Government will be required to renew the constitution every 10 years, involving the patients who use it, the public who fund it and the staff who work in it. No Government will be able to erode or undo the fundamental basis of the NHS without the consent of the people’s elected representatives. Safe in the knowledge that the best of the NHS shall not perish, we will pursue our ambition to deliver the highest quality care to all, not in some respects, not in many respects, but in all respects. On its 60th anniversary, after a decade of investment, the NHS has the most talented array of staff in its history, united in their ambition. High quality care for all is now within our reach. The report charts a path towards its achievement and I commend it to the House”.

My Lords, that concludes the Statement.

My Lords, on behalf of these Benches perhaps I may first express my thanks to the noble Lord, Lord Darzi, for having repeated this important Statement to the House. I confess that it is a slight surprise to me that, as the Minister commissioned to carry out the next-stage review and to bear prime responsibility for it, he should be repeating the Statement rather than making it on his own account. I am sure I cannot be alone in attaching some significance to that. What we all hoped would emerge above all from this exercise is the noble Lord’s own vision for the future delivery of healthcare in England with the benefit of sound advice from the professions and after the freest possible consultation. We did not want the noble Lord to be in any way hijacked. The fact that the Secretary of State should have appropriated today’s announcement to himself could be indicative of what some of us feared when we read Mr Johnson’s comment in the Guardian earlier this year when he said that he regarded the noble Lord as a tethered goat. The noble Lord deserved better than that. But it is one reason why I suggest to the House that we need to examine this review for evidence of what one might term unwanted departmental influence.

The report which the noble Lord has summarised for us today has been long awaited and will doubtless be pored over in the weeks to come by all with an interest in it. I have not yet had an opportunity to read it, and for that reason it is not possible for me to pass any detailed comment. However, there are surely two tests that the report needs to pass if it is to command acceptance and approval. We need to see that the benefits to patients that it trumpets are genuine and evidence based, and we need to see that its recommendations are achievable, given the inevitable constraints of funding, premises and the numbers of medical and other professionals on the ground.

The noble Lord spoke of this Government having resuscitated the NHS. I should like to think that if he had given this Statement himself, he would not have said that. After 11 years of a Labour Government, he will know that the backdrop to this report is a picture of health outcomes of which this country cannot be proud. For all the additional money poured into the NHS over the last few years, we still have cancer survival rates that are below the European average, high mortality rates from heart disease and stroke, and mortality rates from lung disease that are little short of abysmal. It is therefore strange that we should now suddenly be talking about needing to put quality at the heart of NHS care. The noble Lord spoke of the quality and outcomes framework, but we have seen this year how the QOF was all but neutered by politically driven objectives at the expense of the well considered recommendations of the expert group.

The noble Lord has spoken of putting patients’ wishes first and giving doctors and nurses clinical autonomy. I hope he will forgive me if I say that this line has a familiar ring to it: we have heard it before. He says that change will not be driven by top-down targets. But if that is so, what is to become of the targets that are now in place and that Ministers have so consistently defended? It is no secret that I believe government targets to have had a damaging effect on professional autonomy and morale, and a distorting effect on clinical priorities. They also treat patients as passive recipients of care rather than as empowered individuals. Unless most of these targets can be ditched—and we have not heard that they will be—the noble Lord is unable to say, with any confidence at all, that he is restoring clinical autonomy to the professions.

I welcome the idea of having indicators of quality and patient satisfaction—we have advocated those—but what has become of practice-based commissioning? How do the Government view the role of foundation trusts in the future? What is to happen to payment by results and how is the tariff system to be improved and unbundled so as to remove the barriers to delivering properly costed treatments? These mechanisms were meant to be the engines for improving the quality of care in the health services, but we have heard nothing about them.

The new performance regime published four weeks ago gives strategic health authorities the power to control their areas. That did not have the ring about it of the kind of local autonomy that the noble Lord has spoken of. In his review of the east of England, the noble Lord proposed,

“21 new bodies set up at a regional level”.

Can he look us in the eye and say that this is a locally driven decision? If that kind of approach is to be adopted up and down the country, can he assure us that the risks of establishing further bureaucracy will be avoided?

The Minister has spoken of removing the postcode lottery for medicines. With respect to him, we have heard this innumerable times before. Of course we will support any moves towards greater transparency of decision-making by PCTs—I proposed an amendment to the Health and Social Care Bill last week on exactly that point—but this country is still amongst the slowest to take up new medicines. If local availability of medicines has in the past been constrained by insufficient funding, how can the noble Lord suddenly be so confident that the postcode lottery will be made a thing of the past?

The noble Lord will know the worry that exists about maternity services. The Government say that they are in favour of home births, yet in recent months 15 maternity units have been closed or have lost their obstetric service and 26 more are under threat. If obstetric services are located more remotely than they were before, how can mothers-to-be safely opt for home births? What undertakings can the noble Lord give that his proposals will not lead to super-sizing of maternity units when the evidence shows that the performance of smaller maternity units is, on average, higher than that of larger ones? Here again, the noble Lord speaks of listening to local opinion, but the whole drift of recent announcements and reorganisations has been towards greater centralisation of NHS services.

When the Minister announced the results of his review of the NHS in London, he famously declared that,

“the days of the district general hospital are over”.

Would he like to take this opportunity to expand on that statement in the context of this review? What are the implications of today’s report for the centralisation of GP services in so-called polyclinics? We did not hear that magic word mentioned in the Statement, but the idea, surely, cannot have been abandoned. I have no objection to polyclinics; what I object to is their imposition on communities without consultation. What is the noble Lord’s view of the place of the community hospital in delivering non-acute care in the community? We have not heard anything that gives us even a flavour of how he believes services, both acute and non-acute, should ideally be reconfigured. The Statement is long on generalities but short on specifics.

The Statement referred to workforce planning, but what answers do the Government have to Sir John Tooke’s review? The MMC implementation represented a monumental blow to medical morale and there is apparently no end in sight to the pressures which gave rise to that debacle. What is the Minister’s proposal for resolving that aspect of workforce planning?

Last year the noble Lord, Lord Darzi, accepted an immense challenge when he agreed to undertake the next-stage review. Whether or not every detail of his report commands agreement among parliamentarians, he has fulfilled that challenge—and on that, he deserves our congratulations. He also deserves to have more time with his patients, which I hope he will allow himself to have. We wish him well.

The Minister knows, or should do, that my party does not indulge in opposition simply for the sake of it. We will support him and the Government whenever we think that proposals for the NHS are right and in the interests of patients. As we celebrate the diamond jubilee of the NHS, our reaction to this report is no exception to that principle. Nevertheless, the Minister’s real success or failure will be judged not by what is on the printed page of this report but by the improvement of the health and well-being of the population and the quality of care that patients receive over the years ahead.

My Lords, I, too congratulate the noble Lord, Lord Darzi, on, I think I am right in saying, the first Statement he has ever given to this House and on the completion of a major piece of research. After what must seem like an interminable gestation, he has seen it successfully launched. It is an important report, a review on which, to a great extent, the hopes of patients and the NHS workforce depend.

Sixty years ago that great liberal, Beveridge, brought to fruition his vision for a health service fit for a nation going through great transitions after the War. When the noble Lord’s review was announced, one particular element within the very long terms of reference caught my eye. He set himself the task of working out how a publicly funded, comprehensive, affordable, high quality health service could be delivered on the basis of need, not the ability to pay. It is that laudable aim that we on these Benches support, and it is that criterion against which all other parts of the report have to be judged.

Like the noble Earl, Lord Howe, I have only just received a copy of the report and am not in a position to comment on it in any great detail. As the report has been heavily trailed in the press this week, however, I want to start by dealing with one issue. Ever since 1948 the NHS has been subject to review after review, all of which have attempted to do the same thing: to reconfigure staff resources and patients in order to achieve better health outcomes and to reduce health inequalities. Practically all those reviews have, in the end, come down to one of two things: either a restructuring of the management of the service or a focus on buildings. Coming as he does from a clinical background, and with the support of clinicians across the piece, I hope that the Minister will be able to avoid the trap in which healthcare is essentially evaluated on the basis of buildings.

I notice that he did not talk about polyclinics in his Statement. We on these Benches will also support them only when they are the result of local decision-making by people in areas who have the clinical and resource data to come to the conclusion that the development of a polyclinic will change for the better the health outcomes of their area.

NICE is one of the achievements of which this Government should be most proud. It is one of the most essential parts of any health service. The independence and authority of NICE should never be undermined. I hope that it will be given the resources necessary to implement the speedier approval process, while ensuring that nothing is done to compromise the levels of our research into pharmaceuticals and new medical technologies. I hope also that, whatever decision this House arrives at on co-payments, nothing will be done to compromise the integrity of diagnostic and treatment processes, so that everybody in the country will continue to have access to the highest standards of clinical judgment.

I was interested to see in the report the proposal for an NHS evidence service. We will wish to look at that in greater detail, but if it builds on the system of national service frameworks which we have had for the past 10 years, where best practice is brought together with new knowledge, and provided that it is backed up by sufficient resources, it will be an important development.

The Minister spoke about innovation and the need for us to use the NHS as power to innovate. He then spoke about staff being enabled to set up social enterprises. I am not sure that I agree with those two things going together. The NHS has been responsible in its time for some of the most marvellous innovations. Embryology, for example, has been taken forward in this country unlike in any other. I hope that the Minister in his proposals is not opening the door to increased private provision within the NHS.

I could not help but notice that there was no mention of mental health in the Minister’s Statement, nor was there much mention of long-term conditions or community care; the focus was very much on an acute care system. If noble Lords have any doubt about that, I suggest they look at the photographs in the report, all of which bar one come from acute hospitals. We will not be able to judge the Minister’s proposals in full until we have seen the proposals for primary and community care. That point was made extensively in the report by Sir Derek Wanless in 2002, and we should not ignore it.

The one other question to arise from the Minister’s Statement was money. How will the implementation of the review be funded? To what extent will its implementation be dependent on the sale of NHS property and land?

We welcome an NHS constitution in so far as it brings about concrete guarantees that nobody in this country will in the foreseeable future suffer health poverty. One of the most telling passages of the report on London of the noble Lord, Lord Darzi, was that in which he charted life expectancy at different stages along a Tube line. In so far as the report brings about greater health equality and reduces health poverty, it will have our support.

My Lords, I am grateful to the noble Earl, Lord Howe, and the noble Baroness, Lady Barker, for their response to my Statement. I have been here for 12 months and constantly learn about protocols and rules. I have been told very firmly that there are strict protocols for Statements being made in the Commons first. The House may wish to change the rules. On this occasion, though, I reassure the noble Earl that I have led this piece of work with a team of Ministers, including my right honourable friend the Secretary of State, to whom I am very grateful for giving me all the space. It is not only me; it is important to highlight that this is not the “Darzi report” but the report of 2,000 doctors and nurses across the country, who have led this review at a local level, based on evidence and in partnership with patients and the public as a whole.

The noble Earl raised a number of important questions and issues. First, on quality, why now? As a clinician who works in the health service, I do not want to sound political, but if I take myself back to the day on which I was appointed in 1994, I can remember arriving at St Mary’s Hospital, where I was the only clinician with an interest in bowel surgery. Now I am a member of a team of four other surgeons, two nurse practitioners, one nurse consultant and two stoma nurses. It is important to remember the state of the health service back in those days and where we are at the moment.

You cannot aspire to achieve quality if you do not have the infrastructure. You cannot aspire to achieve quality without an adequate number of doctors and nurses or without the right environment in which to work. This is our opportunity to refocus what the NHS is all about. What energises me in coming to work every day is to improve the quality of care. What patients want when they see me in my clinics on a Friday or a Saturday, at the most vulnerable time in their lives, during sickness, is better-quality care. Earlier I said that quality was not just about the clinical outcomes that clinicians such as me will have an interest in; it is also to do with patient experience. Being here for 12 months, I have had the constant reminder from noble Lords in this House about issues relating to nutrition, respect and dignity. Those are simple factors that are very close to patients, and we need to have a high regard to them in future.

The quality framework that I described is very detailed. We have never had anything like it before. I strongly believe that it is how we will provide the clinicians with the power that they need in improving what matters most—the quality of care. The noble Earl touched on the issue of morbidity and mortality. We have dramatically improved our outcomes and there is clear evidence of that. A recent publication by Sheila Leatherman in her joint publication with the Nuffield Trust clearly highlights this. Mortality following myocardial infarct in this country has dropped by about 42 per cent, which is the highest drop that any country in the world has seen. But I agree with the noble Earl that we can do better. It is not uniform—and the whole purpose of this report is to help clinicians at a local level.

I could not agree more on the question of targets. That is why I made an explicit statement that there will be no more targets. But let us remind ourselves that targets met the aspirations of the patients who used the service. When you double the investment in the health service, you have to have compliance measures in which you can reassure the taxpayer who is funding the system but, more importantly, the users of the service. Let us again remind ourselves that, on the day when I was appointed in 1994, there was no such thing as standards in the NHS. It was a free for all. I decided which patients came in; patients would wait for 18 months and longer and would sleep overnight on trolleys in A&E departments. We had to have targets and hold the provider end of the NHS accountable for the money that it received in relation to patient care. So the targets will become minimum standards—and, as I said in my report, there are no new targets in that report.

It is important to realise that quality can be improved only at a local level. I have been here for 12 months on a part-time basis, and I reassure the House that no one in Whitehall alone can decide how to improve quality at a local level, or help to do so. Quality needs engagement of staff at a local level, and that is what the report has done. The spirit of the review over the past 12 months has been all about empowering clinicians locally to design models of care based on patient pathways, starting from birth and finishing off with end of life.

I am sure that, once the noble Earl reads the report, he will appreciate that all sorts of other policy themes will address the many good questions put to me about, for example, more foundation trusts—on which I could not agree more. We will be working with Monitor and others to both reinforce what we have been doing over the past 10 years and to have more providers obtaining foundation status. We are also extending that to the community services. This Government introduced the NHS tariff, and we will be working further on it by introducing a normative tariff, paying for the highest quality of care.

There is a lot in the document about practice-based commissioning, and how we free up staff at a primary community level using the practice-based commissioning escalator. On the postcode lottery, we are attempting to expedite the approval of NICE drugs, which now takes on average 18 months to two years and will in future take between three and six months. In addition, the noble Earl referred to our more transparent process, in which PCTs could still approve the use of drugs which have not yet received NICE approval.

I turn to maternity services; the noble Baroness, Lady Barker, also raised mental health and long-term conditions. There are 10 regional reports, each of which has a pathway on maternity services, mental health and long-term conditions. I would be delighted to send the noble Baroness copies, because they highlight local aspirations of how these services should be reported. The noble Earl also raised the future of maternity services. The best people to decide the future of maternity services are local clinicians working on the front line, in consultation with the public and patients. In the future, no one in Whitehall should be in any way involved in this decision-making. That has been the Government’s policy over the past couple of years, and it will be our policy in the coming decade.

I have not mentioned my favourite word: polyclinics. “Polyclinic” was a description of primary community services in London. I was fortunate and privileged enough to work with many clinicians in London. When I did that report, I was a clinician working in London; it was a response to the aspirations of Londoners with regard to improving primary and community services. Since joining your Lordships’ House, it has become clear to me that decisions on the implementation of polyclinics are a local issue. Noble Lords are aware that local consultations with Londoners were carried out for six months. We have made no announcements on further investment in primary and community strategy since the interim report published in October, highlighting 115 new health centres, which we have debated in this House on many occasions. We must increase capacity in primary and community services to meet challenges facing the health service now and in the future.

I remind your Lordships that the life expectancy of a person living in Manchester could be 10 years shorter than the life expectancy of someone living in some parts of London. We must invest more in primary and community strategy because primary and community services have the biggest impact on survival rates and the health of the nation. We also want patients to have more choice in them.

Workforce education and training is another significant area that we have debated in this House. I remember our debate on modernising medical careers, and the dilemmas we have had following the introduction of MMC. I reassure the House and the noble Earl that I have been working with not just the profession and its leaders but with John Tooke himself in designing the workforce planning and education. The relevant document was published today and contains a letter from him, which warmly received the contributions that the next stage review has made, including the creation of Medical Education England.

More importantly, I was asked in the House about the need for greater transparency with regard to funding arrangements. I am delighted to tell the House that we are introducing a tariff system whereby the money will follow a trainee. That is in addition to the other announcements that I made.

The noble Baroness, Lady Barker, asked about innovation. There will be innovation funds at a local level, which is very different from social enterprise. Social enterprise is one way in which staff could be freed up in the future to enhance community services, but we have innovation funds to the tune of £100 million, which clinicians and others will be able to access to make innovation part of everyday working life.

My Lords, as a relative newcomer to the House, I apologise if I have not followed the protocol for intervening in discussion on a Statement. Like many of your Lordships, I was a “baby-boomer” born after the Second World War and have lived through this incredible period of unprecedented and unparalleled healthcare, which is one of the marks of a truly civilised society. Like many people in their sixties, I feel the need for something of a retread. Therefore, I entirely welcome the review and am very grateful for what has been reported to us of it. I have only just received it and have not had a chance to read it in detail. However, I wish to raise two concerns about the Statement and the Minister’s comments.

First, I welcome the Minister’s comments on nutrition, respect and dignity and the references to wider health teams in the context of the promotion of health. The church and members of all faith communities in this country will welcome the reference to wider health teams but will regret the lack of an explicit mention of chaplaincy as part of that. Physical and mental health can be seen only in the context of the wider human and social health of individuals, everything that goes to make up spiritual health. I hope that the next next stage will contain much more explicit recognition of the need to make statutory provision for chaplaincy and not treat it just as a bolt-on or occasional or optional extra.

Secondly, I appreciate the Minister’s reference to bringing down levels of morbidity and mortality. However, the ability to remove death altogether has escaped this Government, and, I suspect will escape all Governments. Death remains the end of life. I appreciate very much the several occasions on which the noble Lord referred to patient pathways from the beginning to the end of life. However, if I am not mistaken, hitherto the one area in which the National Health Service has not been required to demonstrate achievable outcomes in terms of patient experience is the end of life. It seems to me that the way in which we honour and try to set standards for palliative and terminal care is hugely important, and that that should at least be commensurate with what we do throughout people’s lives. The hospice movement is one of the glories—albeit all too often it is rather marginalised from the National Health Service—of our health provision, and needs our support desperately. I hope that further attention can be given to that matter.

I have had a chance to look briefly at the report. Paragraph 70 refers to the need for a service that,

“not only ‘adds years to life’, but also ‘adds life to years’”.

That adequately covers both my points.

My Lords, I am grateful to the right reverend Prelate for the points that he raised. As regards long-term conditions, I am grateful for the support for our plans to meet the challenges of the future. As I said, one of the great successes of the NHS is converting acute illnesses into long-term conditions. Therefore, we are living longer and we need to have a strategy to deal not only with the ageing population but patients with long-term conditions. I could not agree more with the comments about chaplaincies. That is the subject of the social care Green Paper. I recognise the major role that chaplaincies play in the provision of health and social care. I repeat that the 10 regions discussed an end-of-life pathway. The thematic conclusion was that care needs to be more integrated in that pathway. It is probably the one pathway that we will all go through, and health and social care need to be co-ordinated around the needs of patients, and more importantly of their families, to ensure that patients die in their home environment with their family and loved ones.

My Lords, I welcome the Minister’s report today and congratulate him on having reinvigorated positive attitudes to and respect for patients throughout the NHS. Will he explain how the new bodies, NHS Medical Education England and the NHS evidence service, both of which I warmly welcome, will ensure that patients understand the importance of research as a way of providing an increased information database so that they can take sound decisions about purchasing drugs and so on in the future, and so that they understand that researchers are benefiting care and patients are not guinea pigs for the NHS? Does the noble Lord intend to do anything to decrease bureaucracy for those undertaking research evaluation projects?

My Lords, I am grateful to the noble Baroness for her question. I am delighted that NHS Medical Education England and the NHS evidence service have been welcomed. We have a lot to say about research in the constitution: what the patients’ responsibilities are in regard to it and how important it is. As I said earlier, we need to exploit some of the innovations that we have seen in the NHS and, more importantly, to see how we can translate our excellence in science and technology in this country to the benefit of patient care.

My Lords, I too thank the Minister for repeating the Statement. Everyone knows that it is his report, and we do not need to worry about where it was spoken about first. When the papers referred to a tethered goat, his name was not mentioned. However, I assure him that we all know that he is not a goat. I have known him for years, and I know that you cannot tether Ara Darzi.

I welcome the report’s emphasis on quality and standards. However, I have many questions, and an appropriate time should be allocated for a long debate on the report rather than the one hour that we will get today. A quality board will be established, with top priorities for standard-setting. NICE will be asked to produce standards, but it is not clear whether it will set clinical standards. The priorities identified for the quality board, and therefore for Ministers, will be care standards. There are differences between the two, which I know the Minister understands. Although I welcome the establishment of clinical dashboards, they are good for improving clinical care only if the deficiencies identified are met with the necessary resources. Will the Minister say whether they will be?

Lastly, how will the universities be involved in improving the quality of care? I welcome that suggestion.

My Lords, I am grateful to the noble Lord for his points. I shall be brief. First, the National Quality Board will advise NICE on setting standards, which include both minimum standards and clinical standards. We are well aware that NICE works with professional bodies to set clinical standards, but it will have an additional role in kite-marking some of the standards that professional bodies, such as royal colleges, already have.

On the dashboards, we will provide the tools by which we will measure how we empower patients. I referred to measurements by which we will empower patients. Measurements are also extremely important in allowing clinicians like us to improve services. These are dynamic measurements, and we will provide the tools and the clinical team to make this happen.

I believe, for several reasons, one of which being that I work at a university, that the university leadership could be exploited to improve patient care. The universities will have two roles to play. First, they will be part of health innovation and education clusters, providing leadership in education and training. Secondly, they will have a leadership role in innovation in health and social care.

My Lords, since the National Health Service was established, there have been changes in the devolved nature of the Administrations. Although these are welcomed, what arrangements are there for this new, next stage of reform for England to be made known to and possibly introduced in Wales? We do not want to miss out. Would Scotland also be included?

Secondly, for generations, people with neurological diseases and so on in north and mid-Wales have gone to Liverpool; they have crossed the border. Now there is some introduction of a scheme whereby people from north Wales travel not for an hour to Liverpool but for five hours to Cardiff or Swansea. Also, people from mid-Wales go to the Shrewsbury hospitals. What guidelines will the Minister have for those cross-border issues raised, as well as the devolved issues?

My Lords, I thought that my brief was big, but I never thought that I would be dealing with a devolved Administration. However, I reassure the noble Lord that, since the publication of the report, the department has talked to the devolved Administrations to answer at least some of the questions raised—most importantly those about cross-border issues, but also those about workforce planning, education and training. We train and educate doctors and nurses in this country within the five regions, and it is important that we have a strategy in which we bring England, Wales, Scotland and Northern Ireland together in deciding some of the major themes. The devolved Administrations are looking into that.

My Lords—

My Lords, it is this side, I believe.

My Lords, there is time for both.

My Lords, in relation to what the Minister just said about talking to the devolved Administrations, is the constitution that we are told about in the report one for the National Health Service of the United Kingdom or one for that in England? It talks about empowering patients. Patients do not need empowering; they need treatment, understanding and respect. What exactly is the constitution and who is it for?

My Lords, the constitution is for the NHS in England, not the NHS elsewhere. However, as I said earlier, we are talking to our colleagues in Wales and Scotland in relation to it. The content of the constitution is out for consultation today, for 14 weeks. I would be grateful if the noble Baroness contributed to that consultation.

My Lords, I join others in congratulating the Minister on producing a magnificent manifesto, in a sense, for the health service for the next decade.

My first question is on the further information that will be made available for us. I would like to be assured that targets will not disappear completely. As one who uses the National Health Service and does not have private medical insurance so that I can go through the service quickly, I worry greatly that we may slip back to waiting longer for treatment, as we did in the past. It is 10 years since I had cancer, and I knew many people who died then because they did not get treatment as quickly as they should have done. Their cancers moved into different parts of the body; had they had early treatment, they would have avoided those illnesses and subsequent death. I would like some clearer statements from the Government on where we stand on targets because, notwithstanding what is alleged politically about targets, many people feel that they have delivered a great deal and would be reluctant to see them disappear without the knowledge that there will not be any backward movement to longer waiting for different types of treatment.

According to the Daily Telegraph, 1.25 million people have signed up to oppose changes in GP practices. Is the Minister aware from his researches that many people around the country are unhappy with services from their GP practices in a number of respects? He said that there would be better rewards; we are all aware that there have been substantial improvements in the rewards given to GPs in recent years. As part of this openness and greater information and to ensure that we are getting improvements in GP services, will he commit himself and the department to make public at each level the salaries paid to all GPs around the country?

My Lords, I want to reassure my noble friend that minimum standards, which we previously described as targets, will remain, including not only the four-hour wait in A&E but the 18 weeks. Interestingly, many of the regional reports have challenged themselves to further reduce these targets below four hours and 18 weeks. Many services across the country provide services within nine weeks, and the south-west region has a two-hour A&E target rather than four. However, the national standard is four. Information on GP practices will be available. All service providers, whether of acute or primary care, will have to publish the quality measures and, more importantly, information on patient experience and outcomes.

I think that information on salaries is already in the public domain. I am sure that my noble friend is aware that my salary is published as are those of many of my GP colleagues.

My Lords—

My Lords—

My Lords, there is time for everyone to join in. Perhaps we can take the Cross Benches first.

My Lords, I add my considerable gratitude to the Minister for his report, which has very many strong features. He mentioned the mental health pathways in the regional reports. Is there anything in his national review about the need to give greater priority to the quality of service and level of safety in psychiatric in-patient units? If there is no such emphasis on a priority in this area, we will continue to have wards where patients and staff are living and working at risk.

My Lords, the 10 regional reports address the mental health pathways in 10 different regions. In some, they have addressed the issue and certainly challenged themselves on safety. I really want to stress that it is an enabling report. It is not a report that I have designed in Whitehall; it is one that I have built on in consultation with 2,000 clinicians across the country about the tools they need to make this happen.

Safety is a feature of the report, and we are introducing two schemes. The first is “never events”, which will be introduced next year and within which we believe the NHS will not tolerate certain things. The type of events covered still need to be decided. The second is the national patient safety campaign, which covers areas of catheter infection. At a local level, clinicians have challenged themselves under the mental health pathways in addressing safety issues in high-security mental health environments.

My Lords, like other noble Lords, I welcome the Statement and the report. The report is a good one and will tackle many of the problems. I had a particular note about the paragraph on page 4 that states:

“Patients want to be treated in environments that are safe and clean; to be shown respect and regard, compassion and kindness. The highest clinical quality can be undermined by letting the simple things slip”.

The noble Lord may recall that earlier this year I raised with him the question of mixed-sex wards and asked him when they would be phased out, as was promised. He said that the task was impossible at that time. Was the matter given further attention in this review? Can we expect to have a change in government policy that will phase out mixed-sex wards?

My Lords, in the debate that we had then, when the confusion was all about definitions and terminology, I was referring to mixed-sex accommodation. This Government are committed to ensuring the provision of single-sex accommodation and single-sex bays. That will be one of the parameters that we measure as part of patient experience.

My Lords, does the noble Lord accept that quality at a local level depends on the context of the local level? One thing that the founding fathers of the NHS would be surprised at today is the disparity of provision in some of our most deprived communities, which suffer from financial, social and health inequalities. Can anything in his report give the House some succour by suggesting that future targeting in these areas will efficiently tackle some of the deprivation?

My Lords, I am grateful for the noble Lord’s intervention. My report addresses the inequalities that exist in health and healthcare, and the interim report also says that we need nationally targeted campaigns to deal with some of those inequalities. The noble Lord will be aware that the October report referred not only to health centres but to the fact that we are investing £100 million in the creation of new primary care centres in areas where inequalities are most challenging.

moved Amendment No. 89B:

We on these Benches broadly support the amendment. The noble Lord is certainly right to say that this is one of the most important issues, if not the most important one, that arise from the Bill. Clearly, none of us can know at this stage what the effect of personal accounts will be and whether auto-enrolment will undermine existing schemes. It is very hard to disentangle that possible effect from the continuing decline of saving in pension schemes anyway. My only reservation is whether once a year is almost too much of a running commentary on matters which take a little time to become clear and whether every two or three years might be better.

The amendment would require the Secretary of State to report annually on the impact of auto-enrolment; on the take-up of qualifying pension provision; and on the length of time members remain in pension schemes, as well as contribution levels in qualifying schemes. Both noble Lords who have spoken have focused on the importance of seeking to guard against levelling down. We want to do everything that we can to preserve existing good quality provision. I believe that the noble Lord quoted me correctly as regards looking at the qualifying standard: it is the amount of money that goes in; it does not have to be calculated on the same basis as the definition of earnings in the Bill, or the band of earnings.

I am glad that the noble Lord has tabled this amendment because it provides me with an opportunity to outline our plans for monitoring and evaluating the impact of the reforms, which is very important. We are developing an evidence and data strategy to ensure that appropriate evidence is gathered on the pensions' landscape to enable monitoring and evaluation of the Government’s pension reforms. We have already started to engage with key stakeholders through a series of seminars on the current evidence base for pensions. We will publish a report of our work later this year and we plan to continue this dialogue with key stakeholders.

The Government already conduct regular surveys of the pensions' landscape at the industry, employer, and individual levels, including the Annual Survey of Hours and Earnings, which is an Office for National Statistics survey; the Employers’ Pension Provision Survey, a biennial DWP survey of employers; and the Occupational Pension Schemes Survey, an ONS survey of pension schemes, conducted each year. We are also conducting regular tailor-made surveys to track employers’ and individuals’ likely responses to the reforms. These include employers who plan to enrol their employees, anticipated participation rates, planned contribution levels and the likely impact on existing pension provision. A full evaluation is planned once the reforms have bedded in and then on an ongoing basis.

We will continue to work closely with key stakeholders, academics and other relevant government departments as we develop plans for the data and evidence strategy for monitoring the private pension reforms and for monitoring the Government’s wider reforms of the pensions system, including reforms to the state pension in the Pensions Act 2007.

The amendment proposed by the noble Lord, Lord Skelmersdale, would add further requirements on top of the plans that I have already mentioned. A new statutory duty would be placed on the Secretary of State, requiring him to produce an annual report on the impact of auto-enrolment. That duty in those terms may not fit well with the wider evaluation of the reforms and at worst could become a tick-box exercise.

In addition, if we had to adhere to that annual cycle as proposed, there is a risk that the proposed duty would perversely require the Government to impose additional reporting burdens on employers in respect of qualifying schemes. If we were required to produce a further annual report specifically covering participation and persistency in contributions in qualifying schemes, we could not rule out the possibility that we might need to seek further information or more frequent updates from employers, increasing burdens on them. For example, we may need to ask more frequently about participation rates among the job-holder population or the rates of deferred membership among the job-holder population, or the rates of deferred membership and opt in.

We believe that it is important to continue to work with key stakeholders to identify the questions that need answering: what data are already available to identify evidence gaps and what is the most effective way to fill those? It is important to concentrate available resources on a balanced programme of data collection, monitoring and evaluation that has been developed carefully with key stakeholders.

I hope that that has given the noble Lord the clear assurance that we need to monitor and evaluate because in doing so we will build our understanding. However, I do not believe that the proposed narrow annual survey and report is the right way to go. It could, at the margins at least, be counterproductive, and I therefore invite the noble Lord to withdraw his amendment.

I am well aware of the reports that the Government publish around the pensions arena, including those that the Minister mentioned. Although I did not say so, I was trying to get at whether the ongoing evaluation of personal accounts, and indeed the new pensions regime, would automatically be included in those reports. I am grateful to the noble Lord, Lord Oakeshott, for his minor quibble that reporting every year, as proposed in my amendment, would be a bit too frequent. I accept that, but I will read carefully what the Minister said on the existing reports in the pensions arena.

I also note that the Minister will monitor and evaluate the report on the consultation, to be published later this year. Is it the Government’s intention to publish it before we finish proceedings on the Bill?

I cannot give a precise answer to that, but I will check. I can see that it may be helpful if it can be published, but I am not sure that I can give that commitment without checking.

Perhaps I may take this opportunity to say a little more about the qualifying test and how the employer duty is discharged, which was raised by the noble Lord. Employers and schemes will receive plain English guidance on how to apply the qualifying test and to discharge the employer duties. We will consult on the content and format of the guidance. We have research under way to understand the information needs of small employers to ensure that we communicate with them in the most sensible way.

I am grateful for that extra information, but I am afraid that it prompts the same question. I would assume that guidance will not be in final form until 2011, but that will not help the worries of the pension scheme managers, to whom we refer as stakeholders, during the passage of this Bill. Would it not be possible at least to have draft guidance before we finish with the Bill to give an idea of the kind of thing that is expected of employers, and rather more than the Minister has been able to give on our various amendments? That would relieve their minds, and thereby relieve the minds of my noble friend Lady Noakes and myself. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 [Effect of failure to comply]:

moved Amendment No. 90:

I thank the noble Lord for this amendment because it gives me an opportunity to clarify an important point. Clause 30 aims to ensure that there is only one compliance regime for the new duties, which will be enforced by the Pensions Regulator. This means that an individual will not be able to bring an action against an employer solely—I stress, solely—on the basis that he has breached an employer duty provision. It does not affect any pre-existing right of action.

This amendment, which I understand is a probing amendment, removes that provision and enables individuals, alongside the regulator, to take action against the contravention of an employer duty. There will be a role for individuals in alerting the regulator to non-compliance through whistle-blowing, but allowing individuals to take action against employers directly could lead to duplication, confusion and increased employer burden as an employer could face action from the regulator and individuals at the same time.

We fully recognise the need for individuals to have access to other routes for redress if a situation of non-compliance has not been pursued or resolved to their satisfaction. A fairer, less burdensome way of achieving that goal is to enable individuals to make a complaint to the Pensions Ombudsman. The ombudsman may then decide to pursue an investigation. Individuals may already make a complaint to the ombudsman under certain circumstances; for example, where they are an actual or potential beneficiary of a pension scheme. We have tabled an amendment to ensure that jobholders opting out of pension schemes are among the groups of individuals who can make a complaint to the ombudsman. The proposed approach will ensure a clear and consistent compliance regime and minimise burdens for employers while providing appropriate protection for individuals. This amendment would undermine that approach. There is nothing in this clause that affects any pre-existing right. For example, where contributions are set out in an employment contract, the individual will retain the right to pursue missing contributions just as he would be able to pursue any other breach of contract. It is just in relation to the duties arising under the Bill where the Pensions Regulator is put in place to ensure compliance.

That might have been a hopeful opportunity, but it was also a fairly hopeful response. I shall come to this on another set of amendments, but I do not understand the difference between employment law and pensions law in this area and why they should be different. I agree with the Minister that if my amendment made it possible for there to be two prosecutions of the same employer for the offence, that would be total nonsense. I shall read carefully what he said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 90A:

For once, I am almost speechless. I will have to read carefully what the noble Lord has said when Hansard is published tomorrow. My only comment on this large group of government amendments concerns Amendment No. 91A. It would seem to be more appropriate to look for this provision in Clause 77, on definitions, which applies to the whole of Part 1. I offer that only as a thought. I do not expect the Minister to respond at this moment.

On Question, amendment agreed to.

Clause 30, as amended, agreed to.

Clause 31 [Compliance notices]:

moved Amendment No. 90B:

I am grateful to the Minister for explaining these essentially drafting and technical amendments so clearly. I was particularly impressed by his explanation of Amendment No. 90N, which leaves out the regulating power in Clause 31 on compliance notices. I am delighted that the Government have yet again seen fit to agree with the Deregulated Powers Committee.

On Question, amendment agreed to.

moved Amendment No. 90C:

The Minister has just exemplified a saying that I first heard on the west coast of Scotland: “We think better later”. Clearly, he has. However, it occurs to me that as an employer I am responsible for the actions of my staff. Therefore, I wonder what lies behind all this. Perhaps the Minister has explained already who the third party in question is. Therefore, I will have to read Hansard extremely carefully, unless the Minister is able to come back to me now.

I will try. There are two different things here. As I said, although those employer duties will fall overridingly on employers, there could be instances where an employer duty—for example, in relation to the provision of information—might fall on someone who is not technically the employer. There are further provisions where third-party compliance notices can be given, which is where someone might contribute to the failure of an employer duty. The distinction between those two is that, if the individual to whom the third-party notice is given or is due does not have the employer duty, he or she is not in a position to rectify that failure of duty, although there may be other things that he or she can do. Therefore, there is a distinction between compliance notices relating to employer duties, which could cover people other than those who are technical employers, and third-party compliance notices for those who might contribute to a failure but who themselves do not have the employer duty. I am not sure whether that has confused or enlightened the noble Lord, but I am happy to have another go at it if he thinks that that would help.

This looks like another subject for one of the Minister’s famous letters; I am grateful for the four that I received this morning on earlier discussions in Committee. In what circumstances would the third party be liable for compliance? I accept that the Bill says that to an extent there are third parties that are involved in all this, so I wonder whether the Government have their policy right. However, I shall look carefully at what the noble Lord has said.

Perhaps I may try to clarify this a little more. I want to differentiate between compliance notices in respect of failures of employer duties and third-party compliance notices where someone has in a sense contributed to a failure. For example, a third-party compliance notice could be given to a trustee of a pension scheme who has not properly given information to enable the employer duty to be fulfilled. It could also be a payroll provider for the employer who, by not doing something, causes a breach of the employer duties. Those are the sort of situations to which I am referring. However, the individuals or entities themselves would not actually have the duty and therefore there is a need to distinguish them from those who do have the duty. That is why there are two sets of compliance notices.

We are getting a little clearer. I can well understand that the trustee, for example, who has given information to the employer who then acts on it might well be prosecutable in certain circumstances, but I fail to understand why, for example, a member of the employer’s HR department should have a compliance notice issued against him, as I would have thought that the employer was responsible for his employees. I do not want to take this any further because it is a rather abstruse argument. I shall read carefully what the noble Lord has tried to explain three times now, which is probably enough for the rest of the Committee.

On Question, amendment agreed to.

moved Amendments Nos. 90D to 90N:

moved Amendment No. 90P:

moved Amendment No. 90Q:

moved Amendments Nos. 90R and 90S:

moved Amendments Nos. 90T to 90V:

moved Amendment No. 91:

The noble Baroness’s amendment seems fair and sensible. We look forward to hearing from the Minister what a reasonable administrative period would be or whether he thinks that there are practical problems. However, the principle that an employee should get the full benefit of the matching employer contributions if those contributions are delayed through no fault on the part of the employee—and as long as there is not a strong excuse on the part of the employer—seems to us to be the right one.

I start by thanking my noble friend Lady Turner for tabling this helpful amendment, whose intention I agree with. I am also pleased to note the support of the noble Lord, Lord Oakeshott. Clause 33 deals with the power of the Pensions Regulator to issue unpaid contributions notices to employers. This amendment would give the regulator the power, when issuing such a notice, to require the employer to pay interest on the arrears of contributions. When pension contributions are not paid on time, the scheme trustees lose the chance to invest the money on the workers’ behalf and there is a risk that as a result an individual’s pension pot may be smaller over time.

When this matter was discussed in the other place, we accepted the need for some compensatory payment that would put the worker into the position in which they would have been had the contributions been paid on time. We announced our intention to introduce an amendment to require employers to pay interest on late-paid contributions. Clearly it would be difficult, if not impossible, to assess completely accurately the loss of investment value to an individual worker, given the numbers of people involved and the different investment strategies and portfolios of individual schemes and investment managers and so on. However, it would be relatively straightforward to require an employer to calculate and pay interest on the arrears of contributions. Such payments would both recompense workers for the lost investment opportunity and give employers an incentive to pay contributions on time.

The Pensions Regulator’s powers to calculate and, where necessary, estimate the amount of unpaid contributions are set out in Clause 34. While I completely agree with the intention behind my noble friend’s amendment, we think that the ability to require interest to be paid would best appear in Clause 34, which is why we have tabled the government amendment. This will take the form of a power to require interest to be paid. The amendment would give the Pensions Regulator the power, when it issues such a notice, to require the employer to pay interest on the arrears of contributions should certain conditions apply. These conditions, along with the rate of interest and other technical details, will be prescribed in secondary legislation. This will allow for further discussion with the regulator and stakeholder consultation on the detail of how the provision will operate.

I hope that I have assured my noble friend that I agree with the principle that she has raised and I thank her for doing so. Given my assurances that the government amendment will deliver the same intention, I respectfully ask her to withdraw her amendment.

I thank my noble friend for that assurance. I also thank the noble Lord, Lord Oakeshott, for supporting the amendment. He is quite right about what is excessive delay—I understand that. In view of the assurances that the Minister has given, this is obviously a matter for regulation. I am glad that the principle has been accepted and, in those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 91A:

I wish to debate Clauses 33 and 34 standing part in order to ask the Government to explain the relationship between these clauses and the provisions of the Pensions Act 1995. What I am about to say is based on briefing from the Law Society of Scotland.

Clauses 33 and 34 deal with unpaid contribution notices. There are already sanctions and compliance powers in existence under Sections 87 and 88 of the Pensions Act 1995 relating to money purchase schemes. Can the Minister explain why these additional powers are being created in Clauses 33 and 34 and why the existing powers are not adequate?

I cannot see that the Bill repeals any powers in the 1995 Act but it clearly adds powers through these clauses and others. Can the Pensions Regulator act under both this Bill and the 1995 Act in respect of the same issues? Are the Government satisfied that they have not ramped up the regulatory burden on companies in a disproportionate way as a result of the Bill? I look forward to the Minister’s comments.

I thank the noble Baroness. I understand the import of the debate that she wants to have and I shall try to deal with the points she raises.

Clauses 33 and 34 form a key part of the overall compliance regime. Where employers are late in paying contributions, these clauses will enable the regulator to issue compliance with unpaid contributions notices to employers directing them to pay unpaid contributions into a pension scheme. These clauses build on and streamline the regulator’s current approach to following up late contributions and will enable it to deal with the higher volume of late payments expected after 2012. While it is expected that most employers will co-operate fully with the new system, it is possible that a minority will fail to fulfil their responsibilities. The compliance regime will therefore need to take firm action against this minority of employers without imposing unnecessary burdens on responsible employers.

The noble Baroness specifically asked why the regulator needs new compliance powers. The Pensions Regulator has a range of powers under existing pensions legislation, as the noble Baroness asserted. These include powers to issue notices, such as improvement notices, and civil penalties. As noble Lords are aware, the Bill introduces a range of new duties. We expect most employers to comply with those duties and, as now, the regulator’s focus will be on educating and enabling them to do so. But an effective enforcement regime is needed where these initial steps fail.

There are two reasons why new compliance powers are needed to enforce the new provisions. First, they are needed to ensure that the regulator can enforce compliance with the new duties in the Bill—for example, the regulator’s existing improvement notice powers would not apply to an employer who fails the automatic enrolment duty—and, secondly, more streamlined powers are needed to equip the regulator for its new compliance role.

That, in essence, is why the new compliance powers are needed. The noble Baroness asked which powers, if both potentially applied, would be used. The compliance powers provided in the Bill would apply. I hope that has dealt with the point but I shall try again if it has not.

Can the Minister explain why the Government are not removing anything from the 1995 Act if they are producing streamlined and better powers under this Bill? Is there not a case—there is always a case—for removing regulatory burdens, especially where so-called improved versions of legislation are introduced?

It is because the existing powers are needed to deal with the existing business of the Pensions Regulator; these powers are focused on the new duties that arise under the Bill. However, they are still relevant to the other powers and responsibilities of the Pensions Regulator. I have a note of the detail on that which I will be happy to share with the noble Baroness, but I expect there will be no appetite for me to do so at the moment.

The other point to bear in mind is that, to date, the Pensions Regulator regulates an environment where there is voluntary sign-up to pension arrangements. Obviously auto-enrolment takes us into a new era and there are likely to be many new employers coming into pension provision for the first time. I think overwhelmingly they will be supportive of it—some may be reluctant and will need support and guidance initially—but there will be a need for streamlined powers to enforce compliance where not.

The Minister has revealed his true clothes. We are back to, “All employers are potentially evading their responsibilities and so we have got to have bigger and better powers to bash them with”. I regret that the Minister has replied in those terms.

Clause 33, as amended, agreed to.

Clause 34 [Calculation and payment of contributions]:

moved Amendment No. 91B:

My colleagues in another place will be delighted that a clause of this sort is now to be included in the Bill, and I congratulate the Minister on moving this amendment, to which I do not object—but I have a problem. He said that employers could be made to re-enrol a worker where they have persuaded him to opt out with either financial inducements or any other inducements, perhaps payment of overtime. When all that is settled and the employer is clearly in the wrong, it may be that the worker in question will still want to opt out, now of his own volition. Has the Minister considered what would happen then in relation to Amendment No. 106A?

I can see that those circumstances might arise, and I do not see that they would be precluded. This clause says right at the start that,

“An employer contravenes this section if the employer takes any action for the sole or main purpose of … inducing a worker”,

and so on. If they originally took that action to induce a worker, the matter has been rectified and the worker has been enrolled but then decides to opt out, I do not fundamentally see a problem with that. There would be issues regarding evidence and the facts and circumstances of a specific case, but the opt-out should not be precluded in the circumstances the noble Lord suggests.

Obviously it is the worker’s absolute right to opt out, whether or not an inducement has been offered or even received. My question was directed to the effect of compliance, but if the Minister is saying that if a wrong has been committed, no matter what happens afterwards, whatever compliance notices, fines and so on are produced from the regulator, then I understand that point of view. I was just trying to clarify what the Government were actually thinking in this area, but I suspect that there is no point in pressing the point now.

I will reflect further on that point because it is an interesting one. However, if we are talking about the same act of inducement that first time around caused the employee to opt out, but after a compliance notice the employee was then auto-enrolled into an auto-enrolment scheme and then chose to opt out, one would have to consider the juxtaposition of those events and whether effectively the first inducement so tainted the subsequent decision that it was wrapped up in it. One would need to go into more detail. I am happy to do that and discuss it with officials. It is a practical matter; if there is evidence that there was inducement the first time around and there was an opt-out that followed pretty swiftly afterwards the second time around, there might be some difficulty with evidence. We will have a look at that; the noble Lord might even receive one of my letters on that subject.

I am very grateful.

On Question, amendment agreed to.

moved Amendments Nos. 91C to 91E:

moved Amendment No. 92:

If this amendment is agreed to, I cannot call Amendment No. 92A.

I am grateful to the noble Lord for raising the important issue of the policy on restitution. As we have already discussed, making contributions to pension schemes in full and on time is vital to the growth of the individual’s pension fund. This is one of the key intentions of the compliance regime and the focus of this subsection of the Bill.

Where employers are late in paying contributions for a short period, which will be set by regulations, we propose that they be required to pay only backdated contributions. Their worker can choose whether to pay their own missed contributions and elect to do so in instalments. However, where an employer is late paying contributions for a longer period, the worker may not be able to pay arrears of their contributions. Without the worker contributions, an individual’s pension pot will be significantly smaller over time.

In this situation, it would be unfair if workers were disadvantaged by their employer’s failure to pay contributions on time. Therefore, where the contribution arrears are for a longer period, the employer may be required to pay both their own arrears and those of their worker. As well as being fair to the worker, it should act as a strong incentive for employers to comply and pay contributions on time. The principle behind the clause is supported by a range of stakeholders, including Help the Aged, the TUC and Which?. Certain stakeholders, including Help the Aged and the TUC, have suggested that the period be three months. However, before we identify a period, I want to discuss it fully with stakeholders, including business organisations.

The amendment would remove the requirement on employers to restore missed worker contributions even where they had been non-compliant for a long period. It would mean workers ending up with a smaller pension pot, which, I am sure we all agree, would be undesirable. In addition, as I have just said, it would reduce the incentive for employers to pay on time and mean that scheme members lost out on the investment value of their contributions. I therefore urge the noble Lord to withdraw his amendment.

I described it as a probing amendment and it was a real description—noble Lords might think, “for once”. However, I still find a little confusing in paragraph (c) the words

“on the employer’s own account”

and shall read carefully what the noble Lord, Lord Tunnicliffe, said. I assume that it means for both of them, as I said in my opening remarks, but if I am wrong, I will no doubt get the answer from my reading of Hansard. I therefore beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendments Nos. 92A to 92F:

moved Amendment No. 92G:

moved Amendment No. 92GA:

I congratulate the noble Lord, Lord Skelmersdale, on his hard work in drafting this, and for the extensive evidence of what is going on in DBERR. I am sorry that I am not as au fait with that as I should be. However, I am bound to say that this seems a pretty light slap on the wrist—or, should I say, half a slap on the wrist with the 50 per cent discount. I look forward to hearing what the Minister says, but the Conservative approach is rather lenient here.

I thank the noble Lord, Lord Skelmersdale, for this amendment. I understand that it is by way of a probing operation. He has raised issues about the penalty provisions in Clauses 35, 36 and 51. I shall also respond to his request for a clause stand part debate on the escalating penalty provision in Clause 36.

These are important provisions, and I thank the noble Lord for giving the Committee the opportunity to examine them more closely today. It may assist our consideration of these amendments if I begin with an overview of the compliance regime and the role of penalties within it. While we are confident that the majority of employers will meet their new duties, we need an efficient and effective compliance regime to maximise compliance. The proposed approach comprises three stages: educating, enabling and enforcing. The emphasis is on educating and enabling employers to meet their duties; only when that fails will the Pensions Regulator take proportionate, graduated enforcement action. That action will start with statutory notices, moving to fixed and escalating penalties if non-compliance persists. The availability of financial penalties will therefore play a small but significant role in securing compliance and enabling jobholders to access pension saving.

I understand that the noble Lord has tabled some of these amendments to explore why we have not adopted the same legislative approach and penalty structure as in the revised national minimum wage regime set out in the Employment Bill. Before addressing each of his amendments, it may be helpful to set out why our approach differs from the proposals for the minimum wage.

I reassure noble Lords that the compliance regime for the reforms in this Bill will accord with good practice and available evidence. We are building on analysis of other regulatory regimes, not only the minimum wage regime but also the compliance approach for PAYE requirements; the Companies House regime for ensuring that corporations file their accounts; and, internationally, the approach taken for the superannuation scheme in Australia. We are further developing the penalty regime in line with the recommendations of the Macrory review and with regard to the regulatory principles of transparency, accountability, proportionality and consistency.

There is no doubt that we are at a different stage from the national minimum wage regime, which is now in a position to place more specific provisions in the Bill in the light of practical experience and the data accumulated on the enforcement approach. That approach cannot be replicated for an entirely new regime. We have been clear on the maximum penalty levels, which are set out in the Bill and have broad stakeholder support, but the actual penalty levels should be set out in regulations. That will enable adjustments to be made below the maximum level in the Bill when it becomes clearer which approach is most effective. It will enable detailed consultation with the regulated community, and other stakeholders, on the structure of the penalty.

On the specific amendments tabled by the noble Lord to Clauses 35 and 51, since the provisions of the Employment Bill were carefully tailored to meet the needs of the national minimum wage regime, some problems arise when they are translated into the context of our new regime. For example, reducing the £50,000 fixed-penalty ceiling to £5,000 in Clauses 35 and 51 would make the regime out of step with the regulator’s current powers. Under Section 10 of the Pensions Act 1995, the regulator has the power to impose fines of up to £50,000. We believe that it is important to ensure that complying with the new duty is seen to be as important as complying with existing legislation. Several stakeholder groups, including the CBI, have indicated their broad support for this decision.

Secondly, the noble Lord’s amendment to Clause 35 would calculate penalties associated with unpaid contributions based on the amount unpaid, just as the Employment Bill calculates penalties based on the amount of underpaid wages. However, in the pensions context, we have a series of related duties, and there are practical implications of different breaches carrying different penalties. For example, an employer who does not automatically enrol one of their workers into a qualifying scheme inflicts much the same harm as an employer who does not pay over the relevant contributions to a scheme. It is therefore unclear why they should be treated differently. We are not ruling out the possibility of tying penalties in certain circumstances to the nature of the contravention. However, we would like the opportunity to conduct full preparatory research and engage in formal consultation first.

Thirdly, the noble Lord’s amendments to Clauses 35 and 51 place an early-payment discount in the Bill. Such a discount is a common feature of penalty-based regimes, and is a strong candidate for inclusion among the options to be brought forward in our consultation and regulations. Early-payment discounts promote rapid compliance, which is why the Government felt that it was crucial to place this in the Bill in the national minimum wage context. Time is of the essence when we are talking about remedying shortfalls in the pay packets of some of the most vulnerable workers in our society. The implications are not identical with reference to late payment of pension contributions—but, again, this is a strong candidate for inclusion in our regulations.

I hope that I have reassured the noble Lord with regard to the amendments tabled to Clauses 35 and 51. On the amendments to Clause 36, a similar question of penalty caps is raised in relation to escalating penalty notices. The amendment would cap the total amount payable for a single breach at £50,000. I shall explain why we chose to cap the amount of the daily escalating rate at £10,000 but not to cap the total amount payable under these notices. The essence of an escalating penalty is that its value directly reflects how long an employer continues not to comply. Such penalties will be applied only in cases of very persistent non-compliance. We are not alone in recognising the benefits of including escalating penalties in our toolkit; other regimes such as HMRC PAYE also have the option to issue them. I share the noble Lord’s concern that penalty levels should be proportionate and fair, but am concerned to maintain the intention that escalating penalties directly reflect the extent to which an employer delays meeting their responsibilities. A cap on the escalating penalty would effectively cap the period within which employers are deterred from continuing to breach their duties.

As for the noble Lord’s second amendment to Clause 36, the intention is to ensure that daily escalating penalties are issued only if an employer effectively ignores a preceding fixed penalty. I assure him that we have always envisaged a sequential issue of penalties as part of the wider graduated approach. However, there may be cases where the recipient of a fixed penalty notice may pay the penalty but does not put right the situation that caused it. In these circumstances, the regulator will require the option of issuing escalating penalties to ensure compliance.

I hope that I have reassured the noble Lord, and that he will withdraw these amendments, which I understand are probing in nature. I have set out the background to why these provisions are in the Bill in this form.

I am grateful for that long and fairly explanatory answer. I accept that there are already powers in previous legislation to allow the regulator to impose fines of up to £50,000. Can the Minister tell me whether the regulator has any powers to use escalating fines thereafter?

A compliance regime must be both efficient and practical. There will be small differences with the national minimum wage. However, the regulator having the power to impose £50,000 in certain circumstances does not mean that we could not take the opportunity of the Bill to review whether that has been effective, and whether £50,000 is the right level. How many times has the regulator used the maximum fine? If he has not, that is a good reason to look at the whole thing again. I am glad that the Government are prepared to look at a 50 per cent reduction for paying the fine early and consult upon it—the least that they could do under the circumstances.

I said this was a probing amendment and I meant it. Unless the Minister wants to come back to me, I shall withdraw it now.

I do not want to deter the noble Lord from withdrawing his amendment, but it might be helpful if I deal with a couple of points that he has raised. He asked whether there are currently escalating penalties. I understand that there are not. Penalties in the Bill should not generally signal a review of the Pensions Regulator’s powers. I presume that consultation and discussion of these powers might at least butt up against that.

On the argument that a system of penalties would put firms out of business, the primary aim of the compliance regime is to encourage the employer to comply. Financial penalties are only one of a number of tools to help us to achieve this. The compliance regime is designed to ensure that employers can make redress or put things right in the first instance. Penalties would only be imposed when employers continue to breach requirements after they have been told how to comply. The regulator will have some discretion on whether to enforce the payment of the penalty. In situations where the employer can demonstrate to the regulator that he is at risk of becoming insolvent if he pays the penalty, the regulator could exercise that discretion; for example, the regulator could withdraw the penalty to allow the employer to pay any outstanding contributions.

I am grateful. Clearly, however, the Bill contains a ratcheting-up of the compliance regime that already exists within the pensions framework, albeit for a slightly different purpose. I will have to look at that extremely carefully. I said that I would withdraw the amendment, and I will. However, I certainly reserve the right to bring back the issue in one form or another, perhaps one not directly relevant to the national minimum wage, at the next stage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 92H:

moved Amendment No. 92J:

moved Amendments Nos. 92K and 92L:

moved Amendment No. 93A:

moved Amendment No. 94:

The Bill gives the Pensions Regulator power to review all notices that it may issue as part of the compliance regime. This includes compliance notices, third-party and unpaid contributions notices and fixed and escalating penalty notices. This provision is an important safeguard for those receiving such notices. The review will be wide-ranging, giving the recipient an opportunity to explain their case and provide further information that might be relevant to the decision to issue the notice.

The noble Lord has tabled two amendments to this clause and I am grateful to him for the opportunity to discuss the review process. With regard to the first, as my noble friend indicated, he echoes the House of Lords Select Committee on the Constitution, which has recently written to us on this matter. As the Bill stands, the regulator is allowed to suspend proceedings in relation to a notice while that notice is under review, but retains the discretion whether to use this option. Our approach throughout the compliance provisions of the Bill has been to give the regulator powers rather than obligations. This is intended to ensure maximum operational flexibility within the regime’s broad principles.

However, we take seriously the concern to ensure that, to quote the Constitution Committee,

“a branch of government should not be empowered to enforce sanctions against a person who disputes the factual or legal basis of the action in question”.

We are therefore further considering the rights to redress in light of the committee’s questions and will return at Report to present the final strategy to the House, with amendments if necessary. As I indicated, the Constitution Committee raised important questions in addition to that of a stay of proceedings. These relate to the absence of a right of appeal to an independent tribunal against certain notices, the opportunity to make representations before a notice is issued and the relationship between civil and criminal penalties. We are grateful to the committee for raising these important points, to some of which we responded last week.

In our response to the committee, we made a commitment to give further consideration to appeal rights, employers’ ability to make representations before statutory notices are issued, stay of proceedings where a review or appeal is under way and the regime’s approach to criminal proceedings. We are keen to continue this dialogue to ensure a satisfactory conclusion for the committee. I understand that the exchange of correspondence with the committee is placed in the Library. If that is not the case, I shall ensure that it is. I apologise for not making sure that noble Lords were aware of that before this debate, but this is work in progress. The noble Lord’s focus is consistent with the committee’s position. We need to look at this and perhaps bring forward amendments.

The noble Lord asked me about subsection (6)(b) and how substituting a different notice was different from confirming, varying or revoking a notice.

I asked what the difference was between varying a notice and substituting a different notice, because if you vary one it is by definition a different notice.

That is the point that I was trying to address. It seems to me that one example might be if one moved from an escalating penalty notice to a fixed penalty notice. That would involve substituting a different notice from the one that existed previously. Therefore, you are not confirming or varying that although you might be revoking it at the same time. I think that you could substitute something that was not a variation of the notice that previously existed. Therefore, I do not see how the noble Lord’s problem arises, but I am not sure that we need to get too engrossed in that. However, on the substantive—

Surely if a notice has an escalating penalty and you change that to a fixed penalty, that is varying it, is it not?

We are getting into semantics. It is a different form of notice. In some circumstances it may be appropriate to substitute a new notice. For example, the regulator may issue a compliance notice for failure to auto-enrol an employee, but if that employee leaves while the notice is under review, the regulator may then choose to revoke the compliance notice and issue an unpaid contributions notice. Varying a notice might comprise changing the amount of unpaid contributions. There is a distinction, which we could debate for the next hour or so if we wished. However, in substance, the point made in the noble Lord’s amendment chimes with the position taken by the Constitution Committee. We shall need to engage further with a range of issues and return to them on Report.