Pensions Bill

Public Bill Committee, 20 April 2004.

Standing Committee B

Pensions Bill

Nigel Waterson (Conservative, Eastbourne)

On a point of order, Mr. Cran. First, I welcome you back to our proceedings in Committee. I hope that you had a refreshing and enjoyable Easter break, as I am sure we all did although it was marred slightly by a raft of Government new clauses and amendments that were tabled only last Thursday. I wish to flag up some issues concerning where we are with the Bill. You will know that a motion was tabled on the Floor of the House last night to extend our debates in Committee for another week and that no doubt there will be pressure to hold a meeting of the Programming Sub-Committee.

I wish to give the Minister a chance to update the Committee on where matters stand at present. The Government have dealt with section 67 simplification and consultation. They have said that other issues, such as defined contributions and limited price indexation, might be dealt with on Report. However, I wonder what else—if anything—of any significance will be proposed. I am not talking about minor drafting or consequential amendments; what amendments of any significance are likely to be tabled by the Government in Committee?

James Cran (Conservative, Beverley and Holderness)

Of course, that is not a point of order for the Chair, but doubtless those who can deal with it will respond to it.

Malcolm Wicks (Labour, Croydon North)

Further to that point of order, Mr. Cran. Will it be helpful if I respond briefly to the hon. Gentleman's points? I wish first, however, to welcome you back to the Chair for our final sittings. Members of the Committee will be aware that, at the end of our sitting on Thursday 1 April before the recess, I outlined the amendments that we planned to table for discussion in Committee. I am sorry that we were unable to table all the amendments during the recess, but we have been considering our plans. The Committee will note that some of the new clauses are on the amendment paper and, subject to progress, we may reach some of them today. After the bank holiday, we sent a briefing note to hon. Members about the new clause that will amend section 67 of the Pensions Act 1995. As they are aware, it deals with the modification of accrued rights.

However, I understand that some confusion arose about the briefing note on the new clauses that deal with the requirement for employers to consult on future pension changes, so we sent out again a briefing note about it last night. An explanation of new clause 33, entitled ''Increase in age at which short service benefit must be payable'', will be available at the end of this morning's sitting. The other amendments that have been tabled are self-

explanatory. I must apologise to you, Mr. Cran, and to members of the Committee for the delay in tabling the new clauses and for any confusion concerning the distribution of briefing notes. No discourtesy was intended, as no one gains if a Committee has insufficient detail on which to judge its scrutiny.

Nigel Waterson (Conservative, Eastbourne)

Further to that point of order, Mr. Cran. I am sure that my proposal will be of assistance to you and the Committee. Yet again, the curse of the briefing note has kicked into our proceedings. I have not seen either of the briefing notes to which the Minister referred. I have been trying with a wet towel around my head to understand the section 67 stuff, which I doubt we will reach today. However, it would be nice to know the thinking behind it.

Malcolm Wicks (Labour, Croydon North)

Further to that point of order, Mr. Cran. I apologise again if briefing notes have not got through. I think that the hon. Member for Northavon (Mr. Webb) received the information and I know that those in my office were telephoning the office of the hon. Member for Eastbourne (Mr. Waterson) to see how we could best get information to him during what was inevitably a difficult period over the Easter holiday.Clause 167 Meaning of ''reviewable matters''

Clause 167 - Meaning of ''reviewable matters''

James Cran (Conservative, Beverley and Holderness)

With this it will be convenient to take Government new clause 16—Meaning of ''reviewable matters''—and Government new schedule 1.

Nigel Waterson (Conservative, Eastbourne)

I wonder whether the Minister would take us through his new clause. It may be helpful, and afterwards I can raise certain issues.

Malcolm Wicks (Labour, Croydon North)

We have discussed the main ideas of setting up a pension protection fund. We are now about to deal with some important consequential matters, after which we shall deal with issues regarding the new pension protection fund ombudsman. We have now had 16 sittings in Committee and, subject to the will of hon. Members, we may have six or so more sittings. As we expected, the Committee's proceedings are turning into more of a marathon than a sprint. That enables me neatly to note and congratulate the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Grantham—Gravesham—

Chris Pond (Labour, Gravesham)

Gravesham.

Malcolm Wicks (Labour, Croydon North)

Gravesham. Grantham is associated with another notable parliamentarian. I congratulate my hon. Friend on completing the London marathon in four hours and 15 minutes. He tells me that that was slightly worse than last year, but he was drafting new clauses as he was running.

Nigel Waterson (Conservative, Eastbourne)

The chicken?

Chris Pond (Labour, Gravesham)

The hon. Gentleman referred to the chicken. It was a little disconcerting at 19 miles to find

myself with a rhinoceros and three chickens still in front of me. Although this Committee's proceedings deprived me of the time to do the training necessary to improve on my previous time, they prepared me in other ways. The marathon was sometimes a painful event, and it took a long time. At the end, one ended up in the place in which one began. In that sense, experience of this Committee prepared me well.

Malcolm Wicks (Labour, Croydon North)

The intention is to replace clause 167 with new clause 16, which would provide a list of pension protection fund board decisions that could be disputed. The Government amendments have the following objectives.

First, as a drafting point, we have decided that, as the list of reviewable matters is extensive, it would be best placed in a schedule: new schedule 1. Secondly, the new schedule would extend the list of reviewable matters. Thirdly, new clause 16 would allow regulations to delete items from the reviewable matters list, if that was required. Finally, the new clause would provide a mechanism for determining whether the board had failed to reach a decision by reference to a prescribed time limit.

I do not intend to discuss each individual addition to the list of reviewable matters in detail; to do so would take up a great deal of valuable time. However, I would like to make the following point. As well as adding to the list of reviewable matters, the list would now include the failure of the board to reach determinations in certain circumstances.

If, for example, the board failed to determine a person's entitlement to PPF compensation within a prescribed period, that person would be able to ask the PPF board to undertake a review. The general intention behind the list of reviewable matters is to make clear in legislation which of the board's decisions could be challenged. On the face of it, it may seem reasonable to allow any board decision to be challenged, but there are good reasons for the dispute procedures to have relevant parameters.

For example, the fact that a compensation rate of 90 per cent. is payable to non-pensioners is not open to dispute, because it is set out in legislation. It is the calculation used for all, and there can be no deviation from it. Allowing such a decision to be challenged would result in delays and raise expectations that a different outcome was possible when it was not. Although PPF members would be unable to challenge the 90 per cent. compensation level, other matters regarding their compensation rate could be challenged. For example, if the board had based someone's compensation rate on 10 years' rights when they had had 20 years' rights, that, of course, could be disputed.

In a similar vein, schemes would be unable to dispute the formula used for calculating the levy. However, they would be able to challenge the board's decision that they were an eligible scheme and therefore had to pay the levy. If the levy calculation had been based, for example, on an incorrect

membership number, the scheme would also be able to challenge the amount of levy payable.

The clause aims to provide a procedure for dealing with PPF disputes that is fair and transparent, and that provides clarity of approach for people to raise disputes if they have a right to do so. It sets out those matters that may affect the civil rights of interested parties, and provides the basis on which actions may be challenged.

Nigel Waterson (Conservative, Eastbourne)

I add my congratulations to the Under-Secretary on his achievement. I hope that he raised a great deal of money for his favourite charity.

One of the briefing notes that has reached me, and I am grateful for it, is about the complexities of clause 167 and new clause 16. Let me say two things at the outset. First, I can see the logic, from a drafting point of view, of re-casting that as it has been done. However, it has the maddening effect, which is familiar to all hon. Members who have dealt with large Bills, that when we re-cast our amendments on Report we will have to change all the numbering. But we cannot have everything—at least, not in opposition.

Secondly, I should like to make another substantive general point, which I will, perhaps, develop in more detail on clause 168 to put in context my remarks on new clause 16. Do we need a review? We are in danger of developing a cumbersome and bureaucratic system. We will deal with the role of the ombudsman and everything else later. The Government are trying to mirror the provisions of the European convention on human rights and have been nervous about getting out of kilter with what that proposes. However, we are creating a new bureaucracy, when the answer is, perhaps, to cut out the review and go straight to the next stage. I will develop that point in a moment.

There are a few points arising from what the Minister said on the helpful explanatory note. If there is to be a review, it is most important that the list sets out those issues where the board has failed to reach determinations, let alone where it has made the wrong determination. One of the clear examples in the explanatory note is where the board fails to determine a person's entitlement to PPF compensation within a prescribed period. On a human level, that will be one of the most important reasons for having such reviews—and another good reason for trying to short-circuit the system. However, we are considering another part of the Bill, which will be heavily underpinned by regulations later on. I will not even raise the grant regulations, because I have long since given up on that.

Although it is difficult to get a handle on the time scale that Ministers, for example, might have in mind, perhaps I may use this example to draw the Minister out. This is a clear case of somebody who may be in personal difficulties because they have not been given the compensation to which they are entitled, their company has gone bust and their pension scheme has left them high and dry. What time scale is envisaged for trying to deal with such issues? Presumably, some issues would be relatively easy to deal with and could be dealt with rapidly on the basis that they were simply book-keeping or technical errors by those running the

system. For example, the Minister mentioned the question of 10 or 20 years. The note talks about trying to produce clarity of approach. I am concerned—I shall develop this in a debate on another clause—that we shall get into a confusing, rather than a clarity-inducing, situation.

Paragraph 3 of the schedule, which, as the note says, was omitted from the list in clause 167, deals with the question of the scheme's trustees having to apply to the board to assume responsibility if they think that

''the employer is unlikely to continue as a going concern, and . . . the prescribed requirements are met''.

That is set out in clause 101(3). There is a similar provision in subsection (4), and so on. That is an important provision, so why was it left out? Perhaps there was a reason why, at the time of first drafting, it was thought that it was not appropriate for this part of the Bill.

Another issue arises in paragraph 5 of the schedule—formerly clause 167(d)—which has now been set out in different wording:

''a scheme that is eligible to enter the PPF should not start to wind up during an assessment period if it has insufficient assets to meet its PPF level of liabilities. The Board may validate . . . the action of a scheme's trustees or managers to wind up the scheme''.

That significant decision has to be made by the board. Is there any view that there should be a fast-track way of dealing with that kind of determination and review, where there are problems with a scheme? I congratulate the Government on belatedly putting forward the regulations relating to wind-ups. We look forward to debating those, I hope fairly soon. I believe that those regulations are due to come into force in May; that is good news, albeit belated. There is some read-across to paragraph 5 of the schedule. Is there any way of having a fast-track approach to dealing with the matters?

Another important point relates to paragraph 10. As I understand it, that paragraph includes a brand new provision, although I may stand to be corrected. The provision follows the introduction of the large schemes requirement. According to the notes,

''Where a scheme rescue is not possible for a large scheme and the scheme has sufficient assets to meet its PPF level of liabilities, the trustees or managers must apply to the . . . Board for authority''.

That is an important decision. It will be interesting to hear from the Minister how that relates to the relationship between the PPF level of liabilities, the statutory funding requirement and the requirements of FRS 17; we have already touched on the subject.

I will give a final example, because from anyone's point of view, the redrafted schedule is pretty voluminous. Paragraph 14, formerly clause 167(j), is about the

''determination . . . of a person's entitlement to compensation''.

That partly relates to a point that I made earlier. A person might challenge the number of years of accrued rights on which his compensation is based. That strikes me as another clear example of something that could affect a person significantly. Is there not an argument for a fast-track approach to the reviews, or for some

reviews to move faster than others? Does the Minister have an idea of an overall global time scale in which the matter should be resolved?

The note makes it clear that the formula—and so, for example, the 90 per cent. figure for non-pensioners—cannot be disputed. However, there may be a genuine dispute about the number of years' accrued rights, about how someone's compensation is calculated, or even about someone being denied compensation. Those issues must be resolved rapidly, either by cutting out the review stage altogether—that is an option, and we will perhaps say more about it later—or by ensuring a fast-track method of challenge for those concerned. I hope that that is helpful.

As I say, I entirely understand the logic of how the provisions have been recast. It is helpful to have so much more detail included, but many details are still out there somewhere in draft regulations.

Steve Webb (Liberal Democrat, Northavon)

Whereas many of the provisions that we will consider raise issues that had never been in the Bill, new clause 16 is a second go at an issue that was always in the Bill, and was botched the second time round. That is slightly worrying. It is a little worrying that, probably only a month or two after the clause was first written, it was realised that there were holes in it, and it had to be rewritten.

I asked my children in which of the Wallace and Gromit stories the characters are rushing down a railway track, furiously laying down track before the train can get to it. [Hon. Members: '' 'The Wrong Trousers'.''] Yes, that is right; other hon. Members have children, too. My feeling is that the Bill is very much a matter of the Government trying to get to provisions before the Committee does. The ink is sometimes still wet, and it is still wet on new schedule 1. Does the Minister have any reflections on that subject?

Occasionally, the Opposition's draft clauses and schedules are not quite perfect when they emerge from the womb. However, this measure is not very contentious: the PPF has a job to do, and if it does not do the job, one asks it to look at the matter again, and then one goes to an ombudsman. That does not sound particularly complicated, yet here we are, rewriting it within a few weeks of its first being written. That is slightly disturbing. Will the Minister comment on it? How confident is he that the rest of the Bill will survive more than a couple of months once it is in action?

As I understand it, one of the main changes in new schedule 1, as distinct from the original clause 167, is that people can ask the board to look again when it has failed to do something, not merely when it has done something wrong. That raises the issue of timetabling and time scale, which are referred to in the explanatory notes. When a company goes out of business and its pension fund starts to be wound up, people face the elastic problem of how long it will all take before they know where they stand. New schedule 1 is trying to tackle that point by saying that when things have gone on too long, people can go to the board and say, ''You haven't done this. How about

it?'' The board might shuffle its feet nervously, and people could then go to the ombudsman.

Can the Minister give us some indication of the time scales that we are talking about? We are setting up the pension protection fund. If my medium-sized but fairly smallish employer with a typical scheme goes out of business today and the scheme falls into the hands of the PPF, how long will it be before I know where I stand? This new schedule gives me powers to go to the board if a decision has not been made in a prescribed time, but we do not know how long that period is. Will the new schedule apply after days, weeks, months or years? Some schemes take years to wind up. For people who have lost their pension rights, will the PPF represent a speeding up in working out their new entitlements, or a slowing down? Will the fact that the PPF is involved mean that people are left in limbo for longer? It all depends on what the prescribed time is.

A problem linked to that, which seems germane, is getting hold of information from the Department for Work and Pensions when schemes are wound up. Will the PPF have any privileged position in getting hold of information from its sponsoring Department so that schemes can be wound up and people can be told what they are entitled to more quickly? Will the fact that the PPF has been set up by the DWP—albeit at arm's length—mean that people can get information and know where they stand more quickly? Stepping aside from the minutiae of the list in the schedule, the point is that when workers have lost their job or their company has gone out of business, they want at least to know what their pensions will be. We do not know from the schedule how long they will have to wait, or whether the whole process is longer or shorter. I have no understanding of the big picture, so I hope that the Minister can share his understanding.

Malcolm Wicks (Labour, Croydon North)

This has been a useful discussion. We have opted for a two-stage review process for the PPF, as we believe that that strikes a reasonable balance between fairness and administrative efficiency. Errors occur in any organisation, and although we intend to keep those to a minimum in the PPF, it is more efficient for straightforward reviews to be dealt with by the original decision maker. The hon. Member for Eastbourne had some doubts about whether we needed a two-stage process, but I argue that, particularly for errors—or rather, alleged errors—that are relatively easy and quick to resolve, resolution is best done as part of an internal review.

If the complainant remains dissatisfied with the outcome of the first-stage review, a second-stage review can be requested. That will be carried out by a specially constituted committee of the board to be known as the reconsideration committee. In terms of scale and administration, the PPF will be much larger than occupational schemes, and we recognise that compelling schemes to have a two-stage process is not always administratively efficient. We have therefore agreed that schemes should be able to have a single dispute resolution process, provided that the decision on the dispute is reached by the scheme's trustees and is not delegated.

As for how long the process will take, obviously we want disputes resolved as quickly as possible. We want to avoid unnecessary delays. Some PPF board decisions cannot be unpicked at a later stage—for example, the decision to take a scheme into the PPF. It is therefore important to allow those involved the right to an impartial review. Only then can we be 100 per cent. sure that the right decision has been reached, and that all the relevant information has been taken into account. It is therefore possible that if a PPF decision is disputed, it could take longer to reach the final decision—after all, we are talking about important matters. In such cases, compensation will remain in payment until the final decision is made.

Steve Webb (Liberal Democrat, Northavon)

I want to make sure that I have explained myself clearly. My question about time scale was not so much about situations in which something is done, but those in which something is not done. If the PPF gets involved, it might take a long time for it to do its sums and get the information, but if nothing is done, people can go to the PPF board at some point and ask for a review. I want to know how long things can go on for before people have the right to go to the PPF board.

The question is how long the whole process of getting anything done at all can take, rather than how long it takes to query something that has already been done.

Malcolm Wicks (Labour, Croydon North)

I understand that question, and its importance. I am bound to say that to some extent many of those matters and the detailed questions will have be left to the PPF. It will be its task to develop good practice and possibly to consider whether to set targets. However, we will put time limits in regulations, and they can be revised if necessary, with a view to ensuring that the PPF board provides an effective and efficient service to its customers. We will have to consider how detailed those regulations will be, because it would be wrong to make in Committee decisions on minutiae that would be best left to the board. I hope that hon. Members will realise that we want decisions to be made as quickly as possible, provided that that is compatible with the seriousness of the issue that is being raised.

The hon. Member for Eastbourne asked why there was one omission from the original drafting. I am afraid that that comes down to a simple drafting error, and it is best to admit that. The hon. Member for Northavon asked why we were revising these matters. Again, I have to say that we are working in complex territory. We took the decision early on, and we have explained to the Committee that, given the importance of getting the PPF up and running, it would have been wrong to delay this legislation by a year. However, as we have admitted, that has meant that a good number of Government amendments have been made.

I know that the hon. Member for Northavon will be sensitive and sympathetic to the need to examine drafting carefully, because I think that before Easter he admitted that one of his amendments, although good natured in intent, would have meant that my Department had to increase the pensions of everyone throughout the world. Errors can be made.

James Cran (Conservative, Beverley and Holderness)

I shall now put the Question on the clause, and I remind the Committee that Government new clause 16 and Government new schedule 1 are associated with it.

Question put and negatived.Clause 168Review and reconsideration by Board of reviewable matters

Clause 168 - Review and reconsideration by Board of reviewable matters

Clause 169 - Investigation by Board of complaints of maladministration

Malcolm Wicks (Labour, Croydon North)

May I ask for your guidance, Mr. Cran? Have we finished with clause 168?

James Cran (Conservative, Beverley and Holderness)

We have just done it.

Malcolm Wicks (Labour, Croydon North)

I beg your pardon. You are moving as fast as my hon. Friend the Under-Secretary did in the marathon.

I beg to move amendment No. 528, in

clause 169, page 107, line 13, at beginning insert 'alleging'.

The amendment requires the word ''alleging'' to be added to subsection (2). Although it appears to be a minor amendment, it is required to place the intention of the clause beyond doubt. Without it, the clause could be interpreted to mean that it is necessary for maladministration to have been proved before referring a complaint to the board. The amendment makes it clear that it is alleged maladministration complaints that are to be referred for consideration. Once such a complaint has been received by the board, the normal two-stage internal review procedures commence.

Amendment agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

I have no problem with the amendment that we have just made, as it seems eminently sensible. However, I have a difficulty with the whole principle of whether the board should investigate questions of maladministration, and there are two broad reasons why.

To refer back to clause 168 and the question of reviewable matters, if there is to be a review—we have already debated whether that should be the case—it makes sense to have a set of reviewable matters and circumstances that can be addressed in that way, and to set it all out in secondary legislation, if not in the clause itself. My feeling is that we are discussing administrative failings—often minor ones—that can easily be cleared up. The Minister did not say anything like that, but I think that there was a slight implication that many of these matters could be dealt with easily, because once the board, or the sub-committee of the board, examined them, or perhaps, even before things reached that stage, it would be clear that there had been an error. Such an error might be considered minor from the board's point of view, but for the person at the other end it could be life-destroying. However, that is another issue; here we are dealing with a question of maladministration.

In a while I will argue that it might not be sensible to have a PPF ombudsman at all. There is much to be said for giving responsibilities to the existing ombudsman, who has built up a large body of experience. Why do we need yet another ombudsman? However, we will come to that issue later. A whole body of law, practice and procedure concerning maladministration has been built up from the original ombudsman—the Parliamentary Commissioner for Administration is, I think, the technical title—whose post was set up some decades ago. Initially, there was much to-ing and fro-ing about what ''maladministration'' meant. I think that the technical definition is maladministration leading to injustice, but the ombudsman has clarified much of that.

The fact that there is somebody that one can go to when one feels that one has been badly treated by the system has produced a great benefit to society. The first ombudsman spawned a range of mini-ombudsmen and ombudswomen and other people to whom one can go if one has a beef with local government, financial services or whatever. That principle is well established, as is the body of law and practice for dealing with maladministration. I am not sure that it is fair to ask the board, or any sort of sub-construct of the board, to get up to speed on questions of maladministration.

Those are separate matters—or at least I assume they are, because they are in a different clause—from those set out under clause 168. I am not entirely clear whether the internal procedures under clause 169—this again is an internal way of dealing with complaints—will be the same as, or comparable with, those in clause 168. If they are, in principle this is a four-tier system:

there is a two-stage review within the board or its sub-committee, then there is the ombudsman, and then there is the possibility of going to court on a point of law.

Although my arguments on clause 168 were thought not to be substantial enough to change the idea of having a review, it seems to me that there is a powerful freestanding argument that matters of alleged maladministration should not be for the board, although the board will have to comment when the ombudsman makes a judgment. Having dealt with the ombudsman, it is my impression that it has a two-tier process of its own. We write on behalf of a constituent, the constituent sets out their beef and we pass it on, perhaps with our own comments. Then a case handler, or someone similar, examines whether there is a prima facie case before the matter goes the full distance—if, in the light of the Under-Secretary's success at the weekend, I may use that expression.

Why not go straight to the ombudsman in the first place? There is a question about whether we need a totally separate new ombudsman, and we will address that when we discuss clause 170. Clause 169 addresses a state of affairs different from the matters mentioned in clause 168, which deals with reviewable matters, which are largely mechanistic and administrative issues that arise when people feel that the wrong decision has been made or a decision has not been made when one should have been. Clause 169, however, is about people alleging that they have sustained injustice in consequence of maladministration. That is a different order of seriousness. I can see no point in the board having to use its own resources to build up expertise in dealing with serious complaints. Those complaints will, by definition, be serious and they should be dealt with under the ombudsman system—or, at least, under an ombudsman system.

Malcolm Wicks (Labour, Croydon North)

The hon. Gentleman has argued his point, and I suppose that the word ''maladministration'' can conjure up a variety of sins. I do not think it is uncommon for both statutory and non-statutory organisations, public and private, to have internal systems and means of reviewing decisions, including those that involve maladministration—indeed, I would have thought that that is typical. I had better not say that some maladministration may be of a trivial character, but we are not necessarily talking about the greatest of errors. An error may have been made, and things may have been maladministered, and that will need to be corrected.

The two-stage internal review process that we have discussed this morning is a reasonable way of dealing with that situation, but there is the important safeguard of being able to go to the ombudsman in appropriate circumstances when people are not convinced that the internal review has produced the proper result.

Nigel Waterson (Conservative, Eastbourne)

The problem with what the Minister is saying is that this will not be simply a matter of

maladministration; it will have to amount to someone sustaining injustice, which takes it to a different level.

Malcolm Wicks (Labour, Croydon North)

In that case, we have the process, which I thought the hon. Gentleman was charging with being complex, whereby one can go to the ombudsman's office and from there, as is usual on a point of law, go to court. I do not think that I have convinced the hon. Gentleman, but I think that our two-stage process will meet any points that arise.

Question put and agreed to.

Clause 169, as amended, ordered to stand part of the Bill.

Clause 170 - The Ombudsman for the Board of the Pension Protection Fund

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 514, in

clause 170, page 108, line 10, leave out 'or be removed'.

James Cran (Conservative, Beverley and Holderness)

With this it will be convenient to discuss amendment No. 515, in

clause 170, page 108, line 11, at end insert

', or

(c) may be removed from office by the Secretary of State with the written agreement of the Lord Chief Justice.'.

Nigel Waterson (Conservative, Eastbourne)

I shall have quite a lot to stay on stand part, but the point that I shall make now is fairly narrow, and entirely concerned with subsection (3)(b), which is about the circumstances in which the PPF ombudsman can be removed from office.

This is a serious issue. In amendment No. 515 we suggest that the person should be able to be removed from office only by the Secretary of State with the written agreement of the Lord Chief Justice. That might seem an unusual way of approaching the matter, but I understand that the contractual arrangements with the current ombudsman—the one established under the 1993 legislation—set out that basis for removal. Dismissal of the ombudsman, or non-renewal of his or her appointment, on the grounds of misconduct requires the decision of the Secretary of State, with the concurrence of the Lord Chief Justice.

There could be situations in which it was politically advantageous for the Secretary of State to dismiss an ombudsman, particularly someone who had come into the job with considerable keenness and a desire to make a difference, so there should be a safeguard against that. I am not wholly committed to the role of the Lord Chief Justice; I drafted the amendment to reflect the current state of affairs. However, there should be some safeguard—some further condition required—in addition to the rather bald statement in the subsection as currently drafted:

''or be removed from office in accordance with those terms and conditions.''

It must be implicit in the subsection that such a removal is at the behest of the Secretary of State, because he is the person named in subsection (2). I am sure that the Minister will correct me if I am wrong about that.

This is a question of bolstering the independence of the new PPF ombudsman, and of making it clear that the appointee is there to do a job and should be allowed to get on with it, unless they vacate the office for any normal reason, such as resignation or retirement. There should be a safeguard to prevent the Secretary of State from removing them for no good reason. I am not suggesting that any future Secretary of State would consider doing such a thing, but in case a maverick Secretary of State took against the PPF ombudsman for some reason, some other significant person should be involved. That person need not be the Lord Chief Justice—it could be almost anyone. Perhaps there should be a separate ombudsman to deal with any problems that the PPF ombudsman might face in due course. That would be the Government's default reaction to such a problem, given the way that the Bill has developed and expanded its tentacles during our consideration of it. I shall be interested to hear the Minister's response.

Malcolm Wicks (Labour, Croydon North)

The hon. Gentleman suggests that there might be a special ombudsman for the PPF ombudsman. I had not realised that he had had sight of one of our new clauses.

Nigel Waterson (Conservative, Eastbourne)

Chance would be a fine thing!

Malcolm Wicks (Labour, Croydon North)

Very good. I jest, of course. I am so pleased to be talking about the right clause at the right time that I felt like making a small joke.

The clause allows the Secretary of State to determine the terms and conditions for appointing and, if necessary, removing the PPF ombudsman from office. It provides that the Secretary of State may remove the ombudsman from office only in accordance with the terms and conditions. The grounds for removal will include incapacity, bankruptcy and arrangements with creditors. I emphasise that it is unlikely that the Secretary of State would ever need to use that power. As we intend to be in office for a considerable time, we do not anticipate there being a maverick in the post.

The amendments would require the Secretary of State to obtain the written agreement of the Lord Chief Justice before removing the ombudsman from office. We agree with the principle that an independent office holder should be required to confirm removal, but do not believe that it is necessary to include that in the Bill, because we would not want to be limited by legislation to naming one individual—in the case of the amendment, the Lord Chief Justice. The need for an independent office holder to agree to the removal of the PPF ombudsman will be included in the terms and conditions of the post, in the same way as that requirement is included in the terms and conditions of the pensions ombudsman.

I hope that the hon. Gentleman realises that we agree with the spirit of his amendment. A matter as important as the removal of an ombudsman must be considered by another important individual. Our proposal is less expensive than a national referendum, but we agree with the overall spirit of the amendment. I therefore ask the hon. Gentleman to withdraw it.

Nigel Waterson (Conservative, Eastbourne)

I am delighted to hear that the Minister has taken this point on board. Although I do not entirely accept his discounting of the possibility that there may be a maverick Secretary of State one fine day, at least the issue will be dealt with in some shape or form. I am delighted to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 534, in

clause 170, page 108, line 11, at end insert—

'( ) Subject to any provision made by regulations under section 174, the procedure for conducting an investigation by the PPF Ombudsman shall be as he considers appropriate in the circumstances of the case; and he may, in particular, obtain information from such persons, and in such manner, and make such inquiries, as he thinks fit.'.

James Cran (Conservative, Beverley and Holderness)

With this it will be convenient to discuss amendment No. 536, in

clause 174, page 110, line 42, at end insert—

'( ) For the purposes of any investigation under this section, the PPF Ombudsman shall have the same power as the court in respect of the attendance and examination of witnesses (including the administration of oaths and affirmations and the examination of witnesses abroad) and in respect of the production of documents.'.

Nigel Waterson (Conservative, Eastbourne)

These are probing amendments, as are most of our amendments. I am sure that the matters to which they pertain should, and will, be dealt with in regulation in due course; but we want to flag them as important points of principle for us and get a commitment from the Minister that these are issues on which all the finest minds in the Department for Work and Pensions are working.

Amendment No. 534 is entirely procedural and says that subject to any regulations that may be made

''under section 174, the procedure for conducting an investigation by the PPF Ombudsman shall be as he considers appropriate in the circumstances . . . and he may . . . obtain information from such persons, and in such manner, and make such inquiries, as he thinks fit.''

Perhaps the Minister will say, ''We do not need to set this out in legislation''. He may be right. It is, however, important to make it clear that the ombudsman has wide powers and discretion to seek information from individuals and to seek a variety of different information, and has powers to ensure that that information is supplied.

Amendment No. 536 also makes it clear that the ombudsman should

''have the same power as''

the courts

''in respect of the attendance and examination of witnesses (including the administration of oaths and affirmations and the examination of witnesses abroad) and in respect of the production of documents.''

We go to some lengths in other, unconnected parts of the Bill to set out powers that are available to investigate ongoing problems in pension schemes. We have had some debate about whether some of those powers are too draconian, or not sufficient, and where the famous balance should be struck. However, we are a little light on detail—unless it is in one of these new

clauses that are lurking in the wings—about the ability of the ombudsman to call for information and have powers to ensure that it is available.

A later clause, which we may debate briefly on stand part, deals with obstruction of the PPF ombudsman. Perhaps there are already powers, buried away in legislation, that are applicable to existing ombudsmen, that enable them to do that and will be applied to the new ombudsman as well. If that is so, I should be reassured to hear it from the Minister. It is important to flag up that the ombudsman will have serious powers to call for documents and witnesses, administer oaths, get evidence on oath, and so on, so that he or she can get to the bottom of any problems that are referred to them in future.

The amendments provide a good opportunity for the Minister to take us into his confidence and say how this part of the Government's thinking is developing. Although I appreciate that the entire Bill is work in progress, as far as I can make out, it would be nice to hear how far the Government have got.

Malcolm Wicks (Labour, Croydon North)

I think that we are at one on this matter; it is just a question of how we get there. I am happy to take hon. Members into my confidence—albeit briefly, because it is a simple point. As we heard, the amendments seek to ensure that the PPF ombudsman has sufficient powers to conduct effective investigations. Both amendments would include in the Bill provisions that we intend to set out in regulations. To that end, those Opposition amendments would not have any material effect. That said, I fully support the spirit of the proposals, and I assure hon. Members that the regulations will include procedures on how to refer disputes to the PPF ombudsman, and on how he or she will conduct investigations and obtain information.

I should add that the regulation-making power in clause 174(1) and (2)(h) will set out that the PPF ombudsman can compel attendance and examine witnesses just as a court can—a point on which the hon. Gentleman was at pains to seek information. As the spirit of the amendment will be covered in regulations, I ask him to withdraw the amendment.

Nigel Waterson (Conservative, Eastbourne)

I am sorry; I was just getting the good news that there are more amendments on the way.

What the Minister says sounds eminently sensible. It was impertinent of me to table the amendment in the first place. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 529, in

clause 170, page 108, leave out lines 12 to 18.

James Cran (Conservative, Beverley and Holderness)

With this it will be convenient to discuss the following:

Government amendments Nos. 531 to 533.

Government new clause 21—Deputy PPF Ombudsmen.

Malcolm Wicks (Labour, Croydon North)

I can take the hon. Gentleman's critical scrutiny, and even his scorn; but I find his humility very difficult to take, even so close to the religious holiday that has just been.

This group of Government amendments deals with the establishment and role of the deputy PPF ombudsman. The provision for the role of a deputy was originally set out in clause 170, as hon. Members know. The new clause sets out when a deputy may perform the PPF ombudsman's functions. If, for example, the ombudsman's work load increases unexpectedly, the Secretary of State may decide to appoint one or more deputies to assist with clearing any backlog, thus ensuring timely decisions that avoid unnecessary delay in dealing with applications. That is important because any delay may affect a decision on whether a scheme enters the PPF. It can also affect an individual's compensation entitlements, and earlier this morning we discussed the importance of speed in such matters.

Rather than expanding clause 170 to take account of the provision, we decided that, for the sake of clarity, all matters relating to the deputy position should be contained in a single clause, hence new clause 21. The amendments also amend clause 171, which states that the PPF ombudsman cannot be a member of the House of Commons—[Hon. Members: ''Oh no!'']—so that rules out some very good candidates. That is an important provision. It also rules out Members of the Northern Ireland Assembly. Those exclusions will extend to the deputy PPF ombudsman, too.

Nigel Waterson (Conservative, Eastbourne)

It was a bit of a blow to hear that Members of the House are not entitled to apply for the job of deputy PPF ombudsman. [Interruption.] However, if the campaigning skills of the hon. Member for Northavon bear fruit—he was in my constituency yesterday—who knows what will happen?

Steve Webb (Liberal Democrat, Northavon)

I reassure the hon. Gentleman that I campaigned for three target councils last year, and we lost control of all of them.

Nigel Waterson (Conservative, Eastbourne)

I can inform the hon. Gentleman that he will not break his record this year. The ghastly, grisly gang running Eastbourne will be booted out in June, but we will not go any further down that route.

James Cran (Conservative, Beverley and Holderness)

Indeed; I hope not.

Nigel Waterson (Conservative, Eastbourne)

I could see that you were getting a bit nervous there, Mr. Cran.

It is a blow that people like us are not entitled to apply for the job; it would be the height of someone's personal ambition to be able to boast at the golf club that they were the deputy PPF ombudsman, even as opposed to the PPF ombudsman.

Malcolm Wicks (Labour, Croydon North)

It is the golf club, then.

Nigel Waterson (Conservative, Eastbourne)

I do not play golf; I was citing a fictitious example.

We have a few thoughts on the matter. It is sensible to have a deputy PPF ombudsman. I am sure that that

will be a relief to the ombudsman. I have some questions about who would decide when the deputy kicked in, as it were. That does not seem entirely clear. Will the position be like that of a deputy judge, called on to determine a particular case when the ombudsman is not available, or will it be open to the ombudsman to delegate matters to his or her deputy? The latter is much more sensible because the whole point of a deputy—who knows, there might be more than one—which entitles them to have the tin star pinned to their breast, is that they are there when needed.

Subsection (4) of new clause 21 sets out only three circumstances in which the deputy may perform the functions of the ombudsman, the first of which is

''during any vacancy in that office''.

That is eminently sensible, if the ombudsman had been dismissed by the fictitious maverick Secretary of State. The second circumstance is when the ombudsman is unable to discharge his functions. That also makes sense. Such events could arise due to illness. The third circumstance is

''at any other time, with the consent of the Secretary of State.''

Although, as a Government in waiting, we can see that there are parts of the Bill under which a Secretary of State should have some say, I cannot for the life of me understand why the Secretary of State should have a role in activating the position of the deputy ombudsman. That would call into question what the deputy would do the rest of the time. Is it envisaged that the appointment will be part-time?

Malcolm Wicks (Labour, Croydon North)

Playing golf.

Nigel Waterson (Conservative, Eastbourne)

Apart from playing golf and boasting about being a deputy in the golf club bar, is it envisaged that the position would be like that of a deputy judge—someone who is practising something else, but who is called in when required by the Lord Chancellor or the court service—or will the person be a full-time employee of the ombudsman service? It is important to know the practicalities at this stage.

The explanatory notes are interesting. When I actually receive them, I often find them more interesting than the bare print of clauses. They state:

''There is a possibility that the PPF Ombudsman's workload could increase unexpectedly''.

What does that mean? What is envisaged will happen? Is anything envisaged happening? The context of the explanatory notes, as well as the way in which the new clause is set out, is that the deputy will be available in an unusual situation. He would not be there to take up the slack when there was pressure on the usual working duties of the ombudsman. We are a little puzzled about that, which brings me back to what sort of person is envisaged to be the deputy.

Full marks to the Government—well, mostly full marks to the Government. [Interruption.] Yes, I must not get carried away, although there has been a new spirit of comradely co-operation this morning, which, I suspect, is just about to be ruined by the arrival in Committee of the young Turk, my hon. Friend the Member for Tatton (Mr. Osborne). I wish to make it clear that the role of a deputy is important, useful and

practical. We are not speaking against that in any way, but I am puzzled about the role and how the deputy will be activated to take on the role of the ombudsman.

Malcolm Wicks (Labour, Croydon North)

As we have said, the Secretary of State may decide to appoint a deputy ombudsman to prevent backlogs of work from accruing. It is obviously difficult to determine at this stage the exact circumstances. We do not know about the work load on the PPF, let alone on the office of the ombudsman, but we hope that it will be slight. However, the capacity to appoint a deputy on a part-time or a full-time basis, depending on the extent of the work load, is an important provision. I am not sure whether it is sensible or possible to say more about it at this stage but we felt that the provision should be in the Bill.

I should explain to the hon. Member for Tatton that the temperature he detects in the Committee may be due to the spirit of Easter and an outbreak of humility—sackcloth and ashes—among hon. Members on the Opposition Benches, including the hon. Member for Northavon.

Amendment agreed to.

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 530, in

clause 170, page 108, line 26, at end insert—

'( ) about the delegation of the functions of the PPF Ombudsman to its staff or to any such additional staff;'.

The amendment will ensure that the ombudsman may delegate tasks to the staff available to him, and that the functions that he may delegate are identified clearly in subordinate legislation. The Secretary of State may make provision by order on which functions may be delegated in that way. However, I want to clarify that we do not envisage that staff would ever be permitted to make decisions or determinations on disputes or complaints of maladministration. That function would only be performed by the PPF ombudsman or his deputy. The amendment relates to staff that may be employed directly by the PPF ombudsman, or made available by the Secretary of State, for example on secondment from the Department for Work and Pensions.

I hope the Committee will agree that it is appropriate to ensure that tasks are carried out at the appropriate level within the organisation. This is a common-sense amendment to ensure that the functions that the ombudsman or his deputy may delegate to staff are identified clearly in subordinate legislation. Similar provisions exist for the pensions ombudsman, who is permitted to delegate certain functions to staff by virtue of section 145 of the Pension Schemes Act 1993.

Amendment agreed to.

George Osborne (Conservative, Tatton)

I beg to move amendment No. 535, in

clause 170, page 108, line 34, at end insert—

'( ) For the purposes of the law of defamation, the publication of any matter by the PPF Ombudsman—

(a) in submitting or publishing a report under section 172 or a determination or direction under section 173,

(b) in disclosing any information under section 174, or

(c) in sending to any person a determination or direction

shall be absolutely privileged.'.

James Cran (Conservative, Beverley and Holderness)

With this it will be convenient to discuss Government new clause 22—Publishing reports etc.

George Osborne (Conservative, Tatton)

Amendment No. 535 replicates section 151(7) of the Pension Schemes Act 1993 and gives the PPF ombudsman absolute privilege against defamation in the course of his or her duties.

When I tabled the amendment I thought it made a good point and I am delighted that the Government subsequently introduced a new clause that would achieve almost the same thing. The proposal is sensible; there will be no need to press my amendment to a Division as the Government have, in effect, accepted my amendment in its entirety in new clause 22.

Malcolm Wicks (Labour, Croydon North)

The Government proposal to introduce new clause 22 has been grouped with the Opposition amendment because both relate to the ombudsman's power to publish reports, and to the status of those reports.

I shall begin by explaining the effect of new clause 22, which will enable the PPF ombudsman to publish a report on any investigation of reviewable matters or maladministration that is carried out by virtue of the regulations under clauses 173 or 174. Furthermore, the publication of matters under any of the appeals provisions in chapter 6 will be absolutely privileged for the purposes of defamation, which includes the annual report issuing statements or directions and so on. It is important that the ombudsman has the freedom and independence to reach decisions and to publish those determinations without fear of prosecution for defamation. It is not contentious because the ombudsman will be carrying out a quasi-judicial function.

The provision is similar to section 151 of the Pension Schemes Act 1993, which states that reports by the ombudsman also have absolute privilege. The hon. Gentleman has effectively agreed to withdraw his amendment given the Government's position.

George Osborne (Conservative, Tatton)

That is indeed the case. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause, as amended, stand part of the Bill.

Steve Webb (Liberal Democrat, Northavon)

I have refrained from contributing until now, because the amendments dealt with specific aspects of the PPF ombudsman. The stand part debate is an opportunity to discuss whether we should have a PPF ombudsman at all.

All of us, as Members of this House, value the work of ombudsmen and their like. It is important that there is someone to whom one can go who is completely independent, expert and, importantly, free of charge.

A judicial process is not required—at least not one in which solicitors need to be paid—and a person can go to the ombudsman who is provided as a last court of refuge. To that extent, the PPF ombudsman seems like a good idea. However, it raises the question of consistency.

The danger is that we are taking a piecemeal approach to the setting up of ombudsmen. The closest analogy is the financial services ombudsman, who will be dealing with similar matters and is funded by a levy on the industry. I believe that I am right in saying that the financial services ombudsman is not taxpayer-funded. His accountability is therefore quite different from the accountability of the PPF ombudsman, which is being set up under statute. Constituents of mine with a complaint about a bank, building society or other financial institution already go to the financial ombudsman and they sometimes feel that they have not had an independent hearing when they discover that the ombudsman is paid for by the industry.

The PPF ombudsman, which is financed presumably by the taxpayer, must, on the face of it, be an improvement. However, issues of coherence are raised. Have the Government thought about why we would have a taxpayer-funded ombudsman in some cases and not in others? One answer might be that the PPF is taxpayer-funded, so it logically follows. Is there a danger that we will end up with an ombudsman here, an ombudsman there, some being taxpayer-funded, some funded by industry? The quality of service that a person receives and the extent of the ombudsman's independence might end up depending on which body did you down. That is important in relation to people's rights, particularly when it comes to financial matters, pensions and so on.

Is there a danger that every time a new body is set up we end up with a new ombudsman, not just in the Department for Work and Pensions but across Government? We will end up with a proliferation of ombudsmen. Being an ombudsman is a very specialist job. One has to know what one is talking about to be the ombudsman for the PPF, and that is probably true of all ombudsmen. Is there a danger that we will end up with a multiplicity of bureaucracy by having lots of separate ombudsmen? Why do we need a completely free-standing PPF ombudsman? Could that service be part of the pensions ombudsman, as the hon. Member for Eastbourne suggested, or could it be part of the parliamentary ombudsman? At what point do Government decide that for every new body we need a new ombudsman, which is free-standing with its own infrastructure, buildings and secretariat? How far is the public sector getting good value for money? The fact that people do not have to pay to access it and it is independent is all good, but is there a danger that such an ombudsman service is not the most efficient way of doing things? Will the work of the PPF ombudsman duplicate things that the pensions regulator is doing? Will the Minister comment on that? Why not use the existing pensions ombudsman or parliamentary ombudsman? Why do we need another ombudsman? Clearly, we want someone who is independent, but is this the way to deliver it?

George Osborne (Conservative, Tatton)

I am glad to take part in this stand part debate and pick up on the theme of the hon. Member for Northavon about whether we need a separate PPF ombudsman. I am told by the Library that creating such a position would bring the number of ombudsmen in the country to 18.

I am not sure what the collective noun for ombudsmen is: a complaint of ombudsmen, or a maladministration of ombudsmen? It would be something like that. Anyway, there would be 18 of them. One of the existing 17 is the pensions ombudsman, a position created under the Pensions (Miscellaneous Provisions) Act 1990.

I asked my poor researcher to research the subject of ombudsmen. I am sure that the Minister knows that the position was created in Sweden; the first was established in 1809. It took us 158 years to catch up with the Swedes. Since then, we have been making good time by creating all those different ombudsmen.

The pensions ombudsman is most relevant to what we are talking about. At the moment, he is Mr. David Laverick. His job is to investigate and make decisions on complaints and disputes about the way in which pension schemes are run. His problem, as he made public in his last annual report, is that he has a complex number of jurisdictions. He does not have a general jurisdiction like the parliamentary ombudsman or the local government ombudsman. I am sure that the Minister will be aware of the Court of Appeal decision in the Britannic case, which drew a distinction between the taking of an administrative act connected with a scheme, which was outside his jurisdiction, and the administrative actions of a person connected with a scheme, which were within his jurisdiction. I am sure that the Minister has taken that on board.

That distinction has a practical application: the pensions ombudsman has to tell a large number of people who come to him that, unfortunately, he cannot investigate their cases because they fall outwith his fairly specific areas of jurisdiction. He made that point in his annual report for 2002–03. According to the pensions ombudsman website, that is the latest annual report. I have not seen the report for 2003–04; it probably has not been published yet. The website states that in his report

''the Ombudsman had stressed the need for greater simplification of the rules governing who can make complaints to him and how such complaints should be dealt with. He recalled explaining to the House of Commons Select Committee during the year that not all kinds of complainant can, as the law presently stands, complain about the same kind of matter, that not all complainants can complain against the whole range of possible respondents and that there was doubt as to whether all those involved in administering pension schemes lay within his jurisdiction.''

He called for a change in the law that would broaden his jurisdiction and said that a great deal of work and aggravation could be saved without leading to more than a marginal increase in the number of complaints to be investigated.

One would have hoped that the Government would have responded to that in this legislation, but they have not. To my mind they have made the matter worse by creating another ombudsman: the PPF ombudsman. That will only add to the complexity. If

they had a complaint about the way in which a pension scheme was run, pension scheme members would have to decide whether to go to the pensions ombudsman; if they had a complaint about the way in which a pension scheme had been sold, they would have to decide whether to go to the financial ombudsman; if they had a complaint about the way in which a scheme had been handled by the PPF, they would have to decide whether to go to the PPF ombudsman. If I understand the matter correctly, if they were not happy with any of that, they could go to the parliamentary ombudsman to complain about the way in which the pensions ombudsman, the PPF ombudsman or the financial ombudsman had handled their case.

Steve Webb (Liberal Democrat, Northavon)

The hon. Gentleman has raised an interesting point. Clearly, one can go to the parliamentary ombudsman about the PPF ombudsman because the PPF ombudsman is statutory, but is an industry-funded ombudsman also statutory? Is that not an example of the confusion that we are getting into?

George Osborne (Conservative, Tatton)

It is very easy to agree with an intervention when the speaker begins by saying that one has made an interesting point. The hon. Gentleman makes an excellent intervention, which makes the point that I am trying to draw out. It is extremely confusing. It is difficult enough as Members of Parliament to know which is the best ombudsman to refer someone to, and we are used to dealing with such cases day in, day out. A member of the public would probably never have been to an ombudsman and would not even have known what an ombudsman was until they suddenly needed one. It will be extremely confusing.

The Government have not spelled out some good, practical reasons why there must be two separate ombudsmen. Within the ombudsman profession, if there is such a thing, there is concern about why two ombudsmen are needed.

The hon. Gentleman also raised the question of cost. It would, one assumes, be far cheaper to have a single ombudsman for all pensions issues. It would be far simpler and would avoid the cost of duplicating staff and offices. There is no mention in the regulatory impact assessment of the cost of setting up the PPF ombudsman—at least, not that I have discovered. Presumably, there is a considerable cost, if offices, buildings and so on must be found. The existing pensions ombudsman, in the same annual report, complains about the current resources that he receives:

''The bare facts are that in 2002–2003 I received 3,891 enquiries and dealt with 3,684. The net result is that despite a great deal of hard work from my staff and myself, we have been failing to keep up with the incoming tide. The position is likely to be even more difficult in the current financial year''—

the year that has just ended—

''That is when the bulk of time needs to be spent on the work taken in the last year. So far I have allocated no additional resources to cope with that work.''

He is struggling with the resources that he already has. Now the Minister is proposing to set up a wholly separate ombudsman. Will he at least give us an assurance that the new PPF ombudsman will have the

resources that he needs to do his job? Will the ombudsman be able to call in the Government in emergencies? It is possible to imagine that the PPF ombudsman will have a fairly quiet time for month after month—possibly year after year—as a few cases go into the PPF process, after which there is suddenly a rush of collapses and a huge increase in his work. Will the Minister reassure us that that kind of contingency has been provided for?

I understand that the Government's reasons are rather technical ones relating to giving effect to section 54 of the Child Support, Pensions and Social Security Act 2000, and that that is the reason behind the creation of two separate ombudsmen. However, many people in the industry to whom we have spoken think that there is a practical problem that can be easily overcome. Perhaps the Government could consider that. The Minister may not have focused—given all the other issues in the Bill—on the question of a PPF ombudsman with all the detail and clarity that he brings to many subjects. Perhaps he will reflect on what has been said and think about whether we need to create two separate ombudsmen. Could not we give the pension ombudsman the powers to investigate the activities of the PPF, thereby making it not only much simpler for the clients, as we must now call them, but much cheaper for the taxpayer?

Malcolm Wicks (Labour, Croydon North)

It has been a useful discussion.

The effect of the Britannic case, which the hon. Gentleman mentioned, has been to create problems relating to the existing ombudsman's jurisdiction in one-off administrative actions. The pensions ombudsman is currently unable to investigate complaints and disputes that he was intended to investigate. We will discuss that further when we deal with new clauses on the pensions ombudsman, because it is important.

Considering whether it is really necessary to set up a new office of PPF ombudsman, I should like to emphasise that the PPF, as we have discussed previously, is not a pension scheme; it is a compensation scheme for members whose pension schemes are unable to provide them with the benefits that they were expecting. The distinction about who will deal with members' disputes will be clear. For example, if a pension scheme member receives a pension forecast from his scheme showing that he has 20 years' accrued rights but he actually has 25 years' rights, that dispute will have to be raised through the scheme's internal disputes procedures. Conversely, when an approved PPF valuation has been issued and the scheme member is advised that his PPF compensation will be based on fewer years than he thought, the dispute will need to be dealt with through the PPF disputes procedures. Of course, the matter will then be passed to the ombudsman, if necessary. Given the unique nature of the PPF, the case for the new office of the ombudsman is clear.

The costs of the ombudsman will be paid for by Government, but the money will be recovered from the administration levy, so the money will ultimately come from the schemes. That seems appropriate.

We have had an interesting discussion about the importance of the office of ombudsman and the concerns of some hon. Members that there might soon be a plethora of such ombudspeople in Britain. The hon. Gentleman reminded us, thanks to his able research assistant, of the Scandinavian origins of the ombudsman's office. I am not sure what the collective noun of ombudsmen is; a smörgåsbord, perhaps, but that may be more Danish than Swedish. I have forgotten. However, certainly there are now several ombudsmen.

I hope that I have convinced Members that, given the unique nature of the PPF, we need a separate office-holder, to be called the PPF ombudsman. Having said that, none of us can predict the volume of business. We have discussed the need for provision in the Bill for a deputy position, in case the volume becomes substantial. I am aware that there is an issue to do with how the PPF ombudsman's post relates to that of the current pensions ombudsman.

I share with the Committee our intention to start discussions with the pensions ombudsman soon on how his role could be related to that of the PPF ombudsman. It is important not to be specific about that in the Bill, but if it seems sensible to combine the functions of the PPF ombudsman with those of the pensions ombudsman—I do not want to make any final judgment about the matter—we would consider it. However, we have certainly not yet discussed that with the ombudsman, although we have informed him that we want to have that discussion very soon. I repeat that that is not necessarily the road that we will take, not least because of the difficulty of determining what the volume of business will be in the first year or two. However, that is a sensible discussion that my Department should be having.

Mr. Osborne rose—

Mr. Webb rose—

Malcolm Wicks (Labour, Croydon North)

I give way first to the hon. Member for Northavon.

Steve Webb (Liberal Democrat, Northavon)

I am very grateful.

I do not think that the Minister has convinced us; he has merely asserted that we need a separate ombudsman because PPF is unique. Everything is unique in a sense, but why does the PPF need its own ombudsman? We need a bit more than that, to be honest.

Not to repeat what the Minister said about the relationship between the PPF and pensions ombudsmen, surely it is perfectly conceivable that someone would have ''problems with their pensions'' that involved them in simultaneous dealings with both ombudsmen. It is an absurdity that someone should have to divide their pensions problems between two ombudsmen. Why not put it all under one roof?

Malcolm Wicks (Labour, Croydon North)

I will give way to the hon. Member for Tatton when I have tried to deal with that last point; I have no doubt that my answer will just be another assertion, but I will do my best to appear wise about the subject to the hon. Member for Northavon.

For once, the word ''unique'' is being used appropriately. The PPF is a new institution, and

there is nothing like it. The issue of how to deal with disputes arises, and we discussed that today in relation to internal procedures. We have argued that we need an ombudsman for the office. We need to legislate for that, and we think that it is important that provision for the post is put in the Bill.

Because I think it appropriate to do so, I have shared with the Committee a discussion that we are having. We have alerted the pensions ombudsman to the fact that we need to have a discussion with him about whether it is appropriate for issues that the PPF ombudsman would deal with to be under the same roof—literally, perhaps—as those dealt with by the current pensions ombudsman, and about the possibility that that same individual could perform both functions, at least for a time. [Hon. Members: ''Oh!''] There are pros and cons. [Interruption.] I am not sure that I would want to put it as sharply as that, but this is a discussion that we need to have.

I do not think that there is any inconsistency in saying that we need to assert in legislation that there should be an ombudsman's function but that we also need to think through carefully, having regard to the volume of business and the costs, whether we should combine things by having one person and one deputy, at least for a period. It might be the case that we should do that, at least until we understand the volume of business into the coming decade.

George Osborne (Conservative, Tatton)

In a day of U-turns—the statement on the European constitution will be made soon—that may not be the greatest of them. However, it is good to hear the Minister conceding that the Government are considering having a single ombudsman, even if the same person wears two hats. I want to be absolutely clear: I understand that things are not fixed and that there are conversations that the Government need to have, but am I right that they are thinking of starting with the same person fulfilling both roles, presumably with the current pensions ombudsman also fulfilling the role of the PPF ombudsman, and that if the volume of PPF work grows to a great extent they would think of having two separate ombudsmen? Is the Minister saying that they would start off with one combined office but that they would leave open the option of having two separate offices in the future? This is a lengthy intervention, but it is confusing that the same person will exercise different powers in different capacities. We will address the powers later, but will the Minister clarify this confusing matter?

Malcolm Wicks (Labour, Croydon North)

Because of the etiquette of how to address hon. Members, I should not quote the famous phrase, ''You can turn if you want to.'' However, the hon. Gentleman can turn if he wants to but, with regard to including in the Bill a PPF ombudsman, we are not for turning. We are legislating for an ombudsman for a new pension protection fund. It is important to include that in the Bill. I have been sharing our thoughts with the Committee because I thought that that was appropriate. We consider that it is proper that we think through the practice of this. We have notified the ombudsman of our need to discuss this matter with him, but we have not yet had that discussion.

There is sensitivity about this, but we are discussing it in Committee. We are scrutinising it. I appreciated that this perfectly proper question about whether we need two buildings and two sets of salaries would arise, and I thought that it would be sensible of me to share my thoughts with Members. The opinions of the current ombudsman will be important. I can imagine that there are pros and cons about whether combining is sensible. There may be disadvantages, and the pensions ombudsman might bring some of those into our thinking. That is why I am not saying what the outcome will be.

The hon. Member for Tatton made a point about the time scale. With regard to all the institutions that we are establishing, none of us can be certain about volumes of work and demand. The PPF ombudsman will probably have relatively little work to do for a year or so; it will take a long time for companies to become bankrupt or insolvent and for the PPF to have to swing into action. Therefore, it is difficult to determine when the first application to the PPF ombudsman might be made. Those are the kinds of practical issues that arise with regard to the establishment of that post. I am thinking aloud, but not drawing conclusions. It is useful to have had this discussion in the Committee. Should we decide to combine the roles in one person, we would have to consider whether that would be for the short, medium or long term; but the arguments for doing that in the short to medium term might be significant.

Steve Webb (Liberal Democrat, Northavon)

I seek some clarification. Discussions with the current pensions ombudsman are ongoing. Has the ombudsman expressed a view on whether a separate PPF ombudsman is needed?

Malcolm Wicks (Labour, Croydon North)

I understand that we have asked the pensions ombudsman to discuss that matter, but that that discussion has not yet taken place. As far as I know, he has not expressed an opinion to us on the matter. It would be interesting to get his view on it. I suspect that the balance is not necessarily in one direction.

The point is—it is not just a matter of semantics—that two separate offices are important. The fund is new and unique, and we need to have a recognised way in which an appeal to an ombudsman figure can be undertaken, whether that necessitates two separate individuals, perhaps in two separate buildings, or one individual.

George Osborne (Conservative, Tatton)

It seems a bit strange that the Minister says now that he wants to have that conversation with the pensions ombudsman—because it is important that he talks to him—but that he has not yet done so. When he or his officials were involved in drafting the legislation and decided to create something called a PPF ombudsman, would it not have been sensible for them to speak to the existing pensions ombudsman, given all his experience, before introducing the legislation? Would it not have been better to have the conversation before coming to the Committee rather than afterwards?

Malcolm Wicks (Labour, Croydon North)

Others would have argued that if we had done that it would have been inappropriate to do so before discussing these matters in Committee.

The provision as drafted, which I recommend that the Committee accepts, gives us the flexibility that we need. It is important to put into statute the notion of a separate office of PPF ombudsman. How that is brought into being—I shall not repeat all the arguments—is another matter. I thought that rather than argue a line against proposals that the office should be contained under the same roof or in the same person, it was important for me to share my Department's thinking on the matter with members of the Committee. No doubt that approach to open government will invite fresh scrutiny, but so be it.

Question put and agreed to.

Clause 170, as amended, ordered to stand part of the Bill.

Clause 171 - Disqualification of PPF Ombudsman from certain offices

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 557, in

clause 171, page 109, line 7, at end insert—

'( ) In Schedule 4 to the Parliamentary Commissioner Act 1967 (c.13) (relevant tribunals for the purposes of section 5(7) of that Act), at the appropriate place insert—

''The Ombudsman for the Board of the Pension Protection Fund established under section 170 of the Pensions Act 2004.'' '.

I am sorry to be hogging the limelight—such as it is in a Committee—but I know that my hon. Friend the Under-Secretary will get into his stride later today.

The amendment makes provision for dealing with maladministration claims against the staff of the PPF ombudsman. We hope that such complaints will be few—in an ideal world they would be non-existent. However, we must make provision for such complaints to be dealt with and intend to do so by amending the Parliamentary Commissioner Act 1967. That will allow the parliamentary ombudsman to deal with any complaints that are made. The provision mirrors the one that is already in place for complaints against the staff of the pensions ombudsman.

Amendment agreed to.

Clause 171, as amended, ordered to stand part of the Bill.

Clause 172 - Annual reports to Secretary of State

George Osborne (Conservative, Tatton)

I beg to move amendment No. 516, in

clause 172, page 109, line 11, leave out 'the Secretary of State' and insert 'both Houses of Parliament'.

James Cran (Conservative, Beverley and Holderness)

With this it will be convenient to discuss amendment No. 517, in

clause 172, page 109, line 13, leave out subsection (3).

George Osborne (Conservative, Tatton)

This is just a good old stab at trying to defend the rights of Parliament, by changing the person to whom the PPF reports from being the Secretary of State, as it is under clause 172, to Parliament.

Many organisations report to Parliament rather than to the Secretary of State. One could argue that parliamentary pressure and campaigns, for example that of the hon. Member for Cardiff, West (Kevin Brennan), have pushed the Government into creating the PPF in the first place. I would freely concede that much of that has come from the Government Benches rather than from Conservative or Liberal Democrat Members—although we have played our part. Therefore, it seems only appropriate that having created that organisation and the PPF ombudsman, Parliament should be reported to by the ombudsman about how things are proceeding.

I am ever an optimist; after all, I was calling for a referendum on the European constitution three weeks ago, and we have seen what has happened. If the Government feel minded to accept my amendment, the PPF ombudsman would send a report to Parliament rather than to the Secretary of State as soon as practicable after the end of the financial year for which it is prepared. I have proposed deleting subsection (3), but I would assume that in those circumstances Parliament would make the report available or it would have it published. That was the purpose of the amendment and I look forward to its being accepted by the Government.

Malcolm Wicks (Labour, Croydon North)

As drafted, clause 172 requires the PPF ombudsman to prepare an annual report on the discharge of his functions. It will be sent to the Secretary of State as soon as practicable after the end of the financial year to which it relates and they must then arrange for it to be published. As the PPF ombudsman is to be appointed by the Secretary of State, those matters are an important part of the Secretary of State's stewardship role. It is therefore important for the Secretary of State to be involved with the annual report's publication and that involvement would be removed if the amendment were to be accepted.

The clause as drafted mirrors the provisions in place for the pensions ombudsman. While there is no requirement for his annual report to be sent to both Houses of Parliament, that is done as a matter of courtesy. The same courtesy will apply to the PPF ombudsman's annual report. The important thing is that members of the public and Members of Parliament are able to read it. I suspect that when people read the first report in the public taverns of Tatton they will not say to themselves, ''Oh crikey, this went to the Secretary of State first''. They will simply get on and read what will, no doubt, prove to be a fascinating report about a unique and important piece of social progress. I beg to move.

George Osborne (Conservative, Tatton)

I was very excited as the Minister begged to move my amendment; suddenly, I could see my troops lining up behind me.

I made a small point and I was trying to defend the rights of Parliament. Of course, it is good to have the Minister's assurance that the report will be given to Parliament and published by the Secretary of State. It might not be a thing that we talk about in pubs in my constituency or, indeed, in Croydon. However, maybe they were not talking in the pubs of Croydon about the arrest by Charles I of the MPs when it happened, but that did not mean that it was not important.

Malcolm Wicks (Labour, Croydon North)

Whose side was the hon. Gentleman on?

George Osborne (Conservative, Tatton)

I was on the parliamentary side, of course. With that, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee B

Clause 172 - Annual reports to Secretary of State

Clause 173 - Reference of reviewable matter to

George Osborne (Conservative, Tatton)

I beg to move amendment No. 518, in

clause 173, page 110, line 34, at end insert

'taking into account but not being limited to remedies available by way of legal action in the civil courts'.

I welcome you to the Chair, Mr. Griffiths. If I am a bit sluggish this afternoon, it is because I have been to the North West Fine Foods fair. I am not sure whether there are other north-western MPs in the Room—by the look of it, there are not—but we were all there enjoying the local produce at lunch.

Amendment No. 518 is small in terms of the number of words that it would insert in clause 173, but it is trying to open a much bigger issue. We could have tried to table amendments to the powers of the pensions ombudsman, but in an attempt to provoke the same debate we tabled amendments on the changes to the powers of the PPF ombudsman. The amendment would insert a provision that the ombudsman should take

''into account but not''

be

''limited to remedies available by way of legal action in the civil courts.''

We were talking this morning about the Swedish origins of ombudsmen, and why they were originally set up. Public sector ombudsmen—they are not called ombudspeople—almost by definition, deal with issues that are not capable of being remedied by legal action. That is something with which we constituency Members of Parliament are familiar, because we are asked, for example, to refer cases to the parliamentary ombudsman. The legislation that sets up public sector ombudsmen generally provides that they should not accept a complaint for investigation if it is about a matter for which a remedy is available by way of legal proceedings.

Generally, public sector ombudsmen have discretion to override that restriction if they think

the circumstances demand. We are familiar with that in our constituency surgeries. We have to be clear that people have exhausted the legal remedies, and are not at the same time pursuing a legal recourse, before we refer them to an ombudsman. Unless the discretion to override the restriction has been exercised, public sector ombudsmen confine themselves to cases in which the action that is complained of is not unlawful, but nevertheless allegedly causes injustice as a result of maladministration.

When ombudsmen were originally set up, or when the concept was introduced in this country, it was done in an attempt to give the citizen a fairly straightforward, simple means of attempting to redress a grievance without necessarily having to go to court or prove that something unlawful had happened.

The jurisdiction of the pensions ombudsman includes the power for him to investigate complaints of injustice caused by maladministration. However, unlike other public sector ombudsmen, far from discouraging his involvement with complaints that could be subject to legal proceedings, his jurisdiction expressly confers on him the ability to determine disputes of law and fact. His determinations are subject to a right of appeal to the High Court on a point of law.

We raised this issue because in a number of judgments in the High Court, judges have expressed unhappiness that the ombudsman is providing remedies although the Court thinks that no unlawful act has taken place. The view of the pensions ombudsman is that that is precisely what we as parliamentarians, and our predecessors, intended when we established ombudsmen to deal with disputes about the management or administration of pension schemes. However, the courts have started to kick up, and complain that the ombudsman is trespassing into their territory.

In addition to being unhappy if the pensions ombudsman comes up with a different remedy, and in different circumstances, to what the courts would provide, judges, in various judgments, have also stated that the amount of financial compensation that the pensions ombudsman has power to award to redress injustice caused by maladministration should be limited. Judges have suggested that such awards should be between £200 and £1,000. However, the pensions ombudsman, for one, considers that the amount of any award should reflect the injustice that has been caused and not be subject to an arbitrary limit imposed without statutory authorisation.

The Pension Schemes Act 1993, to which we shall be referring when we reach later amendments, provides that the pensions ombudsman may direct any person responsible for the management of the scheme to take such steps as he may specify. It might be thought that Parliament had clearly already spelt out in the Act and in the debates at the time that such a provision allows the ombudsman to provide the remedies, even if the courts, acting in accordance with precedents, do not, and to provide remedies for maladministration even if the action regarded as maladministration would not be regarded by the

courts as unlawful. At least one judge has commented that if Parliament had intended such a result, the legislation would have spelt that out more clearly, and that it would therefore be helpful if Parliament underlined the judge's view.

In other words, the legal profession seems to be questioning the role of the pensions ombudsman and his legal powers. Because we were discussing a new ombudsman—although this would be doubly relevant if that were to be the same person—I thought that it was worth having a debate, and making it clear that both sides of the Committee do want the ombudsman to have powers independent of the court, and to be able to investigate cases of maladministration even if nothing unlawful has happened, and to trespass somewhat into the area of the court's jurisdiction. If judges want us to spell that out for them, let us do that, so that there can be no dispute in court about the fact that we, as parliamentarians, intend to provide remedies for citizens through the ombudsman process. That is what my amendment would do. I do not pretend that it is perfect or that it would necessarily achieve what I hoped that it would, although it was drafted with the help of some advice from the industry.

I want us, as a Committee, to make it clear that we expect the ombudsman to provide an alternative route for people and to deal with maladministration. Moreover, there should not be arbitrary limits on the sort of remedy that he can provide. For example, they should not be limited to fines ranging from £200 to £1,000, as one judge recommended. We often find in Parliament that what we had hoped with good intentions to achieve is undermined or reinterpreted by the courts, which say that we did not spell out what we were trying to achieve clearly enough at the time. The point of the amendment is to make matters clear, and I shall be interested to hear the Minister's response to it.

Chris Pond (Labour, Gravesham)

I received a letter on such matters from the Occupational Pensioners Alliance on 26 March 2004, as did the hon. Member for Tatton (Mr. Osborne), and he has read into the record many of the important points that it made. The alliance is arguing for a tidying-up exercise to ensure consistency in the way in which the ombudsman and the courts operate in such matters.

Clause 173(5)(a) may allow regulations to be made enabling the pension protection fund ombudsman to direct the board to pay compensation in relation to a reviewable matter. Therefore, when, for example, PPF compensation has been underpaid, regulations may provide that the PPF ombudsman could direct the board to reimburse the amount underpaid, and may also include a requirement to pay interest.

Subsection (5), to which the amendment relates, refers back to the general regulation-making provision under clause 173(1), which requires regulations to make provision for the PPF ombudsman to refer a reviewable matter back to the PPF board with directions to carry out his decision. The amendment tabled by the hon. Member for Tatton would require

the PPF ombudsman to take into account remedies provided by legal action in the civil courts.

The intention, which seems straightforward and sensible, is that compensation payments would be in line with the remedies that could be achieved through the civil courts. Although I appreciate the intention behind that approach, matters that can be referred to the PPF ombudsman do not include private law disputes. The only role for the courts is in relation to judicial review or on appeal on a point of law from the PPF ombudsman. The intention is to ensure that there is an adequate statutory remedy for any infringement of rights. The regulation-making powers under clause 173 will provide the sort of remedies for which the Occupational Pensioners Alliance and the hon. Member for Tatton argue. With that reassurance, I hope that the hon. Gentleman will feel able to withdraw the amendment.

George Osborne (Conservative, Tatton)

I accept that we are talking about the PPF ombudsman, but I was trying to create a slightly broader debate involving the pensions ombudsman. I wanted the Under-Secretary to spell out that the Committee, in approving the ombudsman, is making it clear to the courts that we see a distinct role for ombudsmen in such circumstances. We will talk about amendments relating to the powers of the pensions ombudsman later. We do not expect the courts continually to try to limit ombudsmen's powers or to complain that ombudsmen are straying on to their territory. The ombudsman service—whether we are talking about the pensions ombudsman, the PPF ombudsman or those with whom we deal, such as the parliamentary ombudsman—is very useful to members of the public who do not want to get heavily drawn into litigation. The intention of the amendment was to make that clear. If the Minister assures me about that, I will be happy to withdraw my amendment.

Chris Pond (Labour, Gravesham)

I think that we are at one in what we are trying to achieve, and in what the proper role of an ombudsman, ombudsperson, or whatever we call them, should be. It is important that the PPF ombudsman can decide for himself or herself what remedy should be available to a complainant, and it is inappropriate for his or her judgment to be fettered in that respect. Although the mechanisms for providing a remedy will be set out in regulations—I hope that I can reassure the hon. Gentleman that they will provide the sort of protection for which he is looking—we do not have any plans to set limits on the amount of compensation that the PPF ombudsman can direct the PPF board to pay, because we think that that must be a matter of judgment for the ombudsman.

George Osborne (Conservative, Tatton)

I am grateful for that further clarification, which put into even plainer English what I was hoping to achieve. With that reassurance from the Under-Secretary, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 173 ordered to stand part of the Bill.

Clause 174 - Investigation by PPF Ombudsman of complaints of maladministration

George Osborne (Conservative, Tatton)

I beg to move amendment No. 537, in

clause 174, page 111, line 38, at end insert—

'( ) To assist him in an investigation, the PPF Ombudsman may obtain advice from any person who in his opinion is qualified to give it and may pay to any such person such fees or allowances as he may determine.'.

I said earlier that I would talk about the Pension Schemes Act 1993. The amendment would give the PPF ombudsman the powers given to the pensions ombudsman in the 1993 legislation. It must be said that there is a striking difference between the Bill and previous legislation on the subject. To be honest, I stumbled across that only when I was preparing for the Committee. That striking difference is borne out by clause 174, which leaves the Government to determine by regulation an enormous range of investigatory powers that the PPF ombudsman should have.

If one reads the 1993 Act, as I am sure that members of the Committee did in preparation for these proceedings, one will have been struck, as I was, not having been a Member of this place at that time, that it spells out the powers of the ombudsman. It does not leave them to regulation, but sets out clearly what they will be. Amendment No. 537 replicates the powers that are spelt out in section 150(6) of that Act, which give the pensions ombudsman the power to

''obtain advice from any person who in his opinion is qualified to give it and may pay to any such person such fees or allowances as he may with the approval of the Treasury determine.''

I have attempted to insert similar wording in the Bill, because it is important to establish in the legislation what the powers of the new ombudsman will be. There is no good reason not to, since a previous Government and the officials who drafted the legislation 11 years ago—some of whom, probably, are working on this Bill—decided then to put into that Bill the powers of the pensions ombudsman. Now, when the new powers for the PPF ombudsman are being drafted they leave it all to regulation under clause 174.

The clause seems symptomatic of a growing desire to leave everything to regulation and statutory instrument, rather than spelling out in the legislation what are substantial powers. I know that at various stages of the passage of this legislation we have discussed clauses that give the pensions regulator various powers. However, we are talking about substantial powers to, in some cases, enter premises and, in this case, commission advice and pay for it out of taxpayers' money. It is sensible to make clear in the legislation what we are seeking to do. I cannot see how the Government could object to the amendment, since it merely replicates the powers that the pensions ombudsman has under the 1993 Act. However, no doubt the Minister will tell me why he cannot accept it.

Chris Pond (Labour, Gravesham)

I am pleased that the hon. Gentleman is sitting down, because he is about to get another shock—something that will be unsettling. I accept the principle of the points that he made. The PPF

ombudsman must have the information necessary to carry out his or her investigations.

Section 150 of the 1993 Act, to which he referred, makes practical provision for the pensions ombudsman to obtain and pay for expert advice that would assist an investigation. The proposed amendment in relation to the PPF ombudsman is sensible but unnecessary. Clause 174(2)(h)(iii) provides that the PPF ombudsman may consider ''expert evidence'' when investigating maladministration cases. Subsection (2)(j) states that he may pay

''the costs or expenses of prescribed persons''.

Similar provisions in clause 173 apply when the ombudsman is investigating reviewable matters. The persons whose costs he may pay will include qualified persons who provide expert advice or who attend an oral hearing of the PPF ombudsman. For example, that may encompass actuaries, pension lawyers and insolvency experts.

The hon. Gentleman raised the important question why we have so many regulation-making powers in clauses 173 and 174. He made a cross-reference to the 1993 Act, in which rather more was included in the Bill than in regulation. I think that he would accept that we are talking about different roles and that clauses 173 and 174 set out the regulations—the detailed procedures—such as who can request a review by the PPF ombudsman, how such reviews are to be made and the time limits for doing so. We believe that it is sensible to allow the flexibility of making such provisions in the regulations, rather than putting them in the Bill, given that we are dealing with an ombudsman who will oversee the operation of a body that my hon. Friend the Minister described this morning as a unique institution, and that does not exist in any recognisable form at the moment.

Although I accept in principle many of the points that the hon. Gentleman has made, I ask him to withdraw the amendment, on the basis that it is not needed to achieve the objectives that he and I would like to see met.

George Osborne (Conservative, Tatton)

I knew when I tabled the amendment that the Under-Secretary would accept it in principle, because it is about perfectly reasonable powers that I am sure will be made under the regulations. I was trying to highlight the fact that in 11 years there has been a change in the way in which legislation is brought forward.

I do not accept the Under-Secretary's argument—I cannot believe that he really accepts it—that the PPF ombudsman would be a fundamentally different beast from the pensions ombudsman. When Parliament created the pensions ombudsman, that was a unique, first-time-ever role. Arguably, the pensions ombudsman faces a much broader range of issues and more complex issues, as he often deals with private sector pensions as well as public sector bodies. At least the PPF ombudsman is just dealing with one organisation: the PPF.

I do not accept the Under-Secretary's case that there is a fundamental difference between the two ombudsmen. In 1993, Parliament saw fit to put all these powers into a Bill. Now we find that Parliament

is giving the Government pretty general powers to regulate. That is a point often made in Standing Committees by Opposition spokesmen of whatever party is in opposition at the time. However, that distinction was a striking example. I have made my point, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 174 ordered to stand part of the Bill.

Clause 175 - Determinations of the PPF Ombudsman

George Osborne (Conservative, Tatton)

I beg to move amendment No. 538, in

clause 175, page 111, line 44, at end insert—

'( ) The PPF Ombudsman may refer any question of law arising for determination in connection with a reviewable matter to the High Court or, in Scotland, to the Court of Session.'.

I am in danger of sounding like a cracked record on this point. [Interruption.] Well, perhaps I will repeat the arguments that I have just made; they also apply to this amendment. I seek to write into the clause the same powers that were given to the pensions ombudsman under section 150(7) of the Pension Schemes Act 1993. My amendment would give the PPF ombudsman the power to

''refer any question of law arising for determination in connection with a reviewable matter to the High Court or, in Scotland, to the Court of Session.''

It seeks to put in the Bill powers that I am sure the Under-Secretary will say the PPF ombudsman will have anyway under the regulations. However, without repeating the arguments, I would like to hear what the Under-Secretary has to say.

Chris Pond (Labour, Gravesham)

I warn you, Mr. Griffiths, that there is a real danger of fraternal co-operation and partnership breaking out in the Committee. Again, I am glad to see that the hon. Member for Tatton is sitting down because I think that he is right.

As clause 175 stands, an individual unhappy with the determination of the PPF ombudsman may appeal on a point of law only to the High Court or the Court of Session in Scotland. The Opposition amendment would also allow the PPF ombudsman—himself or herself—to refer a complex point of law that needs to be resolved and on which he or she needs guidance from the High Court or Court of Session in Scotland. It would replicate the provisions in the Pension Schemes Act 1993, which states in section 150(7) that the pensions ombudsman may refer any question of law to the High Court or the Court of Session in Scotland.

For that reason, the amendment is correct in principle, and in principle we wish to accept the point made by the hon. Member for Tatton and that made by the organisations through him. A provision that allows the PPF ombudsman to refer matters to the courts where the question relates to a complex point of law is as appropriate for the PPF ombudsman as it is for the pension ombudsman. We want to look at the wording of such an amendment, and the legal

insulation of the clause, but I give the hon. Gentleman a commitment that, if he is prepared to withdraw his amendment, we will come back as soon as possible with a Government amendment to achieve the same effect. In other words, rather than always leaving it to individuals to decide whether a point of law should be referred to the High Court or Court of Session in Scotland, the PPF ombudsman should also have the power to refer questions of law to those courts. I ask the hon. Gentleman to withdraw his amendment on the understanding that we will introduce our own to the same effect.

George Osborne (Conservative, Tatton)

In my limited experience of Standing Committees during my three years here, it has once or twice happened to me that the Government have said, ''We are going to accept your amendment.'' However, just as I think that I am about to change the law of the land, the Government snatch victory away and say, ''But, of course, we are not sure that the amendment is properly worded, and we will have to go away and make sure that it is absolutely correct''—even though all I have done is replicate something from an Act of Parliament. I will, of course, accept my victory in principle.

Chris Pond (Labour, Gravesham)

Perhaps this will make the hon. Gentleman feel better: if we find that his wording is absolutely right, we will use his wording and it will become known as the Tatton amendment.

George Osborne (Conservative, Tatton)

My constituency is famous for many things, and I have been doing all I can to find other things that it can be famous for. I concede that this will be a small step in that direction. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 175 ordered to stand part of the Bill.

Clause 176 - Obstruction etc of the PPF Ombudsman

Nigel Waterson (Conservative, Eastbourne)

Welcome back to our deliberations, Mr. Griffiths. I have a couple of queries about the clause. In amendments debated this morning we tried to set out some powers that the PPF ombudsman, who may be the pensions ombudsman, would have to investigate matters, take evidence, call witnesses and so on. It is clear from earlier clauses that there will be a series of regulations in due course that will set out the way the ombudsman will conduct his business.

I was therefore puzzled by clause 176. On a logical reading of the Bill, one would think that the matters in this clause would be set out in regulation. As far as my research has taken me, there does not seem to be anything in the Pensions Act 1995 that replicates this provision. We agree as a matter of principle that there should be penalties that can be imposed on anyone who seeks to obstruct the PPF ombudsman, but it would make more sense to make that part of a general code as to how the ombudsman can conduct investigations and determinations under his or her remit.

I have a query that Scottish Members might be able to help me with. Subsection (4) seems to suggest that there is no such offence as contempt of court in Scotland. That might say a great deal about the rough and tumble of Scottish legal proceedings—or the opposite. It would be interesting to know why there is that slightly bizarre distinction.

Chris Pond (Labour, Gravesham)

We do not expect this provision to be used frequently—certainly not on a daily basis. We expect the PPF ombudsman to reach determinations based on the evidence before him. We do not anticipate that anyone would deliberately obstruct him in carrying out his functions in Scotland or anywhere else. However, in the unlikely event that the PPF ombudsman is unlawfully obstructed, this clause allows him or her to certify the offence in question to the county court, or sheriff in Scotland. The court will, if required, order a punishment as though the person were in contempt of court.

Similar provision is made for the pensions ombudsman under section 140 of the Pension Schemes Act 1993. The hon. Member for Eastbourne (Mr. Waterson) said he could find no reference to a similar provision in the Pensions Act 1995; that is because it was in the Pension Schemes Act 1993. The power has never been used, although advising people that it will be used has proved a useful deterrent. We envisage that the power will be used rarely if at all, but we need to ensure that the PPF ombudsman has sufficient powers to carry out his functions effectively.

Question put and agreed to.

Clause 176 ordered to stand part of the Bill.

Clause 177 - Backdating the winding up of eligible schemes

Chris Pond (Labour, Gravesham)

I beg to move amendment No. 501, in

clause 177, page 112, line 41, at end insert—

'(1A) Subsection (2) also applies where—

(a) the trustees or managers of an eligible scheme—

(i) make an application to the Board under subsection (1) of section 101, or

(ii) receive a notice from the Board under subsection (5)(a) of that section, and

(b) the winding up of the scheme begins—

(i) at or after the time the application is made or notice is received, but

(ii) not later than the issuing of a notice in relation to the scheme under section 102(2) or (3).'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss Government amendments Nos. 502 and 503.

Chris Pond (Labour, Gravesham)

These are minor drafting amendments to clause 177. They ensure that it applies to schemes for which an application or notification has been made to the PPF under clause 101. This would apply to schemes where there is no insolvency event under clause 95—for example, some public sector schemes without a Crown guarantee, or schemes with a foreign sponsoring employer.

Clause 177 provides for the backdating of the winding up of eligible schemes in certain

circumstances. The clause applies where a qualifying insolvency event under clause 95 has occurred in relation to the sponsoring employer of an eligible scheme or an application or notification has been made in respect of an eligible scheme under clause 101 and the scheme is thus subject to a PPF assessment period. The power is designed to apply in a few specific circumstances.

As provided for in subsection (2)(a), the clause applies where the regulator makes an order under section 11(3)(a) of the Pensions Act 1995 directing the winding up of the scheme during the assessment period. Although clause 107 prevents scheme wind-up during the assessment period, it does not prevent the pensions regulator from making an order directing the wind-up of the scheme. That is because there are circumstances where it would be in the interests of both the PPF and scheme members to wind up a scheme during the assessment period. Winding up the scheme may enable the debt owed by the employer to be recovered earlier by the PPF in its capacity as creditor of the debt. Should the PPF then cease to be involved with such a scheme, the winding up of the scheme is backdated to the date of the qualifying insolvency event. That ensures that the priority order on winding up applies from the beginning of the assessment period.

Subsection (2)(b) is designed to deal with cases in which a qualifying insolvency event has occurred in relation to the employer but the board refuses to take over a scheme as a result of the moral hazard provisions in clauses 115 and 116. Such schemes were not eligible for PPF compensation and thus should not have come into the assessment period in the first place. The effect of a scheme coming into an assessment period was to prevent it from starting to wind up, when it otherwise would have done so. The clause provides that if a scheme winds up after the PPF has ceased to be involved with it, the trustees can backdate the winding up to the date of the qualifying insolvency event.

Clause 177 does not cover schemes required, under clause 119, to wind up because their assets are sufficient to buy out the protected liabilities—broadly speaking, the PPF level of benefits—because similar provision to backdate wind-up is made in clause 177(6). I hope that hon. Members find that elucidation helpful; I know that they have been following every word. I commend the amendments to the Committee.

Amendment agreed to.

Amendments made: No. 502, in

clause 177, page 113, line 2, leave out 'that qualifying insolvency event' and insert

'the event within subsection (1)(a) or, as the case may be, (2)(a)'.

No. 503, in

clause 177, page 113, line 8, at end insert—

'( ) Subsection (4) of section 100 applies for the purposes of subsection (1A) of this section as it applies for the purposes of subsection (1) of that section.'.—[Mr. Pond.]

Question proposed, That the clause, as amended, stand part of the Bill.

Nigel Waterson (Conservative, Eastbourne)

I cannot possibly fault the Under-Secretary's erudition on the amendments; that is why I did not speak on them. However, I have a query on the scheme mentioned in clause 177. Will the business of backdating the winding up of eligible schemes contribute in any way to the pressures on the PPF in its early stages? We heard anecdotal evidence in earlier debates about any number of schemes that are staggering on, waiting to fall into the welcoming arms of the PPF when it starts operating. Does the Minister think that the provisions will increase the pressures, or will they make a difference in only a tiny proportion of cases, and, in a relatively short time, in respect of only a few schemes? I am sure that the Department will have made projections. Or are the provisions a loophole that people who are waiting and hoping to take advantage of the PPF can operate to their advantage?

Chris Pond (Labour, Gravesham)

We are carefully attuned to possible loopholes, so I can give the hon. Gentleman a reassurance that that is not the case. The power is designed to apply in a very few specific circumstances, which I outlined when speaking to the amendments. Schemes will not be able to come under the PPF unless the insolvency event happens after A-day and winding up occurs after A-day. I hope that that gives the hon. Gentleman the reassurance that he requires.

Question put and agreed to.

Clause 177, as amended, ordered to stand part of the Bill.

Clause 224 - Dissolution of OPRA

Chris Pond (Labour, Gravesham)

I ask the Committee to cast its mind back to the halcyon days of the Committee—to 9 March, when we debated clause 7, which provided for the transfer of the Occupational Pensions Regulatory Authority's functions to the regulator, and made corresponding changes to definitions in previous Acts.

Clause 224 makes specific provision for the dissolution of OPRA and includes a power to ensure smooth transition from the current authority to the new regulator. An order under the clause will transfer all property, rights and liabilities to either the pensions regulator or the Secretary of State, as appropriate. Pensions tracing—putting people in touch with pension schemes with which they have lost contact—is currently performed by OPRA, but it will not be a function of the pensions regulator, hence the need to include the Secretary of State in the provision as well as the pensions regulator.

The clause will also ensure that there is continuity of regulation by allowing, among other things, cases that were under investigation by OPRA to transfer to the new regulator. We have made specific provision in

clause 224(3) for the transfer of information from OPRA to the new regulator, which will ensure that any information transferred is subject to the safeguards considered by the Committee on 11 and 16 March.

Amendment No. 504 is a technical amendment to the provision, which has corrected a typographical error.

Steve Webb (Liberal Democrat, Northavon)

I apologise to the Under-Secretary for missing his introductory remarks, but my question relates to what he just said. He referred to pensions tracing, which is important because people lose touch with their pensions and pension funds lose touch with their pensioners. Given that the national insurance system seems to lose touch with everybody, this is an important matter. Pensions tracing is done by OPRA, but the Minister implied that when there is no OPRA the regulator will not do it, for reasons that he did not specify. It has been decided that the Secretary of State will do it.

I should like to know how big a problem this is, and how much of what OPRA currently does is concerned with pensions tracing. How big a problem is there with people losing track of their pensions, and to what extent is the problem that schemes lose track of their members? Is that anything to do with what we are talking about? Are we talking about individuals? What is the scale of the problem of lost pensioners and lost pensions? When the Secretary of State is involved in pensions tracing, will I phone Newcastle if I have lost my pension? Who is the Secretary of State, as we so often say?

Chris Pond (Labour, Gravesham)

The pension-tracing work of OPRA is a specific part of its function. The hon. Gentleman was close to the truth in asking whether he should phone Newcastle, because that is where the pension-tracing functions are currently carried out. We have a complement of 70 staff doing that work in Newcastle, compared with 240-odd staff based in Brighton undertaking OPRA's other functions. That is an important function in OPRA's current work, and one to which we wish to continue to give priority.

However, in the establishment of the new pensions regulator, which, as we have discussed at some length, will be a very different sort of regulator, that part of OPRA's current functions fits more sensibly within the structure of the Department for Work and Pensions. Although no decisions have been made on the location of the staff who are currently working on pensions tracing, the hon. Gentleman's suggestion that he should phone Newcastle is still a pretty good bet. We can provide further information on that subject to the Committee, if it would be helpful.

Question put and agreed to.

Clause 224, as amended, ordered to stand part of the Bill.

Clause 225 - Transfer of employees from OPRA to the Regulator

Nigel Waterson (Conservative, Eastbourne)

I have just one point, which is something of a reprise of a much earlier discussion about the effects of the Transfer of Undertakings (Protection of Employment) Regulations 1981. I remind Committee members about the crucial role that Eastbourne played in TUPE's history, in connection with the Eastbourne dustmen. Leaving that aside for the moment, we had great debates when discussing the regulator, although that seems a long time ago now. We heard that the new body would be a new kind of regulator; that it would be focused, have a light touch with schemes where there were no great worries, and be much more intrusive where there were real concerns about how schemes were being operated.

Although we must recognise that TUPE exists, is this not a temptation to move the entire staff of OPRA to the regulator, bag and baggage? How will the regulator ensure that a group of people with the best possible intentions, who have been seen to be too keen on box ticking, but not keen enough to reach the heart of the problems with pension schemes, will be re-educated to carry out the new task? Will they be marched off into the jungle to be re-educated, or will hard decisions be made about how some of them will not make the grade, and so will not be TUPE'd across? I should not like to see the tail wagging the dog because of the Government's obeisance to trade unions and labour law, as opposed to setting up the regulator in accordance with the Government's own wishes. They want a 21st century regulator to deal with the problems of pension schemes in the 21st century.

Steve Webb (Liberal Democrat, Northavon)

I wish to make one simple point. The transfer of employees from the Occupational Pensions Regulatory Authority to the regulator prompts the question, to where will they be transferred? An advertisement has been placed for the new pension protection fund to be based in the south of England. Given the Government's drive to move everything out of expensive London office accommodation into cheaper parts of the country, especially high unemployment areas, can the Under-Secretary of State say to where those employees who are based predominantly in Brighton and those who are employed in Newcastle will transfer? Has the Chancellor's drive to move people out of south-east England been successful? Has it reached the Department for Work and Pensions or, at just the point at which a new organisation is being set up, is the Department reverting to the old ways?

Chris Pond (Labour, Gravesham)

We discussed such matters at some length earlier in our proceedings. However, hon. Members are right to raise them again in the context of clause 225, which is specific about ensuring that the terms and conditions of employment of staff transferring from OPRA to the regulator will be protected. I am sure that all members of the Committee want to make sure that those conditions are protected. In our earlier discussions, hon. Members wanted to make it clear that they had nothing but admiration for the work of OPRA, although there is recognition that the tick-box approach, as the hon. Member for Eastbourne described it, is not the most effective way forward.

That is why we are devising the new form of regulator. I say to the hon. Gentleman that many of the proposals for the changes that are necessary have come from other reviews into the way in which OPRA was fulfilling its function, but many of the ideas for the new regulator came from OPRA itself. It is not a matter of transferring across the same cultures and the same approach. Many of the people who will transfer across with their expertise will carry with them an enthusiasm for the new approach.

Tony Hobman, the new chief executive, has now been appointed. Members of the Committee should have received a letter to that effect before Easter. He has already made it clear that there will be new culture requirements. In many cases, those who are not happy to accept the new approach have already left and no doubt others will, too. It is important that we recognise that OPRA undertook a good job within the constraints imposed on it by law, but that there is also an understanding within the organisation—as within the Committee—that a new approach is needed.

In response to the hon. Member for Northavon, I can confirm that the new regulator will be based in Brighton as OPRA is based at present. I am not sure whether that is the first time that statement has been placed on the record. If so, I am pleased to have told the Committee.

Question put and agreed to.

Clause 225 ordered to stand part of the Bill.

Clause 226 - Dissolution of the Pensions Compensation Board

Clause 227

Chris Pond (Labour, Gravesham)

Clause 227 is the first of three clauses dealing with the service of notification and electronic working. It makes general provision for any notification or sending of documents authorised or required by the Bill. It might be helpful to make some general observations about those clauses.

As hon. Members are aware, it is the Government's policy to make our services available online by 2005, and to allow people to communicate with public bodies electronically if they wish. Hon. Members also know that we have no intention of compelling anyone to accept or send an e-mail or any other form of electronic communication. I know that certain groups have been concerned about that for reasons of their own faith. These clauses follow equivalent provisions dealing with notification and electronic communication elsewhere in primary legislation—for

example, in the current Energy Bill. This Bill ensures a consistent approach across the statute book.

I thought that it was worth making those few comments. I was tempted to send Committee members an e-mail to that effect, but decided it was more appropriate to tell them verbally.

Nigel Waterson (Conservative, Eastbourne)

I am grateful to the Minister for his explanation of these new-fangled methods. If some of his briefing notes were intended to get to people like me in time, e-mail is a good way of doing that. I would like to propose that idea, even at this late stage, and toss it over to the Government side. Even us fuddy-duddy old Tories use e-mail.

David Cairns (Labour, Greenock and Inverclyde)

Eric Forth doesn't.

Nigel Waterson (Conservative, Eastbourne)

Perhaps not, but I find it remarkably reliable on the whole, even if I spend hours printing stuff off.

Question put and agreed to.

Clause 227 ordered to stand part of the Bill.

Clause 228 - Notification and documents in electronic form

Chris Pond (Labour, Gravesham)

I beg to move amendment No. 558, in

clause 228, page 153, line 17, at end insert

'and in the application of this section to Northern Ireland by virtue of section 246(2)(f)(ii) also includes the Department for Social Development in Northern Ireland'.

The amendment expands the definition of ''relevant authority'' in so far as this clause extends to Northern Ireland. The current definition of relevant authority comprises the board, the pensions regulator and the Secretary of State. The amendment provides that the Department for Social Development in Northern Ireland, which is responsible for pensions matters in Northern Ireland, will also be a relevant authority. This means that the provisions of this clause will apply to Northern Ireland and in like manner to other relevant authorities.

Amendment agreed to.

Clause 228, as amended, ordered to stand part of the Bill.

Clause 229 - Timing and location of things done electronically

Nigel Waterson (Conservative, Eastbourne)

I would like to make just a brief point about subsection (4) and the question of presumptions of notification being made within a certain time. When I was a young lawyer—

George Osborne (Conservative, Tatton)

Many years ago.

Nigel Waterson (Conservative, Eastbourne)

As my hon. Friend reminds me, many years ago.

David Cairns (Labour, Greenock and Inverclyde)

There was no e-mail then.

Nigel Waterson (Conservative, Eastbourne)

There was something called Telex, which was fascinating. That was about it; there were not even fax machines, which was something of a blessing, although that does not seem to have hampered the workings of the Minister's private office in terms of the explanatory notes. There was a presumption in those days—there may still be now for all I know—that if a person posted a document to somebody in the UK with a first-class stamp it would arrive the next day. The court could work on that as a presumption on the question of giving due service of a legal document. That may still be the case although, sadly, first-class mail is infinitely less reliable than it was all those years ago. The regulator and the Post Office continually argue the toss about how badly they missed the targets, but I forget the percentages for that.

The Under-Secretary is clearly excited about the electronic age, but I want to press him a little more on some of the presumptions that have been made. Some of them can be quite dangerous. E-mails can vanish into the ether and then pop up days later for no explicable reason—and some of them never get sent at all, of course. There are real problems with electronic communication; in its way it is every bit as complex as the old-fashioned method.

I urge caution with regard to presumptions. What safeguards does the Department have in mind? Has there been any serious attempt to consult with the various professional bodies, such as the Law Society, about how valid these presumptions are? There must be a great raft of relevant experience and procedures—in the High Court for example—about electronic communication. I am not entirely up to speed on that, as might be expected, but we must be cautious; when people are being given notice of something serious and important, assuming that they will get the communication within a certain time scale may not reflect the reality of the situation.

Chris Pond (Labour, Gravesham)

The hon. Gentleman raises an important point. Clause 229 allows for provisions to be made for proving in legal proceedings that an electronic communication satisfies the requirements of an enactment under this Bill in respect of timing and location.

It is important that people receive information in such a way that they feel it can be relied upon; they must also be sure that they will get it in an appropriate time scale and that it can be guaranteed in some way. It is partly for that reason that we are also making provision that some of this information can be transferred electronically, as opposed to by what some in the industry now describe as ''snail mail.''

The hon. Gentleman was right to ask whether there will be consultation on the presumptions that are included in the order, and I can assure him that there will be.

Question put and agreed to.

Clause 229 ordered to stand part of the Bill.

Clause 230 - Overriding requirements

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 559, in

clause 230, page 154, line 13, leave out 'section 204' and insert

'sections [no indemnification for fines or civil penalties] and 204'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to consider the following:

Government amendments Nos. 567, 568 and 570.

Government new clause 32—No indemnification for fines or civil penalties.

Malcolm Wicks (Labour, Croydon North)

Welcome back to the Committee, Mr. Griffiths. As a courtesy to the Committee, before I speak to these amendments I want to say that we have agreed through the usual channels to conclude our debate this afternoon after discussion of this clause. That is because the Government recognise that the new clauses dealing with the requirement to consult will be the cause of considerable debate but as they were tabled only on Friday the Opposition's amendments are starred on this morning's amendment paper. In the interests of thorough scrutiny and proper courtesy we are content to ensure that there is thorough discussion on these important clauses, and we look forward to that occurring on Thursday.

New clause 32 replaces section 31 of the Pensions Act 1995, which provides that when a trustee of a trust scheme is liable to pay a fine, either following conviction for an offence or from a penalty imposed by the regulator, the assets of the scheme may not be used to indemnify the trustee. Section 31 also provides that if any trustee has been reimbursed in this way they may be guilty of an offence if they are aware or have reasonable grounds to believe that that has happened. The provisions extend to reimbursements for premiums for insurance against such fines being imposed. Section 31 ensures that trustees are personally responsible for any final penalty for which they are liable. Those measures are entirely right and sensible. The new clause has the effect of extending those provisions so that they would cover not only trustees of trust schemes, but also managers of personal pension schemes.

I believe that it is right that members of personal pension schemes should receive the same amount of protection as members of occupational schemes, whenever that is appropriate. The new clause would ensure that managers of personal pension schemes, like trustees of trust schemes, would be personally responsible for their actions, and that any fine imposed on them as a result of their actions could not be passed on to scheme members.

The four amendments that travel with the new clause are technical in nature and would ensure consistency throughout the legislation. Amendment No. 570 would repeal section 31 of the 1995 Act; amendments Nos. 567 and 568 would remove references to section 31 that become unnecessary as a

consequence of the repeal; amendment No. 559 would ensure that the new clause would override any scheme rules that may otherwise seek to enable trustees to be indemnified.

Nigel Waterson (Conservative, Eastbourne)

I am grateful to the Minister for that explanation, which seems to make eminent sense. Before I come to the detail, I should like to thank the Minister for his indulgence. We were somewhat wrongfooted by these late new clauses, although I am sure that that was nobody's intention. We have now tabled amendments, but they are starred amendments.

It is only fair to be totally balanced about this; it is only fair on the officials that they should have a chance to brief Ministers on our amendments. It is unfortunate, but we will probably make more progress in the long run if we call a halt now and start afresh on Thursday. As the lawyers would say, that is entirely without prejudice to any new amendments or new clauses that may surface between now and then, with or without explanatory notes. By the way, my e-mail address is watersonn@parliament.uk.

We can see the wisdom of new clause 32; it largely replicates something in earlier legislation, as the Minister said. Of course it is right that the assets of a scheme should not in any way respond to fines of civil penalties personal to the trustees or the managers of a scheme. However, that raises an echo of an issue that we dealt with some time ago in our amendments: the question of indemnifying trustees and managers in situations in which they have quite properly incurred liabilities.

I am slightly undecided as to where we left that debate; I suspect that we withdrew our amendments and that nothing much else happened. However, perhaps the Minister said that he would come back to the Committee on the issue. When a scheme is in effect taken over by the PPF, we think it appropriate that there should be proper measures in place to ensure that legitimate liabilities incurred by trustees and managers, which are not properly ongoing liabilities, should be covered in some way by a full indemnity. I am sure that we tabled some such amendments and that there was a debate about the matter; however, beyond that my memory fails me.

Malcolm Wicks (Labour, Croydon North)

Let me too refresh my memory on that more general point about indemnity. I thank the hon. Gentleman for his support for this measure. If people are to be penalised financially as a result of their conduct, it would be absurd if the scheme rather than the individual ended up writing the cheque. I thank the hon. Gentleman for his support.

Amendment agreed to.

Clause 230, as amended, ordered to stand part of the Bill.

Further consideration adjourned.—[Margaret Moran.]

Adjourned accordingly at twenty-six minutes to Four o'clock till Thursday 22 April at half-past Nine o'clock.