Pensions Bill

Public Bill Committee, 22 April 2004.

Standing Committee B

Pensions Bill

Malcolm Wicks (Labour, Croydon North)

I beg to move,

That the Order of the Committee of 9th March 2004, as amended by the Orders of the Committee of 16th March 2004, be further amended by the substitution of the following Table for the Table referred to in paragraphs (2), (3) and (4) of the Order of 9th March—

TABLE Sitting Proceedings Time for conclusion of proceedings 22nd April (9.30 am) Clauses 224 to 242, Schedule 11, Clause 243, Schedule 12, Clauses 244 to 248; remaining New Clauses, New Schedules and remaining proceedings on the Bill (so far as not previously concluded). — 22nd April (2.00 pm) Clauses 224 to 242, Schedule 11, Clause 243, Schedule 12, Clauses 244 to 248; remaining New Clauses, New Schedules and remaining proceedings on the Bill (so far as not previously concluded). — 27th April (9.30 am) Clauses 224 to 242, Schedule 11, Clause 243, Schedule 12, Clauses 244 to 248; remaining New Clauses, New Schedules and remaining proceedings on the Bill (so far as not previously concluded). — 27th April (2.30 pm) Clauses 224 to 242, Schedule 11, Clause 243, Schedule 12, Clauses 244 to 248; remaining New Clauses, New Schedules and remaining proceedings on the Bill (so far as not previously concluded). — 29th April (9.30 am) Clauses 224 to 242, Schedule 11, Clause 243, Schedule 12, Clauses 244 to 248; remaining New Clauses, New Schedules and remaining proceedings on the Bill (so far as not previously concluded). 5.00 pm'.

Welcome back, Mr. Griffiths. I understand that you will be with us for both sittings today.

The Programming Sub-Committee met last night for a final time and agreed the order of proceedings for today and next week. I am grateful to the hon. Members for Eastbourne (Mr. Waterson) and for Northavon (Mr. Webb) for their agreement. I would also like to thank them for their forbearance on the subject of Government amendments.

The hon. Member for Eastbourne asked for information on further Government amendments to be tabled in Committee, which I am happy to give. It is our intention to table this week—which I think will mean tomorrow—a group of eight new clauses covering a second element of moral hazard. They will deal with financial support arrangements. We also hope to table a new clause dealing with cash-equivalent transfers for early leavers. If, for any reason, that proves impossible to table this week, we will introduce that new clause on Report rather than keep the Committee waiting.

Those are the only remaining Government amendments for consideration by this Committee, subject to any further new clauses that Opposition Members may wish to table. It may be possible to conclude our deliberations on Tuesday next week, although we have Thursday to fall back on if that is not the case. We have previously given details to hon. Members about amendments to be tabled on Report, and those have not changed. We will also be introducing the final element of our moral hazard provisions at that stage. We will continue to provide briefing on all new clauses for the remainder of the Committee stage and on Report.

Nigel Waterson (Conservative, Eastbourne)

Good Morning, Mr. Griffiths. I am grateful to the Minister for Pensions for that information. I am sure that everybody from the Minister downwards is doing their best, and the Minister is good enough to talk about my forbearance, but it is wearing a little thin. As he said, if the Government table more amendments this week, they must do so today or tomorrow, and tomorrow, I am sure in common with all Committee members, I shall be in my constituency.

The real issue is that, although we have given our consent to the programme motion, would it matter if we had not? All things being equal, the Minister may be right and we will finish our proceedings on Tuesday. However, I am not committing myself to that, not least because of what I have described as the elephant in the Committee Room: how much more is to come? We will have eight new clauses on moral hazard, which is a very broad concept, as I gathered when I saw the last group of new clauses on the subject. It covers a range of issues, such as anti-avoidance, which is a strange issue. When I stumbled across the possibility of dealing with this Bill many months ago, the issue of anti-avoidance was one of the first things that people mentioned to me, so it is slightly odd that it is taking so long to table these new clauses—although I accept that highly technical, legal issues are involved.

For my part, I think that Tuesday is something to aim for, but let us see what happens. We must reserve judgment on the eight new clauses on moral hazard and the new issue of a cash-equivalent transfer for early leavers. It is not for me to tell the Government how to conduct their business, but if we are up against it timewise, it might be sensible to deal with that issue on Report. However, Report is beginning to get a bit crowded in terms of both new and existing issues. I will give notice that the provisional intention of Conservative Members is to press for two full days on Report. Of course, that is subject to seeing all the Government's further amendments and new clauses after the end of the Committee stage.

I assume that when we get those eight new clauses they will be accompanied by some explanatory notes almost instantaneously, because such notes are helpful and they are reliably getting through to us, so let us ask for them.

There is a further issue, which was raised at Prime Minister's Question Time yesterday. I was interested that in response to a question about using unclaimed assets to compensate the 60,000 pensioners who have

already lost out on their pensions that was put by the hon. Member for Manchester, Central (Tony Lloyd), the Prime Minister said:

''we are actively considering the position . . . We are examining what we can do in such special cases, and, in the context of the current debate on pension protection issues and legislation''.—[Official Report, 21 April 2004; Vol. 420, c. 293.]

It is nice to be noticed by the Prime Minister. I might have been forgiven for thinking that he might be wholly oblivious to all the work that we are doing in this Committee, but it is nice to have a nod from such an imperial quarter.

Assuming that the Department for Work and Pensions is still in the loop on all of that, I must ask what plans the Minister and his colleagues have to table further new clauses or amendments on that issue. It is clearly something that has overshadowed the central feature of the Bill, which is the pension protection fund, because the Bill is not designed to be retrospective. It would be nice to know whether the Government have any such plans, because that would open up a new area of debate either in Committee or on Report. Subject to that, we are happy to consent to the—[Interruption.] It is amazing; bottles are being knocked over on both sides of the Committee. Subject to the point that I raised, we are happy to consent to the motion.

Steve Webb (Liberal Democrat, Northavon)

As the Minister said, we have discussed the matter and essentially the motion before us simply allows us until the end of next Thursday to get through everything. He has given us a further steer on what additional new clauses there will be. I am slightly startled because from our original discussions we did not think that anything else would be coming, but then it became clear that it was and now we are to get another eight clauses on moral hazard and something else as well, although that might not come in time.

As the hon. Member for Eastbourne said, the Minister's announcement raises the important issue of the proper scrutiny of those new clauses; for example, the cash-equivalent transfers material was not available to the Committee. My worry is that Report will inevitably be dominated by one or two big issues and that, absurdly, a host of Government new clauses will be nodded through without any debate. That might not even be what the Government want. I wonder whether I can encourage the Minister to contact the usual channels and to ensure that the further debate on the new clauses—particularly if we do not get to discuss them in Committee—is sub-timetabled so that we have some guaranteed time to examine that new material. I do not think that we would be doing anybody a favour if we did not scrutinise it properly. Even the Government and those who have worked so hard on drafting those new clauses might feel slightly aggrieved if in the entire process of going through this House the clauses did not even get discussed because Report was dominated by one or two other, more political, issues. That would not be in the interests of good pensions law.

I hope that the Minister will use such influence as he has to ensure that material that we do not reach in the scope of this Committee is allocated defined time for our further scrutiny that cannot be eaten into. Having registered that concern I do not have any objection to the programme motion.

Malcolm Wicks (Labour, Croydon North)

I am grateful for the support of colleagues opposite. The forbearance of the hon. Member for Eastbourne is wearing thin, but there is still a sliver of it, and I am grateful for that.

We recognise that there is much work to do on Report, and I am sure that the usual channels will bear that in mind when it comes to deciding the time required and the ordering of that time; I note the suggestion of the hon. Member for Northavon on that. We will do our utmost to ensure that amendments and explanatory notes reach members of the Committee in as timely a fashion as possible.

On the points about the Prime Minister's comments yesterday, I remind the Committee that he said:

''We are examining what we can do in such special cases, and, in the context of the current debate on pension protection issues and legislation, I hope that we can come forward with the solution.''—[Official Report, 21 April 2004; Vol. 420, c. 293.]

The Prime Minister reconfirmed that we are taking the issue seriously and are giving it active consideration. At times, it has been uppermost in our minds in Committee, and I expect that hon. Members will wish to return to the subject later.

We are not pretending that the problem is easy to solve. Everyone has acknowledged the complexity of circumstances that have led to some people losing pension rights and facing a bleak future on retirement, despite having saved in their company pension scheme. We are currently working with trustees to gather data about schemes and establish the number of people who might be in that situation. Of course, we have been working on that issue for some time. We will need to work closely with partners across industry and in the unions on any possible way forward. We will come back to the House when we have a better view.

Meanwhile, I stress that, with the PPF, we are seeking to avoid the risk of an even bigger tragedy for individuals in future. We should certainly deliver protection for workers through the PPF, and we owe it to everyone to deliver good law. That is very much what we are about. My hope is the same as the Prime Minister's: that we will be able to come forward with a solution for those workers suffering the legacy of past failure. However, we are not yet there, and we do not want to promise a solution that it might be impossible to deliver.

Nigel Waterson (Conservative, Eastbourne)

I am reassured to hear that the Minister is on the same wavelength as the Prime Minister, given that the Cabinet was apparently not even consulted about the decision to hold an EU referendum. I am pleased to hear that he has the ear of the Prime Minister.

I would like to press the Minister slightly further. The Prime Minister, who presumably chooses his words carefully, said:

''in the context of the current debate on pension protection issues and legislation''.—[Official Report, 21 April 2004; Vol. 420, c. 293.]

Today, all the commentators are taking the line that he must have meant that the issue would come up on Report, although the Prime Minister did not use the word. Indeed, I would imagine that there would be a substantial Back-Bench rebellion if it was not tackled at that stage. I press the Minister on that, because it is germane to our debate, and to the usual channels' discussions later about how long will be required for Report.

Malcolm Wicks (Labour, Croydon North)

We have had the Prime Minister's statement, and I made my own short statement because of the interest that has been generated by what the Prime Minister said yesterday at Question Time. The hon. Member for Eastbourne may press me, but this Minister is not for pressing, on this occasion.

Huw Edwards (Labour, Monmouth)

I am sure that what my hon. Friend the Minister and my right hon. Friend the Prime Minister have said will reassure Committee members and my hon. Friend the Member for Cardiff, West (Kevin Brennan), who has campaigned seriously on behalf of the Allied Steel and Wire workers. One or two of my constituents were ASW workers, too, and they may be reassured by what the Minister said today. I hope that he is able to find the solution that the Prime Minister says is being sought.

Question put and agreed to.

Clause 231 - Modification of this Act in relation to hybrid or multi-employer schemes

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 560, in

clause 231, page 154, line 39, leave out 'and'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss the following:

Government amendments Nos. 561 and 562.

Government new clause 34—Consultation by employers: occupational pension schemes—

and the following amendment thereto: (a), in

line 21, at end insert—

'(5) A prescribed decision for these purposes is defined as one of the following:

(a) closing a scheme to future accruals;

(b) closing a scheme to new members;

(c) changing from a defined benefits to a defined contribution basis;

(d) significantly reducing or removing an employer contribution to a defined contribution scheme.

(6) The prescribed persons to be consulted hereunder will not include trade unions where an employer has established procedures for directly consulting employees in an alternative manner.'.

Government new clause 35—Consultation by employers: personal pension schemes.

Government new clause 36—Further provisions about regulations relating to consultation by employers—

and the following amendments thereto: (a), in

line 13, after 'ballots', insert 'where it is necessary for the purpose of selecting employee representatives.'.

(b), in

line 34, at end insert—

'(6) The discretion on an employer as to the persons who are to be consulted in subsection (2)(C) above shall be mandatory in cases where an employer has existing arrangements in place for direct consultation with employees.'.

Malcolm Wicks (Labour, Croydon North)

The best way to approach the group is to start with the meat of the three new clauses. New clauses 34, 35 and 36 would introduce the requirement for employers to consult affected active members of their pension schemes, or representatives of those members, before making a major change to future pension arrangements. Many employers already consult on pension changes as a matter of good employment practice. The CBI and other business groups have been keen to stress that point, and I entirely accept it. However, we must recognise, from the history of the past couple of years, that some employers do not consult. Together these clauses would ensure that, in future, employers would have a statutory obligation to consult on a proposed major change before the decision was made.

New clause 34 relates to occupational pension schemes. It would enable regulations to require employers who propose to make a prescribed decision in relation to their scheme, or who have been notified by their trustees or managers that they propose to make a prescribed decision, to consult in the ways set out in the regulations before that decision was made. The clause also makes provision for trustees or managers not to make certain decisions until they are satisfied that the employer has fulfilled the consultation requirement. That takes account of the varieties of scheme rules, which may give different powers to trustees and employers.

Opposition amendment (a) to new clause 34 seeks to place the detail of prescribed decisions on which consultation should take place under primary legislation, and to ensure that the prescribed persons to be consulted would not include trade unions where an employer has established procedures for directly consulting employees, but employees have not specifically chosen that. Rather than adopting that approach, we intend to use the power in the new clause to prescribe decisions to cover the relevant changes.

I will come to our choice of the secondary legislative vehicle rather than the primary one. However, Committee members will first be interested in the substance of the relevant changes. Those will include winding up the scheme or closing it to future accruals, closing a scheme to new members, changing from a defined benefit scheme to a defined contribution or hybrid scheme, and significantly reducing or removing an employer contribution to a defined contribution scheme.

Although that statement obviously does not spell out everything in the regulations in detail, the types of change to pension schemes that I have just mentioned cover all the main issues that we would expect to see in the regulations. I hope that Opposition members of the Committee will accept that assurance.

I turn now to why we believe that there are good reasons why it would be more appropriate for the changes to be in regulation rather than in the Bill. We have opted to set out the detail of the consultation requirement in regulation so that we can ensure that the approach fits well with the forthcoming regulations on information and consultation, and so that there is scope to adjust the regulations as pension schemes develop and innovate over time.

To give an example, changes involving hybrid schemes are relatively recent. There are, no doubt, other ways in which pension schemes will evolve in years to come. We intend to use the power to prescribe who should be consulted to require employers to consult recognised trade unions or to consult via approved information and consultation arrangements that have been agreed by the employees. That is in line with our original commitment in the Green Paper to implement the requirement to consult on pensions alongside consideration of the implementation of the information and consultation directive.

Steve Webb (Liberal Democrat, Northavon)

I confess my almost total ignorance of these matters. Will the Minister clarify the current position: what current obligations are we changing? Will he clarify how what he is saying now relates to section 67 of the Pensions Act 1995, or does that involve a completely different set of issues?

Malcolm Wicks (Labour, Croydon North)

Will the hon. Gentleman allow me to come back with an answer to that question later? As I mentioned earlier, recent years have shown that some employers, sadly, have initiated major changes to pension schemes without consultation. That shows that, whatever the existing arrangements may be, a great deal of progress needs to be made—hence the new clauses.

Compliance with the requirement to consult will be enforced by the pensions regulator, which will be able to impose civil penalties on employers or trustees who are in breach of their obligations under the regulations, as set out in section 10 of the 1995 Act. New clause 35 provides for regulations to require employers who offer group personal pension arrangements with a direct payment facility to consult when they propose to make certain critical decisions in relation to employees who are members of the scheme.

New clause 36 enables regulations to include further provision relating to the obligation to consult required under new clauses 34 and 35. It allows for regulations to set out the information that must be provided to those being consulted, and the time periods that must be allowed for consultation.

Opposition amendment (a) to new clause 36 is intended to clarify the purpose of subsection (2)(e), which refers to holding ballots, by making it clear that the ballots referred to are simply for the purpose of electing employee representatives. I can confirm that this subsection refers to circumstances in which employees opt to elect representatives who would be authorised to receive information on their behalf about changes to future pension arrangements, and

to be consulted about them. It does not relate to a ballot to enable affected members to vote on the outcome of any consultation. The Opposition amendment is therefore unnecessary.

Opposition amendment (b) to new clause 36 is intended add a new subsection at the end of the clause to ensure that the discretion placed on an employer to determine who should be consulted is in fact made mandatory when the employer has existing arrangements in place for direct consultation with employees. Subsection (2) allows employers to have some flexibility about whom they consult in certain cases. However, where there are recognised trade unions or appropriate information and consultation arrangements, which have been approved by employees, employers must use those existing structures. There is a strong expectation that where unions are recognised they will be closely involved both in drawing up information and consultation agreements, and in being consulted under them. Where employees have specifically chosen to be consulted directly on major changes to pension schemes, or where there are no existing representative structures, direct consultation will be allowed. That is in line with the approach taken in implementing the information and consultation directive. To ensure continuity of approach and to minimise complexity, it is important that the approach to implementing the directive and to these proposals is similar. For that reason we do not accept the Opposition amendment, which could effectively allow employers to opt out of the consultation process if they consulted directly with employees, even if the arrangements were not specifically approved by employees. However, we do intend to set out in the regulations that, if there are no representatives who may be consulted on pensions, or if the employees have already agreed to direct consultation in relation to pensions changes, the employers may consult employees directly.

New clause 36 gives a power to

''amend, apply . . . or make provision similar to''

parts of the Employment Rights Act 1996, the Employment Tribunals Act 1996 and the Trade Union and Labour Relations (Consolidation) Act 1992. That will ensure that trade union representatives, information and consultation representatives, and any other employee representatives who are involved in consultation on major pension changes, are entitled to an appropriate level of employment protection so that they can carry out their duties as representatives. It will protect representatives from suffering any detriment and from unfair dismissal, as well as ensuring that they are given adequate time and remuneration to carry out their consultation duties. The protection mirrors that already provided to employee representatives by reason of the Employment Rights Act 1996, and the protection that is proposed for information and consultation representatives.

Subsections (3) and (4) will assist the pensions regulator in policing compliance with the requirement to consult, and in investigating complaints relating to breaches of the regulations, by putting the onus on employers to provide the pensions regulator with

information about the action that they have taken in order to comply with the regulations, if required.

Subsection (5) puts it beyond doubt that where employers have other duties to consult on pension changes arising elsewhere they are unaffected by the new consultation provisions. For example, an employer may already have arrangements in place and we would not wish to undermine them.

Government amendments Nos. 560, 561 and 562 are technical consequentials related to the new clauses.

We have been in discussion with the CBI, the Trades Union Congress and other stakeholders and will continue to discuss how best to implement the requirement to consult within the enabling clauses. Therefore, and in light of the assurances that I can give about the type of pension scheme changes to be covered by regulation, the nature of the proposed ballots and the opportunity for employers to consult employees directly when there are no recognised trade unions or other representative structures, I hope that Opposition Members will withdraw their amendments. I might have the opportunity later in the debate to answer the hon. Member for Northavon when I have thought through his questions more carefully. I apologise for my speech being so long, but I did not have time to write a shorter one.

Nigel Waterson (Conservative, Eastbourne)

I am grateful for the Minister's comments, although he must not confuse a long speech with an informative speech. I accept that the Government's amendments are technical and minor and we have no particular problems with them. Indeed, our amendments to the new clauses are probing amendments. Without wishing in any sense to spoil the warm atmosphere that has developed in Committee this morning, I must say that there is no excuse for the new clauses to appear at this late stage in our proceedings. They have been flagged up for a long time to employers' organisations and others, so they are far from being an afterthought.

Organisations, such as the CBI and the Engineering Employers Federation, have been expressing their concerns to me about when the new clauses would be tabled and in what form. I can tell the Minister that employers' organisations, especially the CBI and the EEF, feel significant irritation about the lateness of the proposals. Their timing does not allow for significant consultation about their terms. The Minister said that consultation would take place later, but surely it is traditional and more sensible, given that employers' organisations have legitimate strong and developed views, that consultation should occur before the provisions are drafted, not afterwards.

Furthermore, there is no excuse for the dilatory way in which the provisions have been handled. The new clauses are not highly complex or legalistic. As I conceded in our short debate on the programme motion, the stuff on moral hazard and anti-avoidance is highly technical and, as the Secretary of State flagged up, involved some high-powered legal brains to obtain clarity. Even now, such measures may not be right, but the consultation matters are fairly standard stuff and, for the life of me, I cannot understand why they have appeared at such a late stage. Such action

risks legislation on the hoof and the alienation of responsible employers' organisations.

The Minister touched on responsible employers in his remarks. We tabled our amendments in a great hurry—the best that we could do in the circumstances. I make no apology for that, but I am speaking on behalf of those responsible employers' organisations, which already take seriously the need to consult their employees on such issues.

I appreciate, of course, that the Government have a separate agenda about giving trade unions more powers to interfere. One of the legacies of the Thatcher years is that we now often have responsible trade unions with a clear understanding of how business and capitalism work and the need for a profit motive and sensible approaches to workplace issues, whether pensions or other matters. Some other trade unions have not quite got with the programme and take a different view, so I hope that the thrust of the Government's policy behind the new clauses is not to produce a Trojan horse for companies that already have a harmonious relationship with their employees, especially when consulting on changes to the pension schemes.

It is particularly unhelpful that, as with other aspects of the Bill, industry must wait for detailed regulations that will be dealt with later, on a sleepy afternoon in a Committee Room quietly out of the public gaze. However, it is clear from the Bill that there will be stringent civil penalties for people who do not comply with whatever will be set out in the way of obligations. The Government's attitude to my amendment (b) is particularly worrying—

Steve Webb (Liberal Democrat, Northavon)

That is something that I was looking for when the hon. Gentleman mentioned stringent civil penalties for those who fail to comply with the provision. Can he tell me where that is stated?

Nigel Waterson (Conservative, Eastbourne)

I see; the hon. Gentleman wants me to read the Bill for him. One of my officials, or his officials, will come back to me with a note. It is in there somewhere, because I saw it early this morning.

Steve Webb (Liberal Democrat, Northavon)

On this issue?

Nigel Waterson (Conservative, Eastbourne)

I promise the hon. Gentleman that I did, but at the moment I cannot find it. There is a certain amount of scurrying in the Government's dugout.

Malcolm Wicks (Labour, Croydon North)

It was in my speech.

Nigel Waterson (Conservative, Eastbourne)

I thought that it was. I am afraid that the Minister has a problem, because his comments may not always attract the close interest that they deserve and perhaps they read better in Hansard. I have a feeling that the Minister did touch on the matter, but I am not paid to answer such questions and the Minister is, so perhaps he will take the opportunity to do so.

I was gobsmacked that, at the time, the Minister could not deal with the legitimate query by the hon. Member for Northavon, which I had also flagged up to raise, about the relationship between these new clauses and section 67 of the Pensions Act 1995; we

shall discuss that later. One set of proposals imposes potentially onerous obligations on employers to consult the work force about changes to pension schemes, but in a different part of the same Bill there is a raft of provisions that were designed—they do not succeed—to make it easier for employers to change the terms of the pension scheme rather than shut it down, which is the easy and practical option for many companies at the moment. I cannot believe that the Minister could not, at least off the top of his head, deal with that query. There must be some interconnection.

On the face of it, these are two elaborate sets of proposals, carefully honed, presumably by different parliamentary draftsmen, and produced, coincidentally, at around the same time in the life of the Bill, but in many respects they are totally contradictory, with totally different aims. It is as if two separate gangs in the Department for Work and Pensions or the parliamentary draftsman's office were given totally different briefs and have come up with clever proposals—

Malcolm Wicks indicated dissent.

Nigel Waterson (Conservative, Eastbourne)

The Minister is shaking his head furiously and I shall stop speaking about this issue because I do not want him to do himself an injury. It reminds me of a scene from ''The Exorcist''.

Malcolm Wicks (Labour, Croydon North)

Yes; watch out.

Nigel Waterson (Conservative, Eastbourne)

When the green slime starts to appear, I shall sit down.

If the Minister has not already applied his mind to the point, which seems to have occurred naturally to both me, as the shadow Minister, and the Liberal Democrat spokesman without the massive support that the Minister has. There is a major contradiction and if he cannot deal with it straight away, I hope that he will do so at length and I reserve the right to return to the matter later.

Malcolm Wicks (Labour, Croydon North)

It is obviously a difficult point for the hon. Gentleman to grasp and I may say a little more about it later, but section 67 is about past rights and has no actuarial impact on individuals. We shall discuss that at the appropriate time. We are discussing changes to future pension rights and decent consultation is proper practice. In a moment, the hon. Gentleman may say whether he thinks that it is proper to consult workers about their pension rights. He has not yet come clean on his view about that.

Nigel Waterson (Conservative, Eastbourne)

I have. Just as the hon. Member for Northavon was not listening to the Minister, the Minister clearly was not listening to me. We should all have those great glass screens erected around us as we have in the Chamber.

Malcolm Wicks (Labour, Croydon North)

It could be a pilot study.

Nigel Waterson (Conservative, Eastbourne)

It could. I am delighted to have the Minister's assurance, orally, that the two groups of new clauses approach two different sorts of rights. Although the boffin from the Liberal Democrats will, I am sure, correct me, I do not think that that is clear in the legislation as it stands. We can return to that in more detail.

As for not listening, the Minister clearly was not listening to me. I am afraid that this debate is going to be a long one because it brings together the new clauses and our amendments to them. With your indulgence, Mr. Griffiths, I will touch on a couple of points. They would arise on stand part, but I think that we can obviate the need for a separate debate if you are reasonably liberal with me.

I have made it clear that we believe that the best employers do consult their employees and that employers should be encouraged or required to do so. What we—and the employers' organisations—are concerned about is a Government agenda to try to give trade unions pre-emptive rights to interfere in those matters where they are not wanted. In many companies there will be a relationship that works between the trade union and the employer. That is what we are trying to get at and that is what is behind the amendments.

The amendments are all probing and are inspired by the employers' organisations. My first point arises from a briefing note. It says:

''Certain employers are to be exempted from this requirement, for example public service pension schemes, which already have statutory consultation arrangements, or employers with less than a specified number of employees.''

I hope that the Minister will be able to answer a couple of practical questions. First, does he have a feel for the number of employees that will be the cut-off? Secondly, why should the public service pension schemes be treated in that way, and not the private sector schemes, just because they happen to have statutory consultation arrangements that may not work well? The thrust of our amendments is that if it can be shown that there is a sensible and fair procedure in place in any given company—involving the trade unions or not—they should be exempted from the requirements.

Yesterday the Engineering Employers Federation had a meeting of its employment policy committee. Much concern was expressed about the new clauses. The EEF says that

''if there was an excessive requirement placed upon employers, this would be yet one further reason why employers would think seriously about whether they should continue maintaining pension provision for their employees.''

It also says:

''There was a universal view . . . that the Government should set a fixed period of time for consultation on pension changes (along the lines of the fixed periods for consulting on collective redundancies)''.

That is something that we touch on in at least one of our amendments.

The EEF makes the point that many of its

''companies already consult before making changes to their occupational pension scheme.''

It wants to see provisions that allow flexibility for

''companies to retain existing consultation arrangements that best suit them and their employees.''

That is the position of the official Opposition. It certainly does not think, and nor does the CBI, that there should be an automatic requirement for employers to consult trade unions in particular companies.

As we are dealing with the shadowy issue of what will be in the regulations, it would be helpful if the Minister would state clearly whether the regulations will include a requirement for trade unions to be involved willy-nilly, even if there is no existing penetration of trade union membership in a particular company. The EEF makes the point that the new clauses

''provide very little detailed information about the Government's thinking'',

particularly on prescribed persons.

I have already raised the issue of the timetable, but the EEF wanted us to probe Ministers on other specific matters as well. I do not know why I am doing this; I should have thought that it was a job for officials and the organisations themselves, but clearly that stage was left out in the preparation of the new clauses. The EEF wants to know whether employers will have a choice on the type of consultation mechanism they use and, if so, whether the Government have a view on which mechanisms might be appropriate. It asks what type of changes to occupational pension schemes employers will be required to consult on, bearing in mind that the Government have talked in the past about substantial changes; I believe that the Minister touched on that. The CBI repeats the point about the fixed period of consultation and asks about penalties if employers fail to comply with the new consultation arrangements.

To return to the point raised by the hon. Member for Northavon, I am sure that somewhere in the Bill are provisions for penalties.

Steve Webb (Liberal Democrat, Northavon)

Perhaps I can help.

Nigel Waterson (Conservative, Eastbourne)

If the hon. Gentleman has found the clause, I should be delighted to give way.

Steve Webb (Liberal Democrat, Northavon)

I must admit to a certain amount of inspiration. Clause 237 covers penalties, and the explanatory notes on the new clauses suggest that that clause would apply to them as well.

Nigel Waterson (Conservative, Eastbourne)

Thank God for that. It would have really ruined my day if we had not been able to pin that down. I was sure that I had seen a reference somewhere in the forest of explanatory notes, late amendments, briefings and other ''stuff''.

We are not talking about an exhortation to be good employers but about specific provisions that involve significant civil penalties. We were not even privy to most of them, because they have not been produced in draft regulations. I am amazed that the Government seem to have made so little effort to carry the employers' organisations with them. If I were them, I would have found that extremely worrying.

The concerns of the CBI very much parallel those of the EEF. It states:

''A key concern to emerge since the publication of the Bill . . . is the lack of clarity in new Government clauses to provide information and consultation rights.''

It says that the vast majority of companies in its membership already consult and that it does not want to end up with a ''one size fits all'' approach. It refers to the ''great uncertainty'' of all these matters being left for subsequent regulations. It does not want trade

unions automatically to be given preferential or special treatment. I hope that that is not what is behind the provisions, because it has become clear in the past 20, 30 or 40 years that trade unions are not the only answer to achieving fairness in the workplace, that sometimes they actually work in an opposite direction, and that there are other ways that decent, responsible employers can ensure that their employees are consulted and treated fairly. The falling number of trade union members during my political lifetime is one measure of that development.

The CBI thinks that employers

''should have the ability to protect consultation arrangements that are already in place and have the support of employees''.

That is as high as I shall put my case. If it can be clearly demonstrated that arrangements are working and have been in place satisfactorily for some time, they should not be changed. The CBI also discusses the need for direct consultation.

Amendment (a) to new clause 34 is designed to set out the prescribed decisions. We can all get into the traditional argument about what should be in the Bill and what should be in the regulations. The amendments are intended to draw out the Minister and are based on previous pronouncements by the Department about which decisions would be covered. It would be interesting to know in principle whether the Minister would add to or subtract from the list and whether the Committee can send a message to employers that certain issues and not others will be included.

Proposed subsection (6) of amendment (a) states:

''The prescribed persons . . . will not include trade unions where an employer has established procedures for directly consulting employees in an alternative manner.''

If the Government's sole motive is to ensure that there are proper, transparent consultation arrangements for pension matters in every company, they cannot possibly object to that subsection of our amendment. If their real motive is to give a boost to trade unions that might otherwise not have become involved in arrangements with particular companies, however, that would inform a view—

Vera Baird (Labour, Redcar)

The amendments seem to be an attempt to oust trade unions from the consultation, even where they are already present. Is that not right? The hon. Gentleman seeks to add a subsection to the end of new clause 36 to ensure that the discretion to determine who should be consulted is mandatory, where arrangements already exist.

New clause 36(2) already allows for flexibility, however. Where there are recognised trade unions, there is of course a strong presumption that employers must use the existing structures. Is the hon. Gentleman seeking to oust that as a presumption, too, and introduce a Trojan horse of his own, so that even recognised trade unions should be ousted from a workplace to allow flexibility and direct consultation with an employer? That could not help future employment relations.

Nigel Waterson (Conservative, Eastbourne)

I want to limit the number of Trojan horses involved, or we could get into all sorts of difficulties. The hon. and learned Lady misreads my intention. I would expect that, in a well-run company with existing and well recognised consultation arrangements and a recognised trade union, unions would already be involved in those arrangements. I cannot see any problem with that.

Equally, however, in this post-Thatcher era it is perfectly possible to envisage large, well run companies that have excellent consultation arrangements in place but no trade union recognition and limited, if any, trade union membership within the work force. I am trying to draw the line there, so there is no Trojan horse on the Conservative Benches.

Vera Baird (Labour, Redcar)

Does the hon. Gentleman not accept the need for flexibility, however? Although shops can be unionised or not unionised, companies can merge or not merge, and departments can change to become parts of other departments, there are times when a previously non-unionised shop becomes partly or wholly unionised. Surely the Government's position, which allows for complete flexibility, is the best way forward. The hon. Gentleman's amendment is truly an attempt to oust the influence of trade unions, in a characteristically Tory fashion.

Nigel Waterson (Conservative, Eastbourne)

Again, I am not guilty. I do not know where the hon. and learned Lady gets the notion of flexibility, unless she has had sight of draft regulations, which no one else has. We do not know what the flexibility or lack of it will be, and the CBI and the EEF have a suspicion, based in part on the clear lack of consultation, that the Government want to give the trade unions a special position in those matters, which they do not deserve. I am sure that the hon. and learned Lady would not agree with that.

I was too lazy to draft the same amendments to new clause 35, but the Committee should take it as read that I would have put down more or less exactly the same wording had I been able to rev up my word processor, and the necessary enthusiasm. The Minister tells me that amendment (a) to new clause 36(2) is unnecessary. I was always willing to accept that from his lips, but the amendment is based on another CBI concern. The CBI says that it is unclear whether new clause 36(2)(e) refers to choosing

''representatives should a company go down this route or whether it refers to balloting affected parties with respect to the key change being consulted upon.''

It says that it

''would be extremely concerned if it is the latter and if it is the former then this should be spelt out more clearly in primary legislation.''

The Minister may argue that my amendment is unnecessary, but I hope that he sees the wisdom in spelling it out in primary legislation, because it clearly concerns the CBI.

Amendment (b) to new clause 36 would make it clear that where proper arrangements for direct consultation are already in place—which I believe is the case in many companies, and especially large ones—they should be left as they are. Our motto on such matters is: if it ain't broke, why fix it?

May I, with your indulgence, Mr. Griffiths, discuss an issue that has been raised with me by various people about clause 231 in its entirety, and particularly about subsections (1) and (3)? There is a general issue with hybrid schemes, and we may wish to return to it on Report. As the Minister knows, my view is that the entire Bill is an elaborate funeral oration for defined benefit schemes; we are not going to get any new ones as a result of this legislation, and neither will any that would otherwise have closed be saved.

The future is—not orange, but defined contribution schemes rather than defined benefit schemes, or hybrid schemes, which are becoming extremely popular. I do not profess to have the technical learning to know exactly how they work, but they seem somehow to combine DB and DC in one scheme, which is why they are called hybrid schemes. The people who administer, market and produce them are getting worried about the effects of the legislation as a whole on hybrid schemes. One of the issues that the Minister has flagged up for Government amendments on Report is the effect of the legislation on DC schemes; we discussed that some time ago. Hybrid schemes are a new development, but we have to keep up with the times. Can the Minister say whether they too will be dealt with in that regard, because there is concern? We might have to return to this in more detail on another occasion.

Steve Webb (Liberal Democrat, Northavon)

The hon. Gentleman has covered a number of the issues that need to be raised. One of the merits of the time that we spend in Committee is that it gives Ministers the opportunity to put on the record what that they think is likely to appear in regulations. The Minister has described a few of those things. The hon. Member for Eastbourne has read out what the EEF wants to know about the regulations, and I am interested in the answer to those questions as well.

The Liberal Democrats support the principle that people have a right to be consulted about significant changes to their pension arrangements. Pensions are increasingly understood to be deferred pay, and just as people would not expect their pay to be altered in a unilateral manner, they should not expect their pension rights to be altered unilaterally. We support the principle behind the new clauses.

The Minister intervened on the hon. Member for Eastbourne to try to tease out the relationship between the new clauses and section 67. I understood him to be saying that section 67—and the replacement for it in the new clauses that we will address later—is about changes to rights that have already accrued, whereas these new clauses are about consultation on changes to the scheme going forward; they are about rights that have yet to accrue.

However, I wonder whether the distinction is as clear as the Minister seemed to be implying. As the hon. Member for Eastbourne said, there is a bit of a paradox here; we are slightly watering down the rights of members with regard to changes to the rights that they have already accrued, but we are also beefing up the requirement to consult on changes that have yet to take place. Can the Minister confirm that these new clauses do not relate to any changes that might be made to rights that have already accrued—that they

are entirely about changes in rights going forward? It is my understanding that that is the case.

One of the dilemmas about consultation is: when is it meaningful? All Members know what sometimes happens when public bodies make decisions. For example, a decision might be made to close a post office, and after that a consultation takes place; everybody always knew what the answer would be, because the decision had already been made. The consultation is a sham, and, frankly, a waste of everybody's time. In such cases the right to be consulted is not worth the paper it was written on.

I am still slightly unclear about the new rights to be consulted. Are they veto rights? There is a reference in one of the new clauses to ballots. If there were a ballot of the affected members and they said no to the change, would that be binding? Would it be indicative? Regulations might require ballots, but would they require binding ballots? People who run schemes—who do not have to run them in the first place—may be obliged to consult members on major changes, but are they obliged to do anything once they have heard the results of the consultation? I am not clear about that fundamental question in the light of our discussion. I hope that the Minister can clarify that for me.

I have a couple of other observations. Most requirements under this part of the Bill are left to regulation, and we have already heard that employers' organisations have a lot of concerns. We know that the way in which such matters are handled in the House means that those regulations are unamendable. Even if we understood them, we could not change them. We have to say either yes or no. Will the Minister assure us that in preparing those regulations he will consult employers' organisations—and the relevant trade unions as well—so that the kind of amendments that we might table in Committee are reflected in the regulations, which will be presented to the House in a take-it-or-leave-it fashion? That would offer some reassurance to the employers' organisations.

I have to part company with the employers' organisations on their comments about trade unions. I cannot see why the regulations might not—at least in certain circumstances—require consultation with the relevant trade unions. I do not see why one would want to remove that requirement at all. They would be the obvious people to consult, and in certain circumstances a requirement to do so would seem right and proper.

Overall, on behalf of my party, I welcome the fact that pensions will increasingly be seen as integral to the remuneration package. That is probably the world into which we are moving. In a world where good pension schemes are something sought after, having the right to consultation when they are changed must be enshrined in legislation. The principle of the proposals is right, but my critical question is whether these rights entitle people to be told what is going on—although they are clearly more than that: they are the right to express an opinion on what is going on. Do they, however, give the right to veto something if the vast majority of members do not want it?

Nigel Waterson (Conservative, Eastbourne)

I am following what the hon. Gentleman is saying closely. Would thresholds—such as a two-thirds majority—or other such provisions be required? There might be a small vociferous group opposed to a change and a majority in favour. Of course, the people being consulted will have different interests. Some will have already retired, some will still be working, some will be nearing retirement, and each group may legitimately have a totally different take on any proposals.

Steve Webb (Liberal Democrat, Northavon)

The hon. Gentleman is right. We need to be much clearer about the way in which the views expressed will transform into decision making. He also raises the interesting question of who will be consulted. Will it be all the scheme members—the retired, the active and the deferred? Presumably it must be, but in other discussions, we have found that retired members have had little right to consultation. To the extent that we are discussing newly accrued rights, we may not be talking about retired members at all. I sense that we probably are not.

The situation is a bit grey and unclear. What rights are people actually getting? Are they rights to say what one thinks and then be ignored? Given that it is the employer who decides whether to run a scheme, how far are we giving the members of the scheme rights to change it or to refuse changes? Will such changes simply be nodded in the direction of the employer, only for the scheme to carry on pretty much as it would have done? How much meat is there in those rights? That is the key question.

John Robertson (Labour, Glasgow Anniesland)

I have a few questions and comments to make about the Government new clauses. Consultation by employers is important, and it is right that that should happen, but we also have to ensure that employees' views are taken into consideration. They must have a real say on any changes that might happen to their pension.

What does ''consultation'' mean? As a trade unionist, to me, it usually meant that the employer said, ''I've told you so. That's it. I've consulted you.'' Sadly, that is so. I would like the Minister to give me a definition of the real meaning of consultation. Does it just mean that because the employer or the fund has said something, that is counted as a consultation, or is it a two-way dialogue? Consultation, like communication, is a two-way process. Part of it is speaking and part is listening. The meaning of the word ''consultation'' does not come out in the Bill.

The comment by the hon. Member for Northavon about the consultations that took place about the post offices was reasonable, although it was not entirely accurate: I have saved one of my local post offices—[Hon. Members: ''Hear, hear!'']—with the help of the local community, of course. Consultation has worked in the past—although not very often. I accept the hon. Gentleman's underlying concerns.

The Government should be congratulated on being willing to speak to the CBI and the trade unions, even at this late date. I do not regard this as the sort of thing that the hon. Member for Eastbourne described—a willy-nilly consultation. I hope that in answer to my

request for an explanation and description of the word ''consultation'', we do not receive a willy-nilly description, and that we can include in the Bill something that everybody will understand in future.

The Minister mentioned the assurances about the type of pension scheme changes to be covered by regulation. He also spoke about the nature of ballots, and the opportunity for employees and employers to be recognised, and the trade unions, and the trade union representative. What recourse will employees have if they feel that they have not been consulted properly? To whom do they say, ''I have not been consulted'', or, ''I do not think that the consultation that I received was correct and would meet the obligations imposed by the meaning of the word 'consultation' ''?

The hon. Member for Eastbourne made a churlish attack on the Government for talking to people. If the Government stopped talking to people, then they would be open to the complaints that he made. Even until the last minute before the Bill gets the stamp of approval, I would expect the Minister and his Department to be talking to people at all times. For the hon. Gentleman to have a go at the Minister for doing that at a late stage in a Bill is unfair, to say the least.

The hon. Gentleman also talked about the responsibilities of employers. He was right to say that there are good employers. However, there are also bad employers. Although I understand where he is coming from and the kind of people whom he is trying to represent, he would do his argument a lot more good if he remembered that there are a great many bad employers that must be considered, and the employees of these companies should be protected. Had the hon. Gentleman remembered that during his contribution it would have been more even-handed, and I could probably have agreed with some of it. When people put only one side of an argument, they should not expect those who have leanings towards the other side to see what they are saying. Fortunately I am more even-handed, and I know that there are good employers who consult their employees, as well as bad employers.

I had some sympathy for the hon. Gentleman's point about treating private and public pensions the same. It is important that no matter what kind of pension people have, they are treated the same as everybody else, because at the end of the day, they suffer the same as everybody else. Any person who has been contributing to a pension, possibly for a number of years, will suffer just as much as anybody else. The fact that one pension is slightly different from another pension should not mean that one member of the public is treated differently from another.

I shall finish by referring again to consultation. The new clauses, and the Bill, are good, but sometimes we need a defining moment, and a defining word: I want a definition of the word consultation. I want to know what people really mean by consulting. If the Minister tells me that, he will have my full support.

Vera Baird (Labour, Redcar)

I congratulate and compliment the Government on tabling the new clauses. Although they come late in the day, I am not sure that that is a justifiable criticism, because to a fairly detached observer of industrial relations, they seem well balanced. The criticism that the Government have not carried the CBI with them is not justified. It is clear that consultation has been carried out. Even the CBI points that were raised by the Opposition would be appropriate to be negotiated within the ambit of the statutory instruments that are to follow, which will regulate the arrangements in detail.

It seems eminently suitable for issues of detail to be delegated to statutory instruments so that they can be flexible and can, if necessary, change more readily as needs change. This is the advent of the issue of information and consultation, and these steps must be something of a pilot. It is important that they are flexible, by being made through statutory instruments, which will give them that extra characteristic. Now that the framework is reasonably clearly set out, it is entirely appropriate to devolve the rest to statutory instruments. The sooner those statutory instruments can be produced, the better industry and the unions will be able to consult, and the smoother the transition will be to understanding in full how the Bill will work.

I am concerned that the Tories, through amendment (b), seek an opt-out where there is a recognised trade union shop. They are trying to slip into this legislation the flexibility to do that, while appearing to champion employees' rights. I cannot think of a worse way of affecting industrial relations than sanctioning, at the very least, the distancing of recognised trade unions, which should be the preferred mechanism for consultation where they exist or may come into being. I remind the Opposition that consultation of separate individuals is capable, at worst, of being an opportunity to divide and rule, and at best of creating a position in which individuals will not have to hand the expertise, the resources and the pensions advice that is available from a trade union. Those people will be less able to follow the consultation process, marshal resources and have a clear view to put forward. Without the backing of trade union expertise, they are likely to be less able to make a contribution that suits their interests. Trade unions are keen to be kept at the forefront, and I congratulate the Government on the new clauses that do exactly that.

Malcolm Wicks (Labour, Croydon North)

This has been a useful debate and I thank everyone for their contributions. I particularly welcome my hon. and learned Friend's support for the balanced approach that we are trying to present, whereby we can deal with the detail in regulation.

The hon. Member for Eastbourne seems to be in a grumpy mood this morning. We are in favour of a consultative, rather than an insultative, approach. It is not for me to defend the hon. Member for Northavon, and I am happy to criticise him when I think it appropriate. However, it is a peculiarly English disease—I know that you, coming from your great nation, do not suffer from this, Mr. Griffiths—to attack people for being intelligent. We use words such as ''boffin'' and we accuse people of having two brains,

and perhaps we have been guilty of that—[Interruption.] I am sure that my PPS, my hon. Friend the Member for Greenock and Inverclyde (David Cairns), has. Most other European countries would have some respect for intellect. I always think that people who use terms like ''boffin'' may be guilty of having no brain at all. We must be careful. It was nice to see the hon. Member for Northavon acting as a kind of unpaid research assistant for the hon. Member for Eastbourne, who had not quite, on this occasion at least, marshalled all the evidence that he required.

I will not take everything in a logical order, because of the flurry of questions—[Interruption.] The hon. Member for Eastbourne must be in an insultative mood again. He really must cheer up. We are engaged in a great piece of business to put on the statute book an important piece of legislation. One day, his grandchildren will look back and be proud of his intellectual approach in helping us with these deliberations.

My hon. Friend the Member for Glasgow, Anniesland (John Robertson) asked what we mean by the word ''consultation''. The hon. Member for Northavon spoke on the same theme. I may have to disappoint them by saying that the requirement to consult is not necessarily a requirement to reach agreement. If there is a disagreement between the employer and the employees, we are not saying that we have, somehow, to force an agreement; otherwise, we would be moving towards compulsion in schemes.

John Robertson rose—

Malcolm Wicks (Labour, Croydon North)

Before I give way to my hon. Friend, I should say that although there is a valid debate about compulsion, as opposed to a voluntary approach, there is a Pensions Commission to consider those issues. The Bill is not about that.

John Robertson rose—

Malcolm Wicks (Labour, Croydon North)

I shall go one step further before giving way to my hon. Friend. Consultation involves taking account of views and explaining how they have been taken account of, but it is not about compelling the employer to abide by them.

John Robertson (Labour, Glasgow Anniesland)

I was not insinuating that there should be an agreement. However, the Minister used the word ''discussion'', which always means to me a two-way process—with me talking to someone and them talking to me, although I might not agree with them, which is fair enough. I am concerned that bad employers will conduct a one-way conversation, and that the people who receive the conversation do not get the opportunity to conduct a discussion.

Malcolm Wicks (Labour, Croydon North)

I understand that, which is why we are creating powers, through the regulator, to ensure that proper consultation has taken place. The nature of the discussion involved is important, and we should consider it when consulting further and drawing up the regulations. In better companies—if I can put it that way—pensions issues are on the table through collective bargaining. In that sense, after a consultation there would be a chance for that bargaining process to take place. However, I concede that that is not always so.

The Government look forward to a time when more widespread partner engagement on pensions would make it a suitable topic for the statutory collective bargaining procedure. However, most voluntary arrangements still do not include pensions. It would not be appropriate for the statutory procedure to move so far ahead of current practice in voluntary arrangements. The Employment Relations Bill contains an order-making power to add pensions to the three core topics. The Secretary of State for Trade and Industry can thereby exercise that power when there is evidence that typical practice in voluntary recognition agreements is for pensions to be included as a bargaining topic. I hope that that encourages my hon. Friend.

Steve Webb (Liberal Democrat, Northavon)

May I paraphrase what the Minister has just said? I am endeavouring to listen, and I think that he said that it was not yet normal to include pensions in collective bargaining—and that the Government are not going to legislate to make it part of the statutory collective bargaining framework because not enough people do it yet. However, surely the argument should be about whether it is right, rather than whether people do it yet.

Malcolm Wicks (Labour, Croydon North)

As I said, the Secretary of State for Trade and Industry has that power, which can be brought into being at an appropriate time. The hon. Gentleman makes a perfectly proper point—that would be an interesting debate, and in a way, we are having it now. It relates to the issue of compulsion. The Government position is clear: we would prefer a voluntary approach to those arrangements, in terms of bargaining and the provision of occupational pensions. We would like that voluntary approach to work.

The employer task force is helping us with that, to encourage the development of good practice among employers, and the Pensions Commission is keeping a watchful eye on the success of the voluntary approach. The door is still open to compulsion, but that is not the Government position at the present time. We would prefer a voluntary approach to work. The alternative position is perfectly respectable, and a great debate about this issue is taking place.

Steve Webb (Liberal Democrat, Northavon)

Is there not a paradox here? The employers' organisations say in response to this group of new clauses: ''There are lots of good firms out there; leave us alone.'' The Minister's response is, ''Well, I do not care. Some are not good, and we have to legislate.'' There is an inconsistency in the approach to the two issues. There is a voluntary approach to the issue of collective bargaining rights over pensions, but a mandatory approach to consultation. That seems an odd inconsistency.

Malcolm Wicks (Labour, Croydon North)

I do not think so. We say that to consult is proper practice and decent behaviour in the workplace. We wish that it could happen voluntarily, but it has not: there have been some bad cases in recent years. We are therefore going to make it a statutory obligation. That is perfectly appropriate. To say that occupational pensions should be compulsory would

represent further moves along the continuum. That is a different order of issue.

Compliance with the requirement to consult would be enforced by the pensions regulator, which would be able to impose civil penalties, as set out in section 10 of the Pensions Act 1995, on employers or trustees who are in breach of their obligations under the regulations.

I welcome the broad support, on behalf of his party, of the hon. Member for Northavon, although he asks some probing questions. Will we consult on regulations? Yes, we have been consulting the—I had better not say the usual suspects—the usual stakeholder groups already. The consultation would only affect active members of schemes, not deferred members or pensioners, because any changes would only affect future accruals, which are only relevant to active members.

I turn to some of the issues raised by the hon. Member for Eastbourne. ''Why so late?'' he asked. As well as doing its other important and urgent work, the Department has already been consulting with the TUC, CBI and others about how the legislation should work and how the primary and secondary routes should be developed together. This consultation has already cleared some essential issues and hurdles.

The issue of where fines should be dealt with arose during debates between those on the Opposition Benches. Perhaps I can help by saying that the breach of regulations is dealt with in clause 237, which we shall probably debate later today. Penalties would go up to £5,000 for individuals, and up to £50,000 for other cases.

Earlier, when I was making my initial, rather long, speech, I was asked about current obligations. I gave an off-the-cuff answer; the more considered one is not dissimilar, which is a happy circumstance. Consultation at the moment only exists in certain schemes; there is no legislative requirement to consult generally—hence our proposals. Again, I have more or less dealt with the issue about section 67—we shall be discussing it later. That is about an attempt to rationalise past accruals, not least to simplify schemes for employers and to do so in such a way that actuarially there is no significant impact on the individual. However, we are talking about future rights and we will get on to discuss section 67 at the appropriate time.

On the issue of exemptions for small employers, which was raised perfectly properly by the hon. Member for Eastbourne, that is something that we will consult on with both sides of industry. Two possibilities occur. One would be to exempt those with fewer than 50 scheme members, which, I understand, would be in line with the information and consultation regulations. Another would be to exempt those schemes with fewer than five, which would be in line with stakeholder pensions. We do not have an empty mind on that; we have an open mind on it and we are consulting on the matter.

On public sector schemes, public service has a long-established tradition of consultation with interested parties. For example, very large public service schemes generally have statutory requirements to consult, which are set out in primary legislation that governs those schemes. We do not intend to disturb those existing arrangements. However, consideration will be given to extending the requirement to consult to schemes that are established and governed under arrangements that are comparable to those in the private sector, such as trust-based schemes. Such trust-based schemes are therefore likely to benefit from the safety net of statutory protection where none currently exists.

The hon. Member for Eastbourne was exercised by any mention of trade unions. I think that I dealt with this in my speech, but I emphasise that where there are recognised trade unions or appropriate information and consultation arrangements that have been approved by employees, employers must consult one or more of those bodies. Our proposals will ensure that that happens in accordance with our Green Paper commitment to implement the pension consultation requirement alongside consideration of the information and consultation directive. I have made it clear that although trade unions are crucial to that where appropriate, that is not the only route that we are taking.

On our old friend the balance to be struck between primary and secondary legislation—the role of regulation—some of the situations described in the hon. Gentleman's amendment are precisely what I said in my opening speech would be covered by regulation. However, the CBI has said that it does not want a ''one size fits all'' approach. That is exactly what accepting the amendment would give us. If we were to accept it, we would not be able to respond to new types of substantial change in future.

I was struck by the fact that the hon. Gentleman mentioned hybrid schemes, albeit in a slightly different context. That is a good example of how the pensions world is moving rather quickly in terms of approaches to pensions arrangements. Hybridity is a relatively new concept and there is a track record in the United States on that. I think that the hon. Gentleman was suggesting that it might grow in future. If we had been legislating on this subject just a few years ago, hybridity might not have been included in the Bill. That would have been a great mercy for the English language but it would not have helped those who are subject to those schemes. It is for that reason that we need to keep the door open to changes and it is why secondary routes and regulation are rather important.

I hope that I have dealt with most of the points that were raised. As usual in these circumstances, if I reflect that there are one or two that I have not dealt with sufficiently, I will e-mail the hon. Member for Eastbourne, who prefers that modern route. For those who prefer more traditional methods I will write using a quill pen.

Amendment agreed to.

Amendment made: No. 561, in

clause 231, page 154, line 40, at end insert—

', and

'( ) sections (Consultation by employers: occupational pension schemes) and (Further provisions about regulations relating to consultation by employers) (consultation by employers).'.—[Malcolm Wicks.]

Clause 231, as amended, ordered to stand part of the Bill.

Clause 232 ordered to stand part of the Bill.

Clause 233 - Admissibility of statements

Nigel Waterson (Conservative, Eastbourne)

I was puzzled by the provision. There are many so-called information requirements set out in enormous detail, where people are required as a result of the power to agree to requests to inspect premises and so on. All sorts of powers are set out in the Bill, and we have debated many of those ad nauseam. People have to produce those bits of information.

It looks as though pieces of information produced for the purposes of the Bill can be made admissible as evidence in any other proceedings, such as criminal proceedings or proceedings under section 168 of the Pension Schemes Act 1993 and so on. I begin to lose the plot at subsection (2). It determines that statements can be admitted in evidence. There is a question whether that is sensible. Will it make people more likely to draw on matters of privilege if they know that a statement they give for the purposes of the Bill can be used in criminal proceedings against them?

Vera Baird (Labour, Redcar)

I am grateful to the hon. Gentleman. I shall bask in this moment: I agree with him that there are concerns about the matter. I can see him flinching painfully and I find that understandable. Is it not the case that subsection (1) says that a statement made by someone in compliance with an information requirement under the legislation is admissible but only if it complies with the rules governing admissibility in the proceedings where one tries to introduce it? If it is not admissible under criminal law generally, and if it is involuntary—as it will be if it is brought about under a duty in the legislation—it will probably not be admissible in criminal proceedings.

Nigel Waterson (Conservative, Eastbourne)

I bow to the hon. and learned Lady's expertise, which is far greater than mine. I share her slight embarrassment that she and I seem to agree on something. I see her point about subsection (1). There is a question of admissibility of evidence, and there are a vast amount of rules on that subject, presumably to protect people's rights.

However, I am still very puzzled by subsection (2). If a statement complies with the rules about the admissibility of evidence in the ordinary way then it can be included as evidence in criminal proceedings. I do not understand the slightly odd provision that states that the prosecution or the regulator, who may be acting as prosecutor, cannot then adduce evidence relating to the statement, and

''no question relating to it may be asked''

unless whoever is representing the person involved raises questions themselves. It is rather like referring to previous convictions in a criminal trial.

It is a very long time since I have participated in any capacity in a criminal trial—certainly as a lawyer. I remember that the great no-no was to cross-examine police witnesses in such a way as to make the judge reveal the client's previous convictions, and in those days all my clients had significant numbers of previous convictions.

Is there a parallel there? This is not just a lawyer's point, although it is uncanny that the two lawyers on the Committee have battened on to it. What is the measure designed to achieve? If such a statement is admissible there are question marks about that, particularly concerning whistleblowing, and people's frankness and honesty in relation to pensions legislation—they might worry about more draconian things that could happen to them further down the road as a result of their statement. The statement might well require amplification, clarification and amendment, with regard to other evidence. It is odd that nobody can then proceed to adduce further evidence, nor ask any question relating to it, unless the defence puts the issue in play by its own actions. That is an important point.

Vera Baird (Labour, Redcar)

I had thought that this was an anorakish lawyer's point, so I am grateful to the hon. Gentleman for making it clear that it does have some mainstream importance, particularly in relation to whistleblowing.

Clause 233(1) refers to:

''A statement made by a person in compliance with an information requirement''.

Those are all defined, but they are basically duties to say something—to give a statement. Such a statement can be admitted in criminal proceedings

''so long as it also complies with any requirements governing the admissibility of evidence''

in those proceedings. Nothing in this legislation makes it admissible in criminal proceedings, but nothing stops it from being admissible if it is admissible according to criminal law rules.

However, there is a curious extra bit in subsection (2), which begins:

''But in proceedings to which this subsection applies''.

Subsection (3) specifies what those proceedings are; there is a short, or perhaps medium-sized, list of offences. If someone is charged with any of those offences, even if according to the criminal law rules a statement is admissible it cannot be admitted unless the defendant brings it into play.

I do not understand why that extra provision has been included. In particular, I do not understand why it has been put in as a protection for the offences in the list. If someone is charged with theft, fraud or obtaining pecuniary advantage by deception—or with any of the other charges that they could be faced with under the general criminal law—and if they have made statements under this measure, it appears that those statements would be admitted if they were

admissible in criminal proceedings, and that the extra protection would not apply. The extra protection that the statement cannot be admitted unless the defendant puts it in play applies only to a few listed offences. I do not understand why the extra protection is needed at all, or why, if it is needed, it is not needed across the board in all criminal proceedings, as opposed to just these few.

Malcolm Wicks (Labour, Croydon North)

As we have heard, this clause deals with self-incrimination. It provides that a statement given by a person in response to an information requirement imposed by the Bill cannot be admitted by the prosecution as evidence against him in criminal proceedings or any proceedings of the regulator that may result in a financial penalty being imposed. The same applies to evidence relating to such a statement.

Of course, the clause provides that the person who made the statement may use that statement in evidence themselves in such a case if they wish to do so. I will give an example. We have debated clause 45, which imposes on a number of parties a duty to report breaches of the law, commonly known as whistleblowing. Therefore, if the trustees have failed to appoint an actuary in a defined benefit scheme in order to ascertain its funding position, there is a duty for the trustees to inform the regulator that the scheme has no actuary.

The regulator could not use that report in proceedings to impose a penalty on the trustees. However, it could still act on the report and ensure that an actuary was appointed by issuing an improvement notice or, in an extreme case, appointing an additional trustee. If the breach were very serious and the regulator decided that the imposition of a sanction on the trustees would be an appropriate tool to use, it could still do so. However, it would then have to obtain evidence of the lack of an actuary from a different source, such as the auditor or administrator of the scheme.

Subsection (4) lists the information requirement provisions in the Bill that impose a duty to make statements. It provides that such statements can be used as evidence if the breach or alleged criminal offence is one of failing to provide information and as evidence relating to perjury offences. It will ensure that, when the regulator or the board of the PPF require information relevant to their functions, those with a duty to provide such information can be punished if they either fail to supply it or provide false information.

In the important area of law under discussion, I feel slightly outgunned, not least by my hon. and learned Friend the Member for Redcar (Vera Baird). In addition to what I have just said, I will reflect on what she and the hon. Member for Eastbourne have said.

Nigel Waterson (Conservative, Eastbourne)

I appreciate what the Minister says. One does not expect him to say, ''Ah!'' and receive inspiration immediately, because we are discussing a difficult matter. I may have misheard him, but in his opening remarks he seemed to suggest that the

provision would allow the person who provided the statement to choose whether it was used in evidence. He gave the example of the whistleblower, and I understand that situation, in which someone who would not be blamed for anything comes forward to provide a statement. It is perfectly right and proper to encourage that.

My concern, and that of the hon. and learned Member for Redcar, was for people who had incriminated themselves by providing a statement, because they had done something that they should not have done, or not done something that they should have done. In that context, they cannot choose whether their statement is included. It seems that it will be included as long as it meets the normal rules for admissibility of evidence, and that is outwith the control of the individual.

Subsection (2) is about only whether anything can be added or subtracted from the statement by way of further evidence, so such a person would have no real control over it, unless their legal team decided to ask questions introducing further evidence about the statement. The statement is given, it is there and it will be included in court proceedings unless it fails to meet admissibility rules—

Malcolm Wicks rose—

Nigel Waterson (Conservative, Eastbourne)

I am quite happy for the Minister to write to us on this matter.

Malcolm Wicks (Labour, Croydon North)

As I said, I would like to reflect on the matter, but I would just like to add that in my opening statement I said that the clause provides that a statement given by a person in response to an information requirement imposed by the Bill cannot be admitted by the prosecution as evidence against him or her in criminal proceedings. I made that clear. I am advised that the protection against self-incrimination contained in subsection (2) does apply to Theft Act proceedings. It applies to all criminal proceedings other than those listed in subsection (4).

I have admitted that this matter represents deep legal water for a lay person such as myself, and I will reflect on our discussion and write to hon. Members should it prove appropriate—as it may well do.

Question put and agreed to.

Clause 233 ordered to stand part of the Bill.

Clauses 234 to 236 ordered to stand part of the Bill.

Clause 237 - Breach of regulations

Chris Pond (Labour, Gravesham)

Good morning, Mr. Griffiths; I thought that I had better say something this morning.

Clause 237 provides that civil penalties and criminal offences provided for in the 1995 Act apply to regulations made under this Bill in the same way as they apply to regulations made under the 1995 Act. The penalties concerned are those under subsections (3) to (9) of section 10 of the 1995 Act: in other words,

penalties of up to £5,000 for individuals and up to £50,000 in all other cases. The criminal offences are those provided for by section 116 of the 1995 Act, which gives a power to provide that contravention of regulations is an offence. The clause means that regulations made under the Bill that impose an obligation on someone can provide that a breach of that obligation is either a criminal offence, or exposes the person who is in breach of the obligation to a civil penalty.

Nigel Waterson (Conservative, Eastbourne)

I knew that the little devil was in there somewhere.

I am grateful to the Under-Secretary for clarifying that point—although in effect, it had already been clarified by the hon. Member for Northavon. May I underline a point that I made in an earlier debate? If we are going to impose not insignificant civil penalties, it is important—certainly in relation to the consultation process on changes to pension schemes—that the employers' organisations sign up to the concept, because by definition they represent the better employers. That should be recognised. The discussion may be academic, because the Committee, and in particular, the hon. Member for Glasgow, Anniesland, have teased out the fact that ''consultation'' means no more than that. Apparently, the employer does not have to take a blind bit of notice of what the employees think about a particular proposal. That is box ticking at its worst. I hope that the Government will not trumpet the provisions about consultation too loudly if there is no beef in them, because the employer is perfectly at liberty to take no notice of what is said.

Question put and agreed to.

Clause 237 ordered to stand part of the Bill.

Clause 238 - Subordinate legislation (general provisions)

Chris Pond (Labour, Gravesham)

The clause makes provision in relation to secondary legislation made under the Bill. It provides that any power under the Bill to make subordinate legislation is exercisable by statutory instrument, except in the case of an order-making power conferred on the pensions regulator. The Committee will be aware that the clause therefore covers rules, regulations and orders made under the Bill. It also contains standard technical provisions, of a kind commonly found in legislation, to govern the way in which powers to make secondary legislation conferred by the Bill may be exercised. For example, the clause includes the power to make

''incidental, supplementary, consequential or transitional provision''.

Orders and regulations under this Bill will be subject to parliamentary control in accordance with clause 239, which we will come to shortly.

Nigel Waterson (Conservative, Eastbourne)

I have a couple of questions about subsections (4) and (5). What concerns me about subsection (4) is not the earlier part of the sentence about making subordinate legislation, but the part referring to the

''power to provide for a person to exercise a discretion in dealing with any matter.''

Will the Under-Secretary clarify that? If something were mandatory under the Bill, would it be possible, by means of later subordinate legislation, for it suddenly to become a matter of discretion for an individual or for the regulator? That seems an obvious way of getting round some important provisions in the Bill—but I may be wrong. I would be grateful if the point could be clarified.

Although I appreciate that subsection (5) appears in other guises in other legislation, I am concerned about what safeguards there are—apart from parliamentary scrutiny, which we will talk about later—in relation to the word ''expedient''. It is one of those words that I shudder when I see in legislation, because it seems to allow the Executive to do things that we might not want them to do if they were offered as options in the Bill and for debate in Committee. Again, I would be grateful for some help from the Under-Secretary on that point.

Chris Pond (Labour, Gravesham)

I can reassure the hon. Gentleman on his first point about discretion being conferred where it would not otherwise be appropriate. He is right to raise the question of whether that would give powers for discretionary interpretation that might be deemed unfair to the parties concerned. I would like to write to him and other members of the Committee on his second point, but I believe that I shall be able to reassure him on that as well.

Question put and agreed to.

Clause 238 ordered to stand part of the Bill.

Clause 239 - Parliamentary control of orders and regulations

Steve Webb (Liberal Democrat, Northavon)

As I understand it, the clause indicates which of the many regulations that have to be passed to put all the provisions into effect are subject to the affirmative procedure. It is nice to see a good long list. It should keep us in business for many happy hours.

I am particularly pleased to see included on the list the power in subsection (2)(o) for the Secretary of State to scrap the insurance basis of the PPF—that is, the power to decide not to pay out because there is not much money. I am pleased that that will require an affirmative resolution of both Houses, as it rightly should.

There is just one little thing that I do not understand. Subsection (1) states that everything is subject to the negative procedure except for the matters listed in subsections (2) and (3), but subsection (3) states that subsection (1) does not apply to the matters listed in it. I would have thought that if one said that everything is negative except those

things that are positive, there would be two parts—but there is a mysterious third part. The explanatory notes state:

''The exercise of the remaining powers . . . will attract the negative procedure, except for those powers (listed in subsection (3)) . . . which are not subject to Parliamentary control.''

I am slightly nervous about matters not being subject to parliamentary control. Would the Minister tell us what that means?

Nigel Waterson (Conservative, Eastbourne)

I shall follow up on some of the points made by the hon. Member for Northavon and ask whether the list in subsection (3) is exhaustive, and why those items were put in a special category. I broadly welcome the long list of matters that are to be subject to the affirmative procedure; that is right and proper. It is important that the House should have an opportunity to say something about regulations on the administration levy, the initial levy and the levy ceiling, as those are issues that the Committee has debated, and about which we may hear more this evening at Mr. Kandarian's lecture.

I endorse what the hon. Gentleman said about subsection (2) paragraphs (n) and (o), both of which deal with the Government's right to cut the benefits at a certain point. Without trying to seem too doom-laden, we have made several arguments about the fragility of the PPF in its early stages, given the flat rate and the possibility that schemes will wait for it to come into operation only to collapse into its arms. I, and other hon. Members, have expressed considerable concerns about that more than once. It is absolutely right that such matters should be debated in the House.

I also agree that complaints about, for example, maladministration should be treated in that way. Also important are information and advice to employees. The list includes many of the important issues that deserve the affirmative procedure. As such, I am happy to support the clause, but I repeat the question asked by the hon. Member for Northavon, which also occurred to me, about subsection (3).

Chris Pond (Labour, Gravesham)

We have had some debate on the issues in paragraph (o), and it was made clear in our earlier discussions that we are building in flexibility not because we believe that the fund will be unable to meet anticipated demands on it, but because it is sensible to build in flexibility for the long term. We do not need to dwell on that, and the fact that it will be put to Parliament for consideration is an important safeguard.

On the issue raised by the hon. Member for Northavon and the other elements of the subordinate legislation that are not subject to the affirmative procedure, he will note from the list that on the whole, they are pretty standard and routine issues on which I doubt that Parliament would wish to spend much time. However, I assure him that those in subsection (3) are standard procedures—for example, commencement—that go to the Joint Committee for Statutory Instruments but are not laid before Parliament. That largely reflects provisions under the Pensions Act 1995,

except for commencement of codes of practice, which is a new power. I hope that with those assurances, the Committee will be happy for the clause to stand part of the Bill.

Question put and agreed to.

Clause 239, as amended, ordered to stand part of the Bill.

Clause 240 - Consultations about regulations

Nigel Waterson (Conservative, Eastbourne)

I hope that this is, in a sense, an apology from Ministers for the problems of lack of consultation, late tabling of amendments and so on. It is extremely important that there is proper consultation and I am pleased that the Government seem to recognise that, at least in this clause. I hope that, unlike the consultation on changed pension schemes, it might be guaranteed to have some effect on what will happen.

I hope and assume that the words

''consult such persons as he considers appropriate''

include all the relevant bodies representing industry, the pensions industry and so on. It would not be in the Minister's interest not to consult as widely as possible, but I am concerned that the Government may slip back into their bad old ways with subsection (2)(b), under which the Secretary of State may decide that, because of the urgency, ''consultation is inexpedient''. I hope that the provision will be used very sparingly, particularly if the urgency is caused by the slowness of the Department in sorting the matter out in the first place, which is not difficult to envisage given its track record with the Bill and the Government amendments.

What has thoroughly defeated me—perhaps I read it too late last night or too early this morning—is subsection (2)(c), under which the provision does not apply

''to regulations . . . in a statutory instrument made before the end of the period of six months beginning with the coming into force of the provision of this Act by virtue of which the regulations are made''.

Why? I cannot see the relevance of a six-month cut-off. Why should that make a difference to whether there is consultation? If something deserves consultation, it should receive consultation. If it does not, so what? Perhaps the Minister could explain that.

I also have a slight concern about subsection (2)(d), under which it will be all too easy to certify that something is

''consequential upon a specified enactment''—

but I am sure that no one in the Department would even think of doing that, so the less said, the better. My other concerns, however, are substantive and I should be grateful for an explanation.

Vera Baird (Labour, Redcar)

I, too, wondered about subsection (2)(c) and the amnesty on needing to consult

''before the end of the period of six months beginning with the coming into force of the provision of this Act''

under which the relevant regulation was made. The provision may not come into force for another year or two, and there will still be an amnesty on consultation at that time. I wondered why that was necessary.

Chris Pond (Labour, Gravesham)

The issue of consulting the appropriate body or persons was discussed earlier on Conservative amendments. The issue here is that, although we are committed to the principle of consulting as widely as is appropriate, there may be circumstances in which it is not appropriate to consult every person or group concerned. For example, one would not necessarily consult employers when considering—

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 Two o'clock.

Standing Committee B

Clause 240 - Consultations about regulations

Chris Pond (Labour, Gravesham)

Committee members will be aware of the popular Radio 4 programme ''Sorry I Haven't a Clue''. That is not my response to the questions asked before we adjourned, but on that programme, contestants are required to sing along to the soundtrack of a popular song. The song is then paused and the winner is the contestant who is still singing the right part of the song when the soundtrack is turned on again. My challenge today is whether I can remember the right point in the sentence at which our sitting adjourned. In that context, I shall say, ''This would be inappropriate''—let us see whether that matches with the Hansard report of this morning's proceedings.

The hon. Member for Eastbourne (Mr. Waterson) was concerned that not all groups would be consulted, including those with the most passing of interest in the matter. I was explaining that it might be inappropriate for consultation to take place, for example, with the employer when the matters that were being consulted on were of concern to the trustees. I was simply making the point that consultation should be with the appropriate individuals and groups.

Concern was also raised about the consultation time, which would usually last for 12 weeks, and whether it could be undertaken in a shorter time in certain circumstances, such as when urgent changes have to be made and it is necessary for the consultation process to take place urgently.

Nigel Waterson (Conservative, Eastbourne)

I hope that the Under-Secretary and I are not misunderstanding each other, but my worry about subsection (2)(b) is that there would be no consultation, not that the process would be shortened. It states that subsection (1) would not apply

''where it appears to the Secretary of State that by reason of urgency consultation is inexpedient''.

That suggests that consultation would not occur at all.

Chris Pond (Labour, Gravesham)

As I explained, within the general principle that we wish to consult whenever possible, we hope that consultation will take place even in circumstances in which we cannot undertake the full 12 weeks. However, there will be circumstances in which action will have to be taken almost immediately and consultation is not possible. We must consider the full range of possibilities but within the general context

that, whenever possible, consultation should take place.

The hon. Member for Northavon (Mr. Webb) and my hon. and learned Friend the Member for Redcar (Vera Baird), who sadly has not been able to join us, raised an important point about the six-month period during which consultation does not need to take place. That is a fairly standard provision, carried over from similar legislation. We trust that there has been sufficient scrutiny of such legislation and that further consultation would not be appropriate within the first six months of the Bill coming into effect.

Nigel Waterson (Conservative, Eastbourne)

I have two points to make. First, the fact that such a provision appears elsewhere does not mean that it is not gobbledegook in that legislation, too. The consultation concerns the regulations, to be established in a statutory instrument, which we have not seen. Given some of the principles that have been painfully extracted and hammered out in Committee, we are talking about two different animals. Secondly, I still do not understand the reason behind the magic period of six months. I am not claiming any great credit, but I think I was the first to raise the matter, which also worried the hon. and learned Member for Redcar and the hon. Member for Northavon. I suspect that all three of us—well, if all three of us were here—would be puzzled by what the Under-Secretary has said so far. However, perhaps he has not reached the relevant part of his briefing notes.

Chris Pond (Labour, Gravesham)

I apologise to the hon. Gentleman if I left him out of my comments. He described the provision as gobbledegook; in that case, it is also gobbledegook in the Pension Schemes Act 1993 and the Pensions Act 1995. I will leave that statement on the record without further comment.

The principle is that, as the first sets of regulations come into force, following parliamentary debate on the policy during the Bill's passage through Parliament, the obligation to consult does not apply. That is the purpose of the six-month cut-off point. However, that does not prevent consultation from taking place and, where appropriate, it will take place.

Question put and agreed to.

Clause 240 ordered to stand part of the Bill.

Clauses 241and 242 ordered to stand part of the Bill.

Schedule 11 - Minor and consequential amendments

Chris Pond (Labour, Gravesham)

I beg to move amendment No. 571, in

schedule 11, page 229, line 8, at end insert—

' In section 146 (functions of the Pensions Ombudsman)—

(a) for subsection (1)(f) substitute—

''(f) any dispute, in relation to a time while section 22 of the Pensions Act 1995 (circumstances in which Regulator may appoint an independent trustee) applies in relation to an occupational pension scheme, between an independent trustee of the scheme appointed under section 23(1) of that Act and either—

(i) other trustees of the scheme, or

(ii) former trustees of the scheme who were not independent trustees appointed under section 23(1) of that Act, and'', and

(b) in subsection (8), in paragraph (a) of the definition of ''independent trustee'' for the words from ''section 23(1)(b)'' to the end substitute ''section 23(1) of the Pensions Act 1995 (appointment of independent trustee by the Regulatory Authority)''.'.

Win Griffiths (Labour, Bridgend)

With this we may discuss the following:

Government amendments Nos. 572 to 578.

Government new clause 38—Independent trustees.

Chris Pond (Labour, Gravesham)

I want to take Committee members for a stroll down memory lane. When we discussed clause 31, we committed ourselves to tabling a new clause to deal with independent trustees. That new clause is now before us.

New clause 38 amends sections 22 to 25 of the 1995 Act. It gives the regulator power to appoint an independent trustee if the employer is insolvent or if there is a pension protection fund assessment in relation to the scheme. The 1995 Act requires an insolvency practitioner or official receiver to ensure that an independent trustee is in place at all times. If there is none, they are required to appoint one. There is evidence to suggest that an independent trustee is not always appointed. Currently, the only way to resolve that situation is for a member of the scheme to apply to court to force the insolvency practitioner or official receiver to appoint an independent trustee. However, that does not happen often, mainly because of the potentially prohibitive personal costs to the

member. The new clause will help to ensure that an individual trustee is appointed where required by empowering the regulator, rather than the insolvency practitioner or official receiver, to appoint an independent trustee.

My hon. Friends the Members for Cardiff, West (Kevin Brennan) and for Hamilton, South (Mr. Tynan) expressed unease about the fees charged by independent trustees, especially when a scheme is in wind-up. By enabling the regulator to decide whether an independent trustee appointment is appropriate, rather than by requiring an insolvency practitioner or official receiver to appoint one in every case, we do away with unnecessarily costly appointments. The regulator will have the power to opt instead to appoint a trustee under section 7 of the 1995 Act, and that trustee could be a member or a lay trustee.

The regulator will also have the power to determine whether the employer, the scheme or both should meet the costs of any independent trustee that the regulator appoints. The new clause also allows the regulator to establish a register of independent trustees. It requires any independent trustee that the regulator appoints to come from that register. We will set out in regulations the minimum criteria for inclusion on the register, but I assure hon. Members that the measure will enable the regulator to monitor the fees charged by independent trustees. I know that that innovation will be welcomed by Members on both sides of the Committee.

A mixed bag of consequential amendments accompany the new clause; I offer my apologies for that, but they are all necessary technical and editing changes resulting from the amendments to section 22, and the replacement of sections 23 and 24, of the 1995 Act. The amendments further demonstrate our resolve to protect members in occupational pension schemes and their rights. The measures are supported by the insolvency practitioner and independent trustee groups. I hope that the new clause and the related amendments are accepted.

Nigel Waterson (Conservative, Eastbourne)

We broadly welcome new clause 38, as do the professionals involved. There are circumstances in which the role of independent trustees is important, even in existing legislation. There is at least some anecdotal evidence of cases in which an independent trustee could have been of great assistance but has not been appointed because of the problems associated with doing that, not least of which is the legal costs involved in bringing the matter to court. It fits in logically with the scheme of the new legislation for the regulator to have that power.

I was expecting a bit more on how the role of independent trustees will fit into the new architecture. On one level, one could argue that such trustees might be a less frequently used weapon in the armoury because of all the regulator's other powers. Will the independent trustees wither on the vine because there are so many other powers? To use a metaphor, it seems that a choice of clubs—some blunter than others—might be allowed to help to deal with a particular shot on the golf course. However, as I know absolutely nothing, and care even less, about golf, I shall abandon that analogy. I apologise profusely to any golfers in—well, the entire electorate, really. There was

a time when, to be a Tory MP, it was a requirement to play golf with a certain handicap, but I think that that has now been dropped.

Malcolm Wicks (Labour, Croydon North)

You've still got handicaps.

Nigel Waterson (Conservative, Eastbourne)

Tee hee.

I understand that it makes a lot of sense for the regulator to have the power that we are discussing. It may have been the hon. Member for Glasgow, Anniesland (John Robertson) who said that the cost of the independent trustees can appear exorbitant—perhaps I should not say that, although we enjoy absolute privilege. If, in passing, the measures allow the regulator to keep an eye on fees, that is helpful and important. I gather that that is the policy intention behind the measures.

Will the Under-Secretary talk us through the circumstances in which it would be appropriate to charge particular parties? He was saying, and it seems clear from the new clause, that the scheme, the employer, or both could be charged. Perhaps he could say a little more about how that will operate. What would be the logic behind the decision to charge one or the other, or possibly both? If the third of those options were taken, how would the charge be apportioned?

Broadly, we support the provisions. For once, they seem to have been consulted on, and their terms seem to have been agreed with the practitioners, so it would be churlish for us to disagree with them.

Steve Webb (Liberal Democrat, Northavon)

We certainly welcome new clause 38, particularly proposed new section 23(4), which says:

''Regulations must provide for the Authority''—

I presume that that is the regulator—

''to compile and maintain a register of persons who satisfy the prescribed conditions for registration.''

I want to probe that a little further. A few weeks ago, we did not even know that the provision was coming; now it is to be in the Bill. That is welcome, but those who will be subject to it might reasonably want to know a bit more about what is in the Government's mind.

The new clause states that the regulator will do that. Will the regulator be given a free hand or will the Government offer guidance on what they consider to be excessive charge levels? How might such things be measured? Would there be a maximum percentage of the fund that could go in charges, or a maximum length of time in which to wind up? Could somebody approved for the list who puts out a new wind-up price list, which has increased that month so that it goes beyond the price cap, get knocked off the list?

How is this all going to work? The proposal is a good thing in principle, but it is at the other end of the scale from most of the Bill. It is almost too succinct to give us much of a clue about how it will operate. Who will decide the issue? The new clause states that it will be the regulator. Do the Government have any views? Will they express their views, or will the regulator

simply get on with it? Is it likely to be a tough hurdle to get across? There is a widespread feeling that independent trustees have ripped off a lot of workers who were already not going to get much pension—in fact nothing at all, what with £100 charges for a phone call and all that business.

I urge the Government to press the regulator to make this a tough, tight price cap. It would be helpful to know how far the Government are thinking of going.

Chris Pond (Labour, Gravesham)

I welcome what I take to be support for the provisions from both Opposition spokespeople. To take the last points raised first, the issue of the charges has been raised by many Committee members in the past. In fact, when funds are already in some difficulty, the charges may make the difficulties worse. We are taking action to allow the regulator to check independent trustees' fees. In more straightforward cases, the regulator can appoint a trustee under section 7 of the 1995 Act in order to try to keep control of the costs. As I said in opening the debate, that person may be not a professional trustee but a lay member.

I am not sure whether it would be appropriate to have a scale of charges, because the circumstances, the amount of work involved and the size of the fund would differ. It is probably appropriate that the regulator should have the flexibility to decide the appropriate fee. However, what would be different is that there would be some real control over the fee levels. If there are people who are considered to have consistently ''overcharged'', it is unlikely that they would find themselves on the register in the first place. There are a number of safeguards available.

Nigel Waterson (Conservative, Eastbourne)

Does the Under-Secretary agree that the issue is not so much about the tariff—that reminds me of that old taxi tariff that hangs by the Members' Entrance—but about the time that a trustee puts in, and, in the case of a professional trustee, how many staff are involved in dealing with a problem? It is more the overall charge, rather than the hourly, daily or weekly charge, that makes the difference.

Chris Pond (Labour, Gravesham)

The hon. Gentleman makes his point well; the charge has to be proportionate and take account of the amount of work and the circumstances involved, as I said.

I think that the hon. Member for Eastbourne broadly supports our proposals. I think that he accepts that we have to make the changes, because in many cases things are not working properly: often, when an independent trustee should be appointed, no one is. In other cases, the appointments of independent trustees are inappropriate and impose on a fund charges disproportionate to the need.

Nigel Waterson (Conservative, Eastbourne)

The Under-Secretary is showing signs of reaching his peroration, so I will just remind him of my point about the basis of charging the employer or the scheme, or both.

Chris Pond (Labour, Gravesham)

I apologise. As the hon. Gentleman may remember, we discussed that in our earlier debates. The employer could still be in a financially buoyant position, and it would then be appropriate that the

charges should fall there. Alternatively, the employer might be effectively insolvent, but the scheme could still have funds available. The regulator will have to judge where the charges ought to fall, in the circumstances in which the scheme finds itself. That is not something that we can put in the Bill, but we must give it as a power to the regulator.

Nigel Waterson (Conservative, Eastbourne)

Just to be clear, is this a question of the resources of the payer rather than of any other considerations, such as who might be more to blame for the mess that they are all in?

Chris Pond (Labour, Gravesham)

The regulator would have to take account of those factors as well. Perhaps I should have included that in the list of circumstances that would be considered. Certainly that would be a factor, in addition to the ability to pay.

Amendment agreed to.

Amendment made: No. 572, in

schedule 11, page 229, line 18, at end insert—

' In section 178 (power to make regulations as to the persons to be regarded as trustees or managers of schemes for certain purposes), in paragraph (b) for ''to 26C'' substitute ''to 26''.'.—[Mr. Pond.]

Chris Pond (Labour, Gravesham)

I beg to move amendment No. 542, in

schedule 11, page 229, line 18, at end insert—

' In section 192(2) (provisions extending to Northern Ireland)—

(a) for ''section 145 (except subsections (4)'' substitute ''section 145 (except subsections (4A) to (4C)'', and

(b) at the appropriate place insert—

''section 145A,''.'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss the following:

Government amendments Nos. 546 to 548 and 540.

Government new clause 23—The Pensions Ombudsman and Deputy Pensions Ombudsmen.

Government new clause 24—Jurisdiction.

Government new clause 25—Investigations.

Chris Pond (Labour, Gravesham)

The amendments and new clauses all relate to the pensions ombudsman. For convenience I will discuss them as a group, although for clarity I will deal with them in order.

New clause 23 amends existing legislation about the pensions ombudsman's tenure. It provides that he can be removed from office only on the grounds set out in his terms of appointment. It increases his independence by enhancing his security of tenure and obviates any suggestion that the Secretary of State can remove him from office for no good reason. Hon. Members will remember that in our earlier deliberations on the PPF ombudsman there was a concern that at some future stage there might be what I think was described as a maverick Secretary of State, who might act unreasonably in removing the ombudsman. We expect that to occur only should there be a change of Government—some time in the next century—but it is important that we put the safeguard in the Bill in any case. The amendment is in line with the terms of office of the pensions regulator

tribunal, which have been considered by the Committee.

New clause 23 also extends existing provisions to allow for the creation of one or more posts of deputy pensions ombudsman. The spotlight on pensions over the past few years has inevitably led to a significant increase in cases coming to the ombudsman. Therefore, proper assistance and support in his work is particularly important now. The new clause will permit one or more deputies to be appointed to carry out all the duties of the pensions ombudsman either in his absence in the event of a vacancy or from time to time to tackle any outstanding casework. The deputy will be able to make determinations in all the cases that currently fall within the pensions ombudsman's jurisdiction.

Subsections (4) and (5) of the new clause also contain the normal disqualification provisions for political appointments in the House of Commons Disqualification Act 1975 and the Northern Ireland Assembly Disqualification Act 1975. That is another disappointment for the hon. Member for Eastbourne, who will not be able to boast at the golf club of being deputy pensions ombudsman, any more than he could about being deputy PPF ombudsman—and since we have just learned that he does not play golf, that would be an additional handicap.

New clause 24 will allow one-off acts of administration to be brought within the pensions ombudsman's jurisdiction. I should explain that that is being introduced because in the case of Britannic v. Pensions Ombudsman, the Court of Appeal distinguished between carrying out an act of administration in connection with a pension scheme and being concerned with its administration. The Court of Appeal held that a person who carried out one or more acts of administration in connection with a pension scheme might fall outside the ombudsman's jurisdiction because they would not be a person responsible for the administration of that scheme. That is confusing and disempowering for anyone who has a complaint arising from an act of administration carried out, for example, by an insurance company at the request of the scheme administrators, and means that the only option for such persons is to seek redress in the courts.

The amendment enables regulations to specify that a person responsible for an act or acts of administration may be deemed to be responsible for the administration of a pension scheme for the purpose of the complaint being made or a dispute being referred to the pensions ombudsman about his or her actions or failure to act. It does not have retrospective effect, as that would be unfair on those who carry out acts of administration and whose actions cannot at present be complained about. If the clause had retrospective effect, those persons would be subject to investigations in relation to acts that occurred at a time when they assumed—and would have been entitled to assume—that they did not fall within the ombudsman's jurisdiction.

Amendments Nos. 546, 547 and 548 are simply a technical referral of the existing legislation enabling regulations to be made in respect of the ombudsman's

jurisdiction where third parties are concerned. Despite extensive consultation with the pensions industry over several years, a workable solution has not been found that would enable the pensions ombudsman to deal with those cases without unacceptable delays and costs to pension schemes, and possibly to scheme members themselves. It is therefore appropriate that section 54 should be repealed. In any cases where third parties' rights might be affected by a decision of the pensions ombudsman, it is open to the complainant to seek redress through the courts. I ask hon. Members to accept the amendment.

Nigel Waterson (Conservative, Eastbourne)

I agree that the Government amendments are drafting amendments, technical in nature, and we have no problems with them. On new clause 24, I do not profess to understand the distinction drawn by the lords justices in the Britannic case, although, having once been tangentially involved in a case about a missing comma involving a ship charter party that went all the way to the House of Lords, I know that anything is possible. This is clearly something that exercises the ombudspeople's community; when ombudspeople meet—at the golf club or anywhere else—it is something that they often talk about. There are more and more of these people—so many, indeed, that they will soon be able to have their own club, and I am sure that the Under-Secretary will be given honorary membership. I cannot profess to second-guess the draftsman, but if the new clause does deal with the Britannic case, it is addressing a serious issue that needs to be addressed.

In new clause 23 we are back with our new best friend, the deputy ombudsman—in this case, the deputy pensions ombudsman. I am slightly losing track, but the drift of Government policy, if that word does not give it too much of a sense of direction—

Malcolm Wicks (Labour, Croydon North)

Ho, ho.

Nigel Waterson (Conservative, Eastbourne)

Is attention to my lecture beginning to recede?

As we debated on Tuesday, the drift of Government policy is to have, at least initially, the existing Act for ombudsmen to apply to the PPF ombudsman. The new clause underlines the concerns that I expressed the other day about the deputy PPF ombudsman being activated. I do not want to rerun that debate, but to refresh the Committee's memory we need to look at proposed new section 145A(4). The deputy pensions ombudsman could be activated only if there were vacancy, which makes sense, or if the ombudsman is unable to discharge his functions—perhaps he has gone mad or is ill—and, crucially,

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

As I argued the other day, I cannot understand why if there is to be a deputy—which is a sensible idea if there is going to be an ombudsman in any context—they should be put behind a glass screen that says, ''To be broken when needed, but only by the Secretary of State.'' That is taking away from the ombudsman—whichever one I am talking about—the flexibility to be able to draw on the deputies. I use the plural because now they have begun to trickle out, there might be more than one, and we might be looking at a bunch of

them. The ombudsman should be able to draw on the deputies as needed to give flexibility to his role, particularly if he is now to have a dual role in dealing with the PPF stuff as well. Without laboriously returning to the previous arguments about the PPF, may I ask the Under-Secretary to say that he will rethink whether more flexibility can be built in for the ombudsman to bring to bear the energies and talents of the deputy?

Chris Pond (Labour, Gravesham)

As we have heard throughout the Committee proceedings, my hon. Friend the Minister is happy and concerned to reflect on all the issues. He reflected a great deal before we tabled the new clauses and amendments, and I am sure that he will reflect again.

Let me explain why the Secretary of State can determine other circumstances, or, in the wording of the Bill, why that can be done

''with the consent of the Secretary of State.''

It is important that we recognise that the deputy ombudsman will have the same powers as the pensions ombudsman himself or herself. It is also important that the deputy has the same independence and impartiality as the pensions ombudsman. Questions could be asked about his independence were he to carry out his duties only when asked to do so by the pensions ombudsman, which is why we have provided the flexibility of allowing the deputy to step in

''with the consent of the Secretary of State.''

It is a back-stop, which, to some extent, gives more parliamentary accountability to the whole process.

On the Britannic case and new clause 24, I assure the hon. Gentleman that there is an issue at stake which involves individual acts of administration that are, at the moment, outside the scope of a complaint that can be brought to the ombudsman. In those cases, members can only use the courts to pursue a complaint against individual acts of administration, whereas somebody who is responsible for the administration of a scheme as a whole comes within the remit of the ombudsman. As with the question about particular types of administration, such as the example that I gave in connection with insurance, we need to give people the opportunity to use the ombudsman process to pursue a complaint rather than require them to go through the expensive business of going through the courts.

Amendment agreed to.

Amendments made: No. 94, in

schedule 11, page 229, line 20, at end insert—

' In section 4 (suspension orders), in subsections (3) and (5) for ''class'' substitute ''description''.'.

No. 573, in

schedule 11, page 229, line 21, leave out from 'trustees)' to end of line 22 and insert '—

(a) in subsection (1) omit ''a trustee of such a scheme ceases to be a trustee'', and

(b) in subsection (2) for ''section 23(1)(b)'' in both places substitute ''section 23(1)''.'.

No. 95, in

schedule 11, page 229, line 22, at end insert—

' In section 9 (removal and appointment of trustees: property), after ''exercise'' insert ''by order''.'.

No. 574, in

schedule 11, page 229, line 26, at end insert—

' In section 22 (circumstances in which independent trustee provisions apply), in subsections (1) and (3) for ''to 26A'', in each place, substitute ''to 26''.

In section 25 (appointment and powers of independent trustees: further provisions)—

(a) in subsection (1) for ''section 23(1)(b)'' substitute ''section 23(1)'',

(b) in subsection (2)—

(i) after ''a scheme'' insert ''and there is an independent trustee of the scheme appointed under section 23(1)'', and

(ii) omit from ''but if'' to the end,

(c) in subsection (3) for '', no independent trustee of the scheme may'' substitute ''and there is an independent trustee of the scheme appointed under section 23(1), the independent trustee may not'', and

(d) in subsection (4)—

(i) for ''section 23(1)(b)'' substitute ''section 23(1)'', and

(ii) after ''person'' insert ''(within the meaning of section 23(3))''.

In section 26 (insolvency practitioner or official receiver to give information to trustees), in subsection (1) after ''a scheme'' insert ''by virtue of subsection (1) of that section''.

Sections 26A to 26C are hereby repealed.'.

No. 96, in

schedule 11, page 229, line 28, at end insert—

' In section 29 (persons disqualified for being trustees), in subsection (5) for ''class'' substitute ''description''.'.

No. 97, in

schedule 11, page 229, line 29, after 'consequences)' insert '—

(a) in subsection (2), after ''exercise'' insert ''by order'', and

(b) '.

No. 567, in

schedule 11, page 229, line 32, leave out paragraph 14.

No. 98, in

schedule 11, page 230, line 41, at end insert—

' In section 69(2) (power to make provision in relation to applications under that section)—

(a) for ''about the manner of dealing with'' substitute ''requiring'', and

(b) after ''this section'' insert ''to meet prescribed requirements''.'.

No. 99, in

schedule 11, page 230, line 41, at end insert—

' In section 71A(4)(d) (power to make provision in relation to applications for the purposes of that section)—

(a) for ''before such time as may be prescribed'' substitute ''before an application is made for the purposes of this section'', and

(b) for ''an application for the purposes of this section'' substitute ''the application''.'.

No. 575, in

schedule 11, page 231, line 32, at end insert—

' In section 118 (powers to modify Part 1 of the Pensions Act 1995)—

(a) in subsection (2) for ''to 26C'' substitute ''to 26'', and

(b) omit subsection (3).'.

No. 100, in

schedule 11, page 231, line 42, after '''Authority'',' insert—

'( ) in subsection (3) after ''may'' insert ''by direction'','.—[Mr. Pond.]

Chris Pond (Labour, Gravesham)

I beg to move amendment No. 512, in

schedule 11, page 232, leave out lines 14 and 15 and insert—

'39 (1) Paragraph 1 of Schedule 1 (application of enactments relating to occupational trust schemes to certain stakeholder schemes) is amended as follows.

(2) In sub-paragraph (2), in paragraph (b)—'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss Government amendment No. 513.

Chris Pond (Labour, Gravesham)

The amendments update the Welfare Reform and Pensions Act 1999 to ensure that trust-based personal stakeholder pension schemes are subject to the fraud compensation policies that we have discussed. Such schemes will also be subject to the provisions on gathering information set out in clauses 152 to 165. This is another example of the Government maintaining consistency of approach with the Pension Compensation Board's current coverage of pension schemes, although there have been no fraud compensation payments to stakeholder pension schemes to date.

Without bringing those schemes under the PPF umbrella, they would not have the formal protection that they currently enjoy. Due to the unusual nature of the schemes, we propose to apply the clauses on fraud compensation and information gathering with modifications that will be prescribed by the Secretary of State. That will enable us to remove aspects of those clauses that do not apply in the case of stakeholder pension schemes because, for example, they have no employer. It will also enable us to introduce new requirements in the event of them being needed.

Trust-based stakeholder pension schemes are rare. There are currently five, all of which have fewer than 400 members. However, as they have received PCB protection, we want that to continue under the PPF. The appeal and review rights in relation to full compensation will apply to those schemes in the same way as they apply to occupational schemes.

Steve Webb (Liberal Democrat, Northavon)

Are the trust-based stakeholder pension schemes the same as the individual pension accounts, which the Treasury launched but which never really took off?

Chris Pond (Labour, Gravesham)

I am seeking inspiration on that; I think that it will take so long in coming that I had better write to the hon. Gentleman.

Amendment agreed to.

Amendments made: No. 568, in

schedule 11, page 232, line 15, at end insert—

'( ) in sub-paragraph (ii) for ''31'' substitute ''30'','.

No. 513, in

schedule 11, page 232, line 20, at end insert—

'( ) After that paragraph insert ''; and

(c) Chapters 4 and 5 of Part 2 of the Pensions Act 2004 (fraud compensation and information gathering).''

( ) After sub-paragraph (5) insert—

''(6) Chapters 4 and 5 of Part 2 of the Pensions Act 2004 (as applied by sub-paragraph (1)) shall have effect with such modifications as the Secretary of State may prescribe by regulations.''.'—[Mr. Pond.]

Schedule 11, as amended, agreed to.

Clause 243 - Repeals and revocations

Malcolm Wicks (Labour, Croydon North)

The clause introduces schedule 12, which specifies the legislative provisions that the Bill will repeal in the case of Acts and revoke in the case of statutory instruments.

Question put and agreed to.

Clause 243 ordered to stand part of the Bill.

Schedule 12 - Repeals and revocations

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 101, in

schedule 12, page 232, line 29, leave out '1' and insert '2'.

The hon. Member for Eastbourne said that earlier in his career he took a comma all the way to the House of Lords. The purpose of the amendment is to leave out a '1' and insert a '2'.

Amendment agreed to.

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 543, in

schedule 12, page 233, line 16, in column 2 at end insert—

'Section 111.'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss the following:

Government amendments Nos. 544 and 545.

Government new clause 26—Voluntary contributions.

Malcolm Wicks (Labour, Croydon North)

This is a great moment. New clause 26 removes the requirement on schemes to provide facilities for members to pay voluntary contributions. Amendment Nos. 543, 544 and 545 are consequential technical amendments to the list of repeals in schedule 12.

Until April 2001, tax rules meant that an individual could not generally be a member of an occupational pension scheme and have a personal pension at the same time. Against that background, the Government introduced a rule in 1986 that occupational pension schemes must have a facility for members to make additional voluntary contributions to their occupational scheme. In 2001, individuals could contribute to an occupational pension scheme and a personal pension at the same time if their earnings were below £30,000. The forthcoming tax changes in the Finance Bill will remove that restriction.

In the light of that change, it is no longer necessary to require occupational pension schemes to offer AVC facilities to members. Anyone wanting to make additional pension savings will be able to do so in a personal or stakeholder pension of their choice. I am

sure that many occupational schemes will choose to continue their existing AVC arrangements as a matter of good practice, but with other options readily available it is no longer necessary to place a statutory requirement on every scheme to offer AVC facilities.

Steve Webb (Liberal Democrat, Northavon)

So, the fact that the existing AVC arrangements were facilitated by the employer was, in a sense, neither here nor there. They had nothing to do with the occupational pension scheme and were just the employer helping the worker to do a bit more saving. Therefore, getting rid of the requirement to allow additional voluntary saving does not deprive the worker of a right. I want to be clear that the AVC does not give them any rights in the occupational pension scheme that we are now denying them by removing the obligation on employers to offer that facility. Is that correct?

Malcolm Wicks (Labour, Croydon North)

In a regime in which someone could not have both a works pension and a personal pension, the Government thought it right to enable employees to increase their pension contribution through an AVC, separate from the main works pension, as it were. Now, slowly but surely, and very fundamentally in the Finance Bill, we are saying that people can have both. We do not think that we need to require the employer to offer that facility because other arrangements can be made, such as a stakeholder pension. We are removing a requirement of burden that is no longer necessary, given the current circumstance.

Steve Webb (Liberal Democrat, Northavon)

That is a helpful reply. Why were people prohibited from having a separate pension on top of their occupational pension while it was perfectly acceptable for them to have an AVC that had nothing to do with the works pension and just happened to be administered by the employer? As I do not understand that, I cannot understand why we can get rid of the requirement. Does the Minister understand what I am trying to convey?

Malcolm Wicks (Labour, Croydon North)

I understand the question clearly. My difficulty is that I do not understand the answer very clearly. On the one hand, the Treasury and the Inland Revenue make available generous provisions to encourage people to take out pensions, but on the other, they have always had concerns, and there have always been restrictions. The Finance Bill tries to adopt a more—pardon the expression—liberal approach to the issue, with the lifelong earnings limit and so on. There have always been those concerns.

I imagine that the original restraints—they were not set up on my watch, if I may say so; the hon. Member for Eastbourne may want to explain the reasoning behind them—probably had something to do with those tax concerns. That may have been thought easier to police or monitor—I do not know. I am not lost in the sands of time; my guess is that it was something to do with the fiscal arrangements.

The new clause is a straightforward consequence of the Finance Bill and the culmination of a series of deregulatory steps to make pension provision progressively more flexible.

Nigel Waterson (Conservative, Eastbourne)

Getting rid of section 111 of the 1993 Act is a necessary and sensible provision. We welcome it; it enables us to tick off yet another provision that people were surprised not to see in the Bill originally. Here it is, just in the nick of time.

I am also grateful for the Minister's confirmation that it will still be possible for AVCs to continue on a purely voluntary basis, as before, if that is what people want. I have no tribal recollection of why the arrangements were made in the first place. I presume that it was something to do with tax, and that is why the Finance Bill is leading on the issue, and we have to follow it up in this Bill. That is eminently sensible, and it is one example in this Bill—it is difficult to think of any other—of making life easier, less complicated, more flexible and less bureaucratic. It may be a straw in the wind, but I do not think so; almost everything else that we are doing seems to have the opposite effect.

However, let me not be churlish; I welcome the new clause. I could tell from the way in which he was speaking that the Minister, by his standards anyway, was getting quite frisky at the prospect of the end of the Committee stage, and I do not want to ruin that mood.

Steve Webb (Liberal Democrat, Northavon)

I hope that nobody will accuse me of being frisky at this juncture, but at the risk of depressing the Minister, I want to gnaw away a little further, because I am not yet sure that I understand—[Interruption.]—the groans from the Whips notwithstanding.

We are clearly getting rid of a worker's right to make additional voluntary contributions through the employer. The Minister's argument is that they do not need that right anymore, because the tax rules have changed. However, there must have been some reason why the powers that be decided that although one could not have a company pension and a personal pension, one could have basically the same thing—a company pension and AVCs, which were entirely separate from the work pension—and that that was somehow okay.

Clearly, tax was the underlying reason; we do not want people getting vast amounts of tax relief. I suspect that the reason might have been administrative; if everything is all under one employer's roof, one can spot what people are up to, but if a person runs off and buys a personal pension somewhere else, one cannot be sure that they are not getting pots and pots of tax relief. However, I am still not clear that there was no advantage at all—an advantage that we may now be losing—from doing things through the employer.

I have to smile, because I want to record my appreciation of the Department and its officials, who prepared admirable briefing notes for us on almost all these new clauses. A little bird tells me that we had no briefing note on this one because it was self-explanatory. There may be places in which it is self explanatory, but not in my back yard, as it were.

I feel uncomfortable about nodding the provisions through; I still do not really feel that I understand them. The Minister has been honest enough to suggest

that although he understands 99 per cent. of them, there is just that little niche that he does not. I feel a little uneasy nodding through a new Act of Parliament when no one in the Room—with perhaps one exception—understands all of it. That worries me a bit.

Malcolm Wicks (Labour, Croydon North)

I do not want to have a debate about the difference between fiscal and frisky; that would be dangerous, at my advanced age.

I must say to the hon. Gentleman—I think honesty is always a good tactic to use against him—that I do not fully understand the fiscal history, stretching back a few decades, on this point; the provisions almost certainly have to do with tax arrangements. He may have put his finger on it when he said that, although we are talking about AVCs, if everything is under one employer's roof, it is probably administratively easier to monitor and police. That might be the situation.

I am more concerned to explain the future: I am very clear about that. As we had removed the restriction and enabled people to have both a personal pension scheme and an occupational pension scheme, it no longer seemed sensible to impose the obligation—some might call it a burden—on all employers.

In future there will be a regime—encouraged, of course, by the tax changes with the lifetime limit of £1.5 million—whereby those fortunate enough to be members of occupational pension schemes may be offered AVCs by their employers. I imagine that many employers who currently offer them will continue to do so, but the employee has the right to put money into a personal pension scheme. I am very clear about the future, even if I am not chapter-and-verse, footnote and subsection (1), (2) and (3) clear about the past 20 years.

Steve Webb (Liberal Democrat, Northavon)

The Minister would put my mind at rest if he put on record an assurance that no worker will, through the new clause, lose a right that would have any value to them once the new Finance Bill is in force.

Malcolm Wicks (Labour, Croydon North)

Yes, I can do that, because a greater range of opportunities will now be open to that worker. The provisions are about recognising the logic of having more choice. We—not only the regulator but the protection fund, in the case of final salary schemes—are imposing new obligations on schemes, but there does not have to be an obligation on employers to remove choice. The new clause is about deregulating, as, in a sense, we bring in new regulatory powers. It is part of that balance. I hope that that reassures the hon. Gentleman.

Amendment agreed to.

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 569, in

schedule 12, page 233, line 18, at end insert—

'In section 131(b), the words ''payable at any earlier time or''.'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss the following:

Government new clause 33—Increase in age at which short service benefit must be payable.

Malcolm Wicks (Labour, Croydon North)

The amendment and the new clause amend certain provisions in sections 71 and 72 of the Pension Schemes Act 1993 in respect of short service benefits. Section 71 of that Act provides that where a member of an occupational pension scheme has become a deferred member, but has at least two years' qualifying service in that scheme, or has transferred rights under a personal pension, his rights must be preserved as short service benefits.

Section 71 of the 1993 Act provided that where a scheme's normal pension age is less than 60, short service benefits more commonly referred to as deferred pension are payable no later than age 60. Section 71 applies to a limited number of schemes in which retirement before the age of 60 is expected because of the nature of the work; schemes for firefighters and police officers are the obvious example.

We made the proposal because when a person leaves such employment before normal pension age—say, if someone was a firefighter or police officer for just a few years early on in their career—we believe that the link with the normal pension age and employment is broken, so there is no reason why that pension should need to be paid early. The purpose of the new clause is to amend section 71(3) of the prior Act to change the latest age from which a deferred pension is payable in schemes with an early normal pension age. The age is increased to 65, which is in line with the general public policy of extending working life and raising the public service pension age in respect of future service. The new clause also adds a new subsection to section 72 to reflect the amendment to section 71(3) in respect of normal pension age. I emphasise the word ''future,'' because we are talking about future rights; the change does not touch past rights. I hope that hon. Members will accept the amendment.

Nigel Waterson (Conservative, Eastbourne)

I appreciate, as the Minister pointed out, that the new clause and the amendment are to do with deferred pensions, so we are dealing with a fairly narrow issue. However, it is important to look at that issue in the broader context, particularly the public policy context that the Minister touched on.

We are talking about people in public service jobs, such as firefighters, police and others, who are used to a system where the norm is to retire at 60 or even earlier. The changes will take away something from them that they might otherwise expect to have. The Minister may present the changes as a tidying-up exercise—in the same way as the EU constitution, on a different level, has been presented—but that is clearly not the case if we put the changes in context. The briefing note is very up front and ''in yer face'' about this. It says that there is no reason to provide for a pension before what is the normal pension age for the public services generally. I will not be unique in having received several letters from constituents about the Government's plans for local government pensions, including those for policemen, firefighters and so on.

The proposals from the Deputy Prime Minister are to make the retirement age 65 for all by phasing out the ability to retire at 60 with 25 years service, to increase the earliest age at which benefits may be paid, other than on the grounds of ill health, from 50 to 55,

and to introduce measures to provide for flexible retirement. It has been said—I think this is what the Minister was saying—that whatever changes are made will not affect pension benefits already earned from past service. However, as I understand the new clause, that is precisely what is being done, because people will have to wait longer to take that deferred pension.

One should consider the issue in the context of what the Minister referred to as the policy aim. The briefing note says that rights accrued up to the coming into force of the new clause are payable from an age no later than age 60, but rights accrued from the coming into force of the new clause will be payable from age no later than 65. Therefore, any rights accrued up to the time that the new clause comes into effect will be protected, but from then on things will be different for pensioners who have deferred.

It is important to probe the Government on what their policy really is. They have clearly taken the view across the board that people should be working longer before drawing their pensions. There is a significant feeling, certainly among my constituents, that that is unfair because the goalposts are being moved, and the new clause is just one aspect of moving them. I appreciate that the broad policy issue is for a different Department—the Office of the Deputy Prime Minister, and we would not want to cross such a redoubtable figure—but there is already a lot of aggravation from unions and individuals about changes to local government pension schemes. The new clause is just one aspect of that.

Since the Minister touched on the public policy view that people should work longer and be older before they draw their pensions, it is important that he sets out the thinking behind that. Is it simply a matter of saving money? Is it thought to be good for them? Does it tie in with a possible agenda for raising the retirement age to 70 or even higher? Those are all interesting issues that arise out of the provision, which, I accept, deals with the narrow question of the deferred pensioners.

Steve Webb (Liberal Democrat, Northavon)

Again, I am trying to get my head round a new clause—this time it is new clause 33. I think the Minister implied that short service could mean 40 years. It means just short of being a current member of a scheme. In that context, short refers to any accrued pension rights where one has left the scheme before normal pension age. Will the Minister clarify whether we are talking in some cases about someone's practically complete pension rights—provided that they have left the scheme before normal pension age? I am not sure whether piddling is parliamentary language, but the amount of pension would not be negligible. We are not talking about someone's little bit of pension; we could be talking about someone's almost total pension.

The hon. Member for Eastbourne mentioned ill health grounds. Schemes may have different provisions for early retirement because of ill health. How will those interact with new clause 33? If someone has an earlier normal pension age for early

retirement, will they still have to wait until they are 65, for example, before they draw the ill health pension?

I am also slightly hazy—perhaps because it is after lunch—about whether the provision affects accrued rights. The excerpts from the briefing note about existing and future rights that the hon. Member for Eastbourne quoted are in the context of exceptional schemes that have different rules for early leavers and for people who carry on until normal pension age. The note therefore implies that the excerpts he read out would not normally apply.

From the enactment of the legislation, will we end up saying to someone who has left a scheme, ''We have passed the Pensions Act so the money that you have built up and thought you would get at 60, you will actually get at 65''? Or are we saying, ''No, you thought that you would get it at 60, so you can have it at 60, but if you leave any scheme after the coming into force of the Act, then you will have to wait''? Will they receive the amount that had accrued up to the legislation's enactment? If one were to leave the scheme a year later, would one have to wait for the amount accrued up to enactment or just the amount accrued after enactment?

You can see my confusion, Mr. Griffiths. I am not sure which rule applies in which circumstances. If one has to carve up parts of pensions into parts that accrued before and after a date, and one has to draw one part at one age and another at another age, we will end up in the mire of complexity that so many of us wanted to avoid.

The other substantive issue is the Government's understandable drive to encourage everyone to work longer. The new clause would make it more difficult for people to draw pensions in their late 50s and early 60s. The Secretary of State borrowed what I always consider to be my phrase—perhaps I got it from someone else—about the cliff edge of retirement. If we are to regard retirement as a process rather than an event, does that process have to begin at 65?

If we want people to phase themselves out of the labour market much more slowly and less dramatically, why not think of a decade of retirement that might start at 60 and end at 70, for example, in which people could draw pensions that, if taken at 61, by definition would be more modest? They could combine it with part-time work throughout their 60s. Would that not be in keeping with the spirit of the Government's proposals? They would not suddenly stop working at 65. The new clause stops them from doing that, however. It says, ''You must work full-pelt until 65 because you cannot have your pension, then at 65 you get your hefty pension because you have had to wait, at which point you do not have to work at all.'' That does not seem to go with the grain of the Government's rhetoric about phased and staged retirement, and process not event.

One can understand that the Government want everyone to take their pensions later, but how consistent is that with the wider goal of this policy? This new clause has also been introduced very late in

the day, and it might have some quite serious practical implications. Does the Minister know how many people it will affect? If it involves policemen and firefighters, that would represent a lot of people, although I am confused about whether it covers ex-policemen who have not yet reached pension age.

Are we, to borrow the phrase used by the hon. Member for Eastbourne, in footballers and ballet dancers territory? Almost by definition, footballers will leave the employment of their sponsoring employer before normal pension age. Should not people who have a burst when they can do their job and then a long period when they cannot, be able to smooth their incomes much more, rather than having a huge amount of money at one period in their life, followed by a barren period, and then having—under the new clause—to wait even longer before they can get the deferred pay that is their pension?

The new clause raises many issues. It is disturbing that it has come as late in the proceedings as it has. We need much more discussion than we have had so far. I hope—I think that this is important—that the Minister will take us through the issue of accrued rights to the date that the Act comes into force and of people who leave schemes subsequent to that date. Will their whole pension be denied them until they are 65 or only the bit that has accrued? On all of those things, we need to have a much clearer account.

Malcolm Wicks (Labour, Croydon North)

We have had a useful debate. In a way, there are two kinds of issues. The one that I will address second is the relevant one. The other is the broader context of working life and sensible pension age policy. I must not get too far into that wider debate, because there have been and will be other occasions for it. The Government's general position is that we need to create a society and an economy where people have opportunities to work longer than some are at present able to do. There is a range of issues about how we achieve that that are not relevant to the Bill.

We think that the idea that many civil servants and public servants should get their occupational pension at the age of 60 is outmoded. One should look at the history books to see when it might have come in, but it was in a much earlier era when life expectancy was different from what it is in the 21st century. We think it reasonable to say that, in the future, the notion that one should work up to the age of 65 in the public services should not be regarded as extraordinary in a society where people would, at that stage, have a life expectancy of about 20 years. That will increase as the century progresses. That will have to be done on a phased basis, because it is a matter for discussion with different public services and it will be phased in with regard to different cohorts.

I hope that hon. Members will not think that that is an extraordinary notion. Indeed, given that many in the private sector are not able to draw their occupational pension until 65, there is an issue about public versus private if we are to maintain public confidence in our public services.

Although the hon. Member for Eastbourne says that we expect people to work longer, I do not think

that we are in a society and an economy where people will be working for more years than their parents or grandparents did. For perfectly good reasons, such as school-leaving age, further education and higher education, their entry into the labour market is altogether different from that experienced by their grandparents. Many people will not properly enter the labour market with their first major job until they are 20 years or a quarter of a century into their life. One has to be careful before jumping to the conclusion that people will be working longer. That is a subject for another debate, but it has been raised by the hon. Members for Eastbourne and for Northavon and I thought that I should address it briefly.

On the specifics of the amendments, we are talking about a much narrower, albeit important, subject. We are talking about when someone works in the public services—we have referred to firefighting and crime fighting—but leaves before the usual retirement age, presumably to pursue another career. If people are sick, different issues are involved, but if they leave to get another job, does it make sense for us to say of future rights that will be accrued—not past rights—''No, you should receive your pension at 55'' or at whatever age applies to the scheme? It is much more sensible to say, ''No, you will get that part of your pension when you are 65.''

The hon. Member for Northavon has properly raised the issue again with me. The rights of members are fully protected under current legislation. The amendment would not alter the level of protection in respect of raising the public service pension age; it will be in respect of future service only. The rights of a person who was a firefighter or a police officer earlier in his career will be protected. Obviously, we must be careful about making changes and thinking through the implications. The debate has been useful, but the provision is not that revolutionary and, in terms of future rights, it is a matter of common sense about how we have regard to our emerging demography in the 21st century and how we adjust public service pension rights to that new demography.

Steve Webb (Liberal Democrat, Northavon)

I am not sure what I was doing that was slowing down the Minister. I want to know about the transition. The new clauses applies straight away to future service. Let me get my head around the matter: I could be aged 55, and anticipate working for a further five years and drawing a pension at 60. The coming into force of the Bill means that I cannot draw the pension in respect of those final five years at 60, but only at the age of 65. How does a person divide the service accrued to date, with the service accrued in those final five years in a final salary scheme, when those final five years are the time in which his salary could increase quite a lot and affect the service that he has earned in his entire life? In one sense, that is a technical question, but we all know that those last few years of service could add a heck of a lot to a person's pension rights. Under the Bill, a person could find, with very little notice, that he could not draw a big slug of his pension rights for a further five years. It is all very well saying that the matter relates to future service, but a fairly short-term future service might

have a big impact on a person's pension. Are we giving people fair warning of such matters?

Malcolm Wicks (Labour, Croydon North)

I understand the question, but as the matter has excited more interest on a Thursday afternoon than I had anticipated, it would be helpful if I write to the hon. Gentleman and other hon. Members about the provision and explain where we are generally going in terms of public service pension ages. I shall try to address the specifics of how it would affect individuals in different circumstances. The hon. Gentleman asked a perfectly proper question and that is how I wish to deal with it.

Steve Webb (Liberal Democrat, Northavon)

I simply wish to advise you, Mr. Griffiths, that I want us to have a Division on the matter. I am not being churlish because I look forward to the Minister's explanation. However, until we receive it we are being asked to accept something about which the Committee has not received a full or adequate explanation. Such a provision could have a big impact on hundreds of thousands of constituents. We cannot nod it through in the expectation that a letter will satisfy us.

Question put, That the amendment be made:—

The Committee divided: Ayes 11, Noes 2.

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 403, in

schedule 12, page 234, line 27, after '21(3)''' insert 'and ''78, 79, 80(4)'''.

This is a minor, technical amendment that relates to the dissolution of the Pensions Compensation Board.

Amendment agreed to.

Amendments made: No. 578, in

schedule 12, page 234, line 47, in column 2 at end insert—

'Section 47(1), (2) and (4).'.

No. 547, in

schedule 12, page 234, line 47, in column 2 at end insert—

'Section 54.'.

No. 548, in

schedule 12, page 234, line 53, at end insert—

'The repeals in sections 148, 149 and 151 of the Pension Schemes Act 1993 (c.48) relate to those provisions as amended by section 54 of the of the Child Support, Pensions and Social Security Act 2000 (c.19) to the extent that those amendments have been brought into force for the purpose of making regulations and rules.'.—[Malcolm Wicks.]

Schedule 12, as amended, agreed to.

Clause 244 - Pre-consolidation amendments

Malcolm Wicks (Labour, Croydon North)

The clause allows the Secretary of State to modify provisions of the pensions legislation for the purposes of consolidation of that legislation; that is set out in subsection (1). The Green Paper made clear our commitment to consolidate the pensions legislation as soon as practicable. It is our intention that, after the Bill is enacted, the Law Commission should prepare a consolidation of the pensions legislation, consisting principally of the primary legislation mentioned in subsection (1). Where the draftsmen—or women—find provisions of that legislation that require amendment in order to assist the process of consolidation, we shall be able to give effect to those changes by order for that limited purpose.

Question put and agreed to.

Clause 244 ordered to stand part of the Bill.

Clause 245 - Commencement

Steve Webb (Liberal Democrat, Northavon)

Subsection (1) states:

''Subject to subsections (2) to (4), the provisions of this Act come into force in accordance with''

when the Secretary of State says so. I have looked into this only briefly, but it appears to me that the introduction of the pension protection fund is not covered in subsections (2) to (4), and that therefore the Secretary of State will have the power to decide when it will be introduced.

The word on the street is that that might not happen in April 2005 because the Government are so far behind that the work has hardly begun. That is not merely a debating point; it is an important and substantive one. My party voted for this Bill, and it wants pension protection to be introduced, so it would be regrettable if the Department's delays meant that it came into force late. My question on clause 245(1) is this: do the Government still intend that the Secretary of State will commence by order the part of the Bill relating to the PPF in April 2005, or is there any danger that that timetable might not be adhered to?

Nigel Waterson (Conservative, Eastbourne)

I was not proposing to speak on this clause, but I am alarmed by the word on the hon. Gentleman's street, although it may be a rather different street from those that the rest of us are familiar with.

Malcolm Wicks (Labour, Croydon North)

Quality Street.

Chris Pond (Labour, Gravesham)

Acacia avenue.

Win Griffiths (Labour, Bridgend)

''Sesame Street'', probably.

Nigel Waterson (Conservative, Eastbourne)

''Sesame Street'', Quality Street; keep them coming.

I had not heard that word on the street. However, it would not surprise members of my party because not only do we endorse the Government's description of this timetable as challenging, but we think it has become more so. That is why I have made our position clear; we must first get the PPF right. We are putting things into this legislation that will give the PPF structural problems that may prove to be extremely dangerous in its early stages; I am thinking of the question of the levy and how that is calculated, and the risk basis, and so on.

In an earlier debate, I made detailed proposals as to how the interim situation involving the 60,000 people—and any others who might be unfortunate enough to face the same problem as them—could still be addressed without rushing into ill judged legislation on a self-imposed political timetable. Ministers have made urbane arguments and somehow they have persuaded people. Even the BBC website is saying that there will be a guarantee of 100 per cent. of people's pensions, or 90 per cent. if they are still working. We are writing to the BBC to get it to correct that because it is simply untrue, as we all know.

Steve Webb (Liberal Democrat, Northavon)

Given the hon. Gentleman's penchant for technology, may I suggest that he e-mails the BBC website rather than writes to it?

Nigel Waterson (Conservative, Eastbourne)

My people will speak to their people and something will get sorted out by some method of communication, because people are in danger of being conned over this guarantee.

The Government are still using the word ''guarantee.'' Things are happening at two different levels; there is a political level at which the Government are saying, ''We are producing this guarantee, and it will be a total safety net that solves everyone's problems,'' and then there is the reality as stated in the Bill.

If there is any suggestion that there will be a delay in implementing all of this by next spring, we should be the first to hear of it. However, given this Government's track record, we may be the last to hear.

The Minister should not feel any macho need to adhere to what may become an ever more difficult and less practical timetable. He should not be persuaded by the hon. Member for Northavon to do it by next spring, willy-nilly, because there are still some major problems to be addressed. I did not intend to speak on the clause, but I do so because I am so concerned by what the hon. Member for Northavon said. Because he is a Liberal Democrat spokesman, what he says must be true and based on hard fact and evidence.

I should be grateful for an explanation from the Minister.

Malcolm Wicks (Labour, Croydon North)

I know that it is a beautiful sunny day, but the silly season seems to have come early. The hon. Member for Northavon is clearly at least in the courteous business of trying out his draft weekend press releases with the Committee. I can see it now in that new Conservative newspaper, The Express: ''Webb warns of delays to PPF.'' What a load of nonsense we have heard today from both the hon. Member for Northavon and the hon. Member for Eastbourne. I have never heard such rubbish in all my life, apart from in the earlier speeches they made.

Nigel Waterson (Conservative, Eastbourne)

Is that a no, then?

Malcolm Wicks (Labour, Croydon North)

The fact of the matter is that it would be wrong and, indeed, lacking in courtesy to say before the Bill has gone through Parliament—it has not gone to the upper House and we have not yet had Third Reading—that the protection fund and the regulator will definitely be up and running in April, 100 per cent., although that is our firm intention. We are moving ahead successfully in that direction. I am convinced that it will happen then, although to say that with 100 per cent. certainty as the Bill passes through the House would be a discourtesy. However, that is our firm intention.

We know about all the pressures, including most of those in Parliament, although I never know what are the pressures from the Conservative party—it depends what draft employers' press release they are reading from that day. All the pressures from Committee members and other Members of the House have been about doing things as soon as possible to give people the proper protection and end the scandal. It is

irresponsible for anyone to start a hare running and say that things could be delayed until after April.

The hon. Member for Northavon talked about the word on the street. I do not want to be too broad on this matter, but as part of our social policy we are worried about the dangers facing young people on street corners—hence our emphasis on decent schooling, attacking truancy, drug protection and so on. Young people can hear silly, dangerous things that can get them into trouble on street corners. I urge the hon. Gentleman to find a decent street to walk down and have proper, responsible conversations.

The protection fund will be up and running in April 2005. It will be a major step forward in our social reforms for this country.

Question put and agreed to.

Clause 245 ordered to stand part of the Bill.

Clause 246 - Extent

Malcolm Wicks (Labour, Croydon North)

I beg to move amendment No. 539, in

clause 246, page 162, line 46, at beginning insert

'Subject to the following provisions,'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss Government amendment No. 541.

Malcolm Wicks (Labour, Croydon North)

In this part of our discussion we are dealing, in a rather technical way, with the implications for Scotland and Northern Ireland. I shall not spend too much time on these amendments, because early in our discussions we had some debate about the application of the provisions to the United Kingdom. We made it clear that the major features of the legislation—the PPF and the regulator—would apply UK-wide. These technical amendments bring that into effect. I am happy to answer any questions, but people might, for clarity, want to refer to some of our earlier debates.

Amendment agreed to.

Amendments made: No. 509, in

clause 246, page 163, line 10, after '83' insert ', 84(1) and (3)'.

No. 563, in

clause 246, page 163, line 10, after '93' insert

', 123(2)(a), (3), (5) and (6)'.

No. 510, in

clause 246, page 163, line 10, after '93' insert '135, 150'.

No. 533, in

clause 246, page 163, line 10, after '170', insert

', [Deputy PPF Ombudsmen]'

.

No. 511, in

clause 246, page 163, line 10, leave out second 'and' and insert—

'( ) section 85 so far as that provision has effect in relation to functions of the Board conferred by any provision of, or made under, this Act which extends to Northern Ireland, and'.

No. 398, in

clause 246, page 163, line 11, at end insert '(other than paragraph 17A)'.

No. 564, in

clause 246, page 163, line 11, at end insert

', and

( ) Schedule 6 (other than paragraph 7),'.

No. 540, in

clause 246, page 163, line 15, leave out 'section 211(2)(b)' and insert

'sections [The Pensions Ombudsman and Deputy Pensions Ombudsmen] and 211(2)(b)'.

No. 541, in

clause 246, page 163, line 22, at end insert—

'( ) Section 80 (legal assistance scheme) does not extend to Scotland.'.—[Malcolm Wicks.]

Clause 246, as amended, ordered to stand part of the Bill.

Clause 247 - Northern Ireland

Clause 248 - Short title

Malcolm Wicks (Labour, Croydon North)

We have reached that historic moment in our deliberations when we need to discuss the short title of the Bill. Hon. Members may feel that the full panoply of the Government's imagination is not best displayed by the conclusion we have come up with. We obviously had regard to the nature of the legislation and the precedents and conventions as to how it should be referred to in future. We have also had regard to the subject matter of the Bill, using our best arts of paraphrase and précis. Obviously, we have looked at our calendars and we have some idea of the appropriate—I hope I have got my Latin right—anno domini. Therefore, after much deliberation and full consultation we feel that we should have as a short title, not in regulation but on the face of the Bill, the Pensions Act 2004.

Nigel Waterson (Conservative, Eastbourne)

I have some notes from the Library on the clause, and the Engineering Employers Federation also had some comments, but I thought, ''sod it.'' [Interruption.] We are delighted to have reached this historic moment, but it would not be right for me to finish this part of our deliberations without making the point that this 2004 Pensions Bill is a different animal—it is almost unrecognisable in some respects—from the one with which we started. It is still a work in progress, and I dare say that we will all get there in the end. Hopefully, if we retain our sense of humour, and if the Minister acquires one—[Hon. Members: ''Withdraw!'']—we will all enjoy the rest of the Committee stage.

Question put and agreed to.

Clause 248 ordered to stand part of the Bill.

Further consideration adjourned.—[Margaret Moran.]

Adjourned accordingly at twenty-four minutes to Four o'clock till Tuesday 27 April at half-past Nine o'clock.