Committee stage in the Lords
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The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton)Labour- Quote
- moved Amendment No. 130DL:
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Lord SkelmersdaleConservative- Quote
- I have a very quick question for the noble Lord about the prognosis for terminal illness, which I assume to be six months. Which amendment refers to “six months”?
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- Lord McKenzie of LutonLabour
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- If the noble Lord will give me a moment, I shall try to identify which one it is.
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Lord Oakeshott of Seagrove BayNon-affiliated- Quote
- Perhaps while the Minister is looking, he will accept our support for the amendments.
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- Lord McKenzie of LutonLabour
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- I can deal with that point: I am most grateful to the noble Lord for his support. Any minute now, I shall be able to identify which amendment refers to six months. It is Amendment No. 130DR, which begins: “Page 75, line 13, at end insert— “Terminal illness lump sum: eligibility”, and inserts a new paragraph 11A to Schedule 4. Sub-paragraph (3) of that paragraph reads: “For the purposes of this Chapter a person is ‘terminally ill’ at any time if … the person suffers from a progressive disease and the person’s death in consequence of that disease can reasonably be expected within 6 months”. I think that this test is used not infrequently in relation to DWP benefits.
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- Lord SkelmersdaleConservative
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- Indeed it is, and I am extremely grateful. On Question, amendment agreed to.
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- Lord McKenzie of LutonLabour
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- moved Amendments Nos. 130DM to 130DR:
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Lord TunnicliffeLabour- Quote
- moved Amendment No. 130DS:
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- Lord SkelmersdaleConservative
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- It seems to me that Amendment No. 130EM is the substantive amendment in the group. It is a new clause allowing the PPF to recover charges in respect of pension sharing. The whole point of the PPF is to administer failed direct benefit pension schemes in as close a way as possible to those schemes it has taken over. For several years it has made two charges on existing schemes—in other words, before the takeover: one charge is for its annual running costs and the other, usually a much high cost, is based on the likelihood of it taking over a particular scheme and is on a rising scale depending on the scheme’s deficit level. A high deficit incurs the maximum and a scheme which is 140 per cent funded incurs none at all. In other words, if the PPF is running properly, there should be enough money for the PPF not to need any extra money in regard to pension sharing, which one hopes will be a pretty rare event anyway. When does the Minister believe that the provision in Amendment No. 130EM will be needed? I note that the original concept is to be introduced by regulations requiring parliamentary approval. In other words, the new clause is an enabling power. Does the Minister expect to lay regulations early after Royal Assent or will he wait until the burden on the PPF is such that this money-raising power is needed because the annual running charge is no longer sufficient? Is it really necessary to have this extra provision? Why cannot the annual running charge be increased without this new provision?
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- Lord TunnicliffeLabour
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- I am sorry that I cannot give a blow-by-blow retort to that. It seems to me entirely reasonable that all pensions, be they compensations or orders in transit, should be handled in the same way. In pension sharing, both parties contribute to the cost. In the situation that we are trying to create here, both parties contribute to the cost. In the transition to which government Amendment No. 130EM refers, both parties contribute to the cost. That has nothing to do with the general funding of the PPF but has everything to do with handling things as consistently as possible, basically because we want parties to divorce, not levy payers in general, to pay. That is roughly what I was trying to say.
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- Lord SkelmersdaleConservative
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- We have had this before—not on the previous day in Committee but, I think, the day before—when the noble Lord, Lord McKenzie, insisted on an amendment, which I queried, on the basis that it did not really matter if we got it wrong now because it could all be changed by regulation. I do not have the chapter and verse of it, but when the noble Lord reviews Hansard over the summer, he will see exactly what I am talking about. We are in the same situation again. Although I was not particularly annoyed then, I am becoming extremely annoyed now, and unless the noble Lord, Lord Tunnicliffe, can give a better answer, I shall have to ask the opinion of the Committee.
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- Lord TunnicliffeLabour
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- I am sorry, but the amendment allows the PPF to recover the costs of pension sharing that have been vested on it because of a transition. That is exactly the same as pension-sharing costs that are now covered in any other divorce. It is exactly what the generality of the clause proposes for compensation sharing when the party concerned is in the PPF. The clause enables the scheme to make sensible charges in a transition. The fundamental concept of all sensible regulations is that parties who create a cost should properly compensate for it. It should not be pushed off into the general revenue of the scheme. The amendment matters, as I have tried to make clear. It simply enables the PPF to recover costs from the parties involved. It is so simple and straightforward that I find it difficult to see how I can say anything more persuasive than that this is how all pension sharing works. It is how the PPF will work, and it is entirely reasonable that charges incurred by someone who is caught in transition will work in the same way.
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- Lord Oakeshott of Seagrove BayNon-affiliated
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- While the noble Lord, Lord Skelmersdale, considers his position, the Minister might like to know that his answer is good enough for us on these Benches.
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- Lord SkelmersdaleConservative
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- I have allowed one Minister to get off the hook on this occasion, and I am now going to let another Minister get off the hook. However, this is no way to legislate, and if it happens again I will have not the slightest hesitation in asking for the Committee’s opinion. On Question, amendment agreed to. Clause 100, as amended, agreed to. Clauses 101 to 103 agreed to. Schedule 5 [Pension compensation on divorce etc: England and Wales]:
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- Lord TunnicliffeLabour
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- moved Amendments Nos. 130DT to 130DZ:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130E:
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- Lord McKenzie of LutonLabour
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- moved Amendments Nos. 130EA to 130EG:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130EH:
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- Lord McKenzie of LutonLabour
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- moved Amendments Nos. 130EJ and 130EK:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130EL:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130EM:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130EN:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130EP:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130EQ:
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- Lord SkelmersdaleConservative
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- As the Minister said, my Amendment No. 130EU has been put very naturally into this group, as indeed has Amendment No. 130ET. Having been an occasional film goer for many years, I am amused that part of this group is indeed labelled “ET”. I do not think there is anything to say about “fingertip touching” on these amendments, but I should explain why I tabled Amendment No. 130EU, which, as the noble Lord said, is principally about Desmond and Sons, although there are other schemes involved. I did it, as I do from time to time in your Lordships’ House, to keep the Government up to the mark on what they have promised, whether here or in another place. I am delighted that they have delivered and I have no intention of moving Amendment No. 130EU.
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- Lord Oakeshott of Seagrove BayNon-affiliated
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- I thank the Government on behalf of the Desmond and Sons pension scheme for what they have done. Sean O’Dwyer from the pensioners’ committee has written me very moving letters through my noble friend Lord Alderdice pointing out that pensioners have had their pensions cut on average by almost a half, from £470 a month to £250. Many of them are in their 70s and 80s. What is proposed is excellent and shows that Parliament and Government can respond to hard cases of this sort. I thank the noble Lord for that.
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- Lord McKenzie of LutonLabour
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- I thank the noble Lords, Lord Skelmersdale and Lord Oakeshott, for their kind support for the amendments. For the record, we referred to Desmond and Sons, which has the most members—346—but there are two other schemes of which we are aware that will be helped by these provisions. One is Stanley’s Press with 37 members and the other is Pinneys of Luton with 19 members. On Question, amendment agreed to.
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- Lord McKenzie of LutonLabour
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- moved Amendments Nos. 130ER and 130ES:
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130ET:
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- Lord SkelmersdaleConservative
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- moved Amendment No. 130EVA:
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- Lord McKenzie of LutonLabour
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- The amendment would introduce a power to make regulations so that any financial assistance scheme payments in arrears could be attributed to a tax year other than the one in which the payments were received. It would also allow a claim to be made for repayment of any income tax overpaid in respect of any arrears. The amendment is not necessary, but it may be helpful if I outline how existing tax law works in respect of FAS payments For income tax purposes, FAS payments are treated as pension income and, as such, are subject to existing income tax rules. The rules state that payments for a past period require income tax to be deducted initially through the PAYE system in the year in which they are received. However, the payments can subsequently be allocated to the years to which they relate and the tax adjusted accordingly, depending on the individual’s personal circumstances in those years. In other words, people can already obtain repayments from HMRC under existing rules. In practice, that means that, when FAS payments are made for a past period, the FAS operational unit will operate the existing tax code issued by HMRC. For the majority of members, this will be the basic rate tax of 20 per cent. For FAS recipients who think that they have paid too much tax, HMRC will, at their request, attribute their payment to the relevant tax years and reassess their tax. I hope that the Committee will see that this means that overall no one need pay more tax than they would have if the payments had been made in the years to which they relate. The Government have responded promptly and positively to concerns raised by Dr Ros Altmann of the Pensions Action Group in relation to the tax position of members who receive payments for a past period. We appreciate that tax matters can be complex, and, in liaison with HMRC and the Pensions Action Group, we have produced supporting information for FAS members who receive payments for a past period. In addition, we have arranged for a dedicated telephone helpline to be provided by the Pensions Advisory Service that will support members in understanding the position, given their other income and personal circumstances. I hope that it is clear that we understand the intention behind the amendment and that I have reassured the noble Lord that the clause is unnecessary. With regard to where we are on recalculating FAS assistance, since regulations came into force in early June the FAS operational unit has been recalculating assessments, now that assistance is payable at the 90 per cent level from normal retirement age. One thousand, two hundred and fifty-seven payments at the new rate were made in the June payroll, and we expect to have completed the reassessments by the end of August 2008. I hope that that is of assistance to the noble Lord.
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- Lord SkelmersdaleConservative
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- I am grateful to the Minister, and I am sure that the Pensions Action Group will be partially grateful. As the Minister has explained, if the recipients should have been paid at the time when the 10 per cent tax rate was operating, they will have to claim—that claim, under the normal government rules, will have to be validated—before they get a tax rebate. It is a rather strange way of operating, but I am afraid that from the Government’s point of view I must agree with the Minister that this is a proper administrative method to achieve the objective that he and I have sought to accomplish, so I am not going to press the amendment in any way.
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- Lord McKenzie of LutonLabour
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- It might be helpful if I explained that the individuals who wish to relate back part of the money that they have been paid can get a letter from the FAS operational unit that will set out the years to which it relates. That system is in place to facilitate that. I also stress that it is not necessarily in everyone’s interests to relate back the payment that they receive to an earlier year.
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- Lord SkelmersdaleConservative
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- That must be true, but in his additional remarks the Minister has just said that the individuals “can” receive a letter from the FAS. “Will they?” is the question that I would like to ask before I decide what to do with the amendment.
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- Lord McKenzie of LutonLabour
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- The answer is yes, they will. I see nods from the Box in confirmation of what I have said. The system has been set up to facilitate that.
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- Lord SkelmersdaleConservative
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- I am relieved by that last answer, and I am sure that the Pensions Action Group will be too. I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
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- Lord SkelmersdaleConservative
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- moved Amendment No. 130EV:
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- Lord SkelmersdaleConservative
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- I cannot be more emphatic than that—even me, with my extensive use of the English language. It is a probing amendment, not least because I do not believe that the point I am hoping to raise is actually decided by primary legislation. The amendment is also highly technical. However, I should be interested to know why the Government have decided to proceed as they have. My concern is that they are not considering post-1997 escalation in the factors used to calculate the annuity derived from tax-free commutations or transfers. Pensioners who took the cash are therefore receiving less than 90 per cent of expected pension and are disadvantaged compared with those who did not commute. Surely this is an arbitrary penalty for a decision made at a time when the pensioner could have no way of knowing the effect. Why are the Government not using calculations that are of general use in the marketplace and would rule out this particular anomaly? I beg to move.
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- Lord McKenzie of LutonLabour
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- The financial assistance scheme has to use annuity rates in a number of different circumstances where the amount of annuity which the trustees could have purchased for an individual at the end of wind-up is not known. For instance, where a member has taken part of their pension as a lump sum while the scheme is still winding up, annuity factors are used to produce a notional annuity which can then be used to calculate the amount of top-up payable to that member by the FAS. The annuity factors used by the FAS can affect the amount of assistance paid. Because of this, we recognise that it is important that those factors are generally in line with market conditions. While the amendment would not create a definite obligation on the Government to put these annuity factors into regulations, it would perhaps give an indication that Parliament expected the annuity factors to be set out in regulations rather than elsewhere. If we did so, Parliament would then have to debate any future changes to those factors. I never underestimate the knowledge and intelligence of Members of this House in particular, and of those in the other place, but I question whether our time is best spent considering pages and pages of annuity factors. Members of the Committee will remember that the Government have recently completed a review of the annuity factors which have been in use since 2005. The Government Actuary’s Department produced draft factors based on work by PricewaterhouseCoopers in relation to the financial model for the FAS that we commissioned from the Government Actuary’s Department in 2007. These draft factors generally increased the amount of assistance paid. We consulted on them, and the factors were put into place only once we had considered the responses to that consultation. Furthermore, laying regulations each time the factors need changing would slow down the process of reflecting these changes in FAS member payments. It is partly for this reason that, generally, such technical information is not put into legislation. For example, the various actuarial factors used by the Pension Protection Fund for similar purposes are also not in regulations. I do not think that this amendment would help people in any way, but nor would it really hinder, apart from perhaps delaying future changes which may be beneficial to members. The noble Lord touched on indexation in relation to annuity factors. The factors produce a notional annuity that takes no account of indexation. It is acknowledged that this produces a higher notional amount, and so lower top-up assistance, than if indexation were built in. A deliberate decision was made that this was the most appropriate approach, since annuities that are bought for deferred members of FAS qualifying schemes during wind-up would not generally contain indexation. However, we will continue to consider this point in the context of delivering the complete package of FAS reforms, when FAS payments will be indexed in respect of assistance derived from post-April 1997 service. I hope that that deals with the noble Lord’s queries and that he will feel able to withdraw the amendment.
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- Lord SkelmersdaleConservative
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- There will come a time when I will have to read the Minister’s words with great care and with a cold, wet towel wrapped around my tiny brain. However, I am glad to hear that the Government are continuing to look at indexation within the FAS. It is clear that it is right that they should do so and that they should not yet have come to a final decision. On that basis, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.
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- Lord McKenzie of LutonLabour
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- moved Amendment No. 130EW:
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Baroness NoakesConservative- Quote
- moved, as an amendment to Amendment No. 130EW, Amendment No. 130EX:
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Lord LucasConservative- Quote
- As my noble friend has said, Amendment No. 130EW is immensely wide. It does not have within it any great restrictions on how these powers may be used. That is why I am so concerned about whether we are legislating in the right way. It is not that the Government say that they will use these powers unacceptably, but that the Bill will allow them to do so. We took a good deal of trouble in the 2004 Act to get the relationship between the pension fund and the company funding it right. That is in danger of being substantially disturbed. It is not what the Minister is saying, but how the Bill can be read and used. The Minister knows that affirmative resolution is all very well but, at the end of the day, it is not an effective check on the Executive. The occasions when we, let alone the Commons, will throw an order back at the Government are extremely rare. The Government have made no attempt today to set out the necessity for having these powers now. I have heard nothing from them to say that some impending crisis can be dealt with in no other way. I have heard nothing from them to say that the regulator’s powers have been tested and found wanting. I believe that I have not heard these things because neither of them true; this is just the Government looking ahead and anticipating developments. In that case, surely we have plenty of time to talk. We certainly do not need to rush at this before coming to Report. We can use the Summer Recess to talk these things through carefully and get them right. If we pass legislation like this, we have to ensure that we allow commercial life to keep running. The scope of the Bill is undefined and it is retroactive. It seems reasonable to me—I do not argue with the idea—that the provisions apply back to April this year, when they were announced. However, under the new clause, changes could be made in 10 years’ time which will still work back to April this year. It would introduce enormous uncertainty into commercial transactions if the rules on which those transactions are based could be rewritten at any time from now on. The clearance statement for a transaction done in a month’s time could be torn up because the rules on which it is based can be changed. Anything could be done if it is in the interests of the relevant pension fund.
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- Lord Oakeshott of Seagrove BayNon-affiliated
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- It may help the Committee if, like the noble Baroness, Lady Noakes, I set out briefly our general attitude on these Benches to the amendments and issues. First, I thank my former colleague the noble Lord, Lord Lucas, for the thoughtful way he spoke to the amendment. It reminded me of how much I used to enjoy working with him at Warburg’s 30 years ago, looking at balance sheets and making investments. Like the noble Baroness, I have had representations from industry, particularly the CBI and the private equity industry; it calls itself the BVCA, but private equity is what basically matters in this context. I also had a helpful meeting with the Pensions Regulator and discussed the issues. We on these Benches agree very much with the statement of principle that the Minister made on behalf of the Government just now about not weakening the employer covenant and standing behind pension schemes. In general, we support his approach of looking at the effect and not necessarily the intent of what has been done. Having said that, as the noble Lord, Lord Lucas, said, serious work needs to be done over the summer so that we are much more specific, much clearer and much firmer than where we are today. I have a strong feeling of déjà vu here. I had a little trip down memory lane with the noble Baroness, Lady Hollis, over supper; I well remember that we had an exactly similar situation in 2004 when serious worries were expressed. Then good work was done over the summer and, as a result, we ended up with a settlement between industry and the Pensions Regulator that has worked well so far. I very much encourage the DWP to look again at the model and take it seriously. The CBI accepts the logic for action that the Government have set out—that uninsured pensions providers did not exist in 2004 when the regulator’s powers were set out. I worry a great deal. The potential risk from the large buyouts is great and we are in uncharted territory. Further powers are needed. Equally, we do not want to leave everything to secondary legislation. The Government must do more work in thinking that through. The BVCA’s statement contains some echoes of the grave concerns—to say scare stories would be putting it too strongly—expressed by people in that industry in 2004. The impression was given that it would be almost the end of private equity transactions as we knew them. Since then, of course, there has been the most enormous private equity boom that there has ever been in this country. Therefore, I take the warnings with a pinch of salt, but it is perfectly reasonable that those people want to know more clearly where they stand. In particular, it is absolutely right that there should be a full regulatory impact assessment in good time. It is all very well for the Government to say that the costs will be negligible, but they are assuming what they have to prove by having a regulatory impact assessment. If they are right, the whole point of doing that is to show that people have nothing to worry about. I have provided a general flavour of where we stand. As in 2004, we thought that some of the warnings from the private equity industry were overdone, but it is perfectly reasonable that there should be more clarity and that we should not effectively be giving a blank cheque through secondary legislation. We would be very happy to be involved in discussions over the summer as I have some experience of these matters. We have good will to what the Government are trying to achieve, but they must try a lot harder.
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- Lord McKenzie of LutonLabour
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- I am grateful to all noble Lords who have spoken. It has been a useful opportunity to discuss genuine issues and concerns. I wish to speak specifically in response to the three further amendments tabled by the noble Baroness and the noble Lord, Lord Lucas. The purpose of the first of these amendments, Amendment No. 130EX, is to group together contribution notices, financial support directions and restoration orders under a single heading. I appreciate the intention as regards drafting efficiencies. However, the amendment is not necessary for the intended operation of the legislation. Regarding Amendment No. 130EY, one of the Pensions Regulator’s objectives when it was set up in 2005 was to protect the benefits of members of work-based pension schemes and to protect the PPF. As part of this objective the regulator needs to ensure that employers do not sidestep their pension obligations and it has a number of powers available to enable it to do so. In considering whether, without regulations, there is a material risk to the security of members’ benefits or to the PPF, the Secretary of State will have to form a judgment after getting the views of the Pensions Regulator and of other stakeholders. It would clearly not be appropriate to exercise the power if it did not reduce the existing material risks or, indeed, if it created serious new risks. I should like to reassure noble Lords that it is not our intention that by introducing provisions we materially increase such risks. The Government’s new clause proposed in Amendment No. 130EW includes safeguards to the power to amend provisions, including the requirement to consult the regulator and other key stakeholders. This will ensure scrutiny by relevant parties who will be alert to, and will actively seek to prevent, material increases in such risks. The consultation process should identify any unintended consequences that could increase such risks. The noble Lord’s amendment touches on the wider issue of ensuring an appropriate level of regulation. I agree that it is essential that we strive to achieve the difficult balance required to put in place regulations to enable the regulator to meet its statutory objectives but avoid undue burdens on sponsors of defined benefit schemes. It has been a fundamental principle that the regulator should act reasonably and on a risk-based approach. We now have a number of years’ operational experience that demonstrate the efficacy of that approach. I reassure the noble Lord that it is not the Government’s intention to use the new power to change this fundamental approach, but simply to ensure flexibility in the face of an increasingly sophisticated and fast-moving market. My view is that the safeguards that we have put into our amendment, together with the history of practice so far, offer reassurances of the intent of the Government and demonstrate the efficacy of the fundamental approach of the regulator. I hope that he will not press the amendment.
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- Lord LucasConservative
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- That is, with respect, not the time limit that I was referring to. The fact is that the amendment contains the power to make regulations retrospectively. That retrospection is limited only to April this year, so in 10 years’ time, regulations could be made changing that six years to 10—or, indeed, 20—years. The problems are with the amendment, not the regulations.
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- Lord McKenzie of LutonLabour
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- I apologise to the noble Lord. I think that I understand the point he is making, but there is no intention of this enabling us in 10 years’ time to make a change which would be retrospective to April of this year. As the noble Lord acknowledged, retrospection to April was intended to stop people pre-empting what might come forward in changes to the legislation.
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- Baroness NoakesConservative
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- I am sorry but in their amendment the Government are trying to take a power that would allow them to rewrite the rules without any time limit and to relate them back to April 2008. That is a very serious power and it would create huge uncertainty for the business community where a defined benefits scheme was involved. The Minister cannot just stand there and say that they want the power only for this first set of amendments. They are taking the power and that is what is so problematic about Amendment No. 130EW.
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- Lord Oakeshott of Seagrove BayNon-affiliated
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- Perhaps I did not make my position clear. I do not think that going away over the summer and working out some regulations will really meet the scale of what we are asking for. We are asking for serious amendments and changes to the draft primary legislation.
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- Lord McKenzie of LutonLabour
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- I understand the noble Lord’s position and realise where he was coming from. Perhaps I may deal with the point concerning retrospection. The Government’s statement on 14 April meant that the principal amendments to regulator powers would be introduced with effect from 14 April 2008. It was crucial that the Government’s announcement of their proposals did not prompt the kind of market behaviour that they were attempting to address before legislation came into effect. A Government, or future Governments, could make retrospective provision only if they had already announced their plans in the way that we did in April this year. The April announcements were in respect of the regulations that we are discussing now. The power is therefore not as wide as might first—
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- Baroness NoakesConservative
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- Would the Minister accept an amendment to Amendment No. 130EW to reflect what he has just said? At present, that is not what the amendment says.
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- Lord McKenzie of LutonLabour
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- I shall certainly take that comment away and consider whether I need to speak to officials about the impact of our drafting. However, we believe that the power is not as wide as might first appear. It does provide retrospection but only in relation to novel situations of material risk, and it would require consultation before it could be used to introduce changes. However, I shall take away that point and reflect on it. We shall not get to vote on the amendment tonight in any event; we have at least a day to do that. The noble Lord, Lord Lucas, asked whether the powers had been found wanting. The DWP and the regulator have seen many proposals for managing pensions liability and many are likely to be robust. However, the 2004 Act was not drafted with such innovation in view, and we need to keep on top of the innovations that are in the market at the moment. The noble Lord said that clearance could be torn up. The regulator has made it plain that if clearance has been given, it will not reopen that clearance as it must have been based on proper facts. That applies to any clearance. It is likely to be against the ECHR to legislate that existing clearance has become valueless but, in any event, that is not the intent. The noble Lord also touched on the issue of good faith. The legal principle of good faith sets a very high evidential burden and can easily be circumvented by those whose intent is avoidance. It therefore safeguards not only those who should be protected but those whose activities are, rightly, the target of the regulator. Good faith currently applies only to one of the two limbs in relation to issuing a contribution notice—namely, where the main purpose of an act is to prevent a debt becoming due or otherwise to settle or compromise it. It does not apply where the main purpose is to prevent recovery of a debt. The Government consulted on additional grounds to act on the basis of outcome rather than intent. They are exploring the safeguards that would be appropriate, such as additional reasonableness factors and test of material detriment, but those are still under consideration. The proposal to remove good faith is something that generated a considerable number of comments in the consultation exercise. We need to give full and proper consideration to the responses we have received, including alternatives that have been suggested, before formulating detailed regulations for further consultation. On the fair value point touched on by the noble Lord, it is not the Government’s intention that a transaction, whereby a person purchases assets or securities at fair value, would normally trigger the regulator’s use of its anti-avoidance powers, provided that, as part of the transaction, the pension scheme was properly considered and adequately addressed. However, the fact that a person had purchased assets or securities at fair value would not necessarily provide the reassurances needed. That would be only the first step in ensuring that capital was available to mitigate the risks to the scheme; it does not of itself get the capital to the scheme. I have tried to deal with the points that have been raised. Given the time, we will perhaps have an opportunity to consider the Government’s amendment at greater length on Wednesday, but I hope that the amendment to the amendment will be withdrawn.
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- 21:45
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- Speaker
- Lord LucasConservative
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- I thank the Minister very much for that explanation. As the noble Lord, Lord Oakeshott, said, it is not the regulations which give us cause for concern—they are proceeding along a quite reasonable process and are being consulted on and I have no reason to think from anything that the Government have said that that will cause problems—it is this amendment and the width of it. The noble Lord says that clearance statements will be sacrosanct, but that is not what the amendment says. The noble Lord says that retro-activity will apply only to the date of announcement of each new set of regulations, but that is not what the amendment says. Our problems are very much focused on the amendment. Those two elements—retro-activity and the sanctity of clearance statements—lie at the heart of people’s concerns. If they were dealt with, it would be much easier to get on with.
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- Speaker
- Lord McKenzie of LutonLabour
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- I have listened carefully to what the noble Lord says. I am not in a position to withdraw the government amendment this evening, but as we will not vote on it this evening, I shall discuss those two points with officials to see whether greater clarity can be introduced into the amendment. I do not make a commitment that we shall do so, but at least we shall have a breathing space. I understand the points made by the noble Lord and the noble Baroness.
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- Speaker
- Baroness NoakesConservative
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- In view of the time, I shall not make such extensive remarks as I had intended, for example, in relation to Amendment No. 130EW, which the Minister dismissed rather quickly. He does not wish to have a reference to increasing the risks to the matters referred to in the amendment. Much of that is arguable and not simply to be dismissed. The most important point that has come out from the noble Lord, Lord Oakeshott, and from my noble friend Lord Lucas is that it is not a matter of consulting on regulations. We believe that Amendment No. 130EW is unacceptable in its current form. Precisely how it needs to be changed is open for discussion. When we resume our consideration in Committee, I believe we should go through those remaining issues which have been identified by my noble friend’s amendments because each in its own way raises some of the concerns that go to the heart of why people are unhappy with the Government’s proposals. I hope that by the time we return to Committee, the Minister will be able to respond. It would be a gesture of good faith on the part of the Government not to move this amendment. They would lose nothing by so doing and it would demonstrate that the Government were prepared to listen and to engage fully with the community which has real, genuine concerns about the potential impact on the way in which business operates in this country. With that, I beg leave to withdraw Amendment No. 130EX. Amendment, by leave, withdrawn.
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- Speaker
- Lord TunnicliffeLabour
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- I beg to move that the House do now resume. Moved accordingly, and, on Question, Motion agreed to. House resumed.
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