Clause 14 - Improvement notices
Pensions Bill
4:45 pm
Mr Nigel Waterson (Eastbourne, Conservative)
Let me say by way of background that we endorse the idea of improvement notices and close relation third party notices as a more benign step along the way of regulation before pressing a nuclear button. There was an element of black and white about the 1995 Act, and I can see the point of trying to soften the regulatory framework, certainly in cases where there is an expectation that those notices will be complied with. I take that view because—I hope that one can make this assumption—such notices are more likely to be directed at the more responsible companies where there has been an infringement that is easily remediable and may not be dreadfully serious, but needs to be dealt with. I would assume that in the
egregious cases involving badly run schemes, one would go straight to the tougher options. However, that is a matter for the regulator in the future.
We broadly support amendments Nos. 131 and 133, which seek to remove similar wording from clauses 14 and 15 that stitches in the provisions in section 10 of the Pensions Act 1995 concerning the penalties that apply for people who fail to comply with the improvement notice or the third party notice. Our logic was that in the same way in which those remedies can be graded in terms of seriousness, such serious penalties should not apply to a failure to comply with those particular notices. As I understand them, they are designed to chide people into doing the right thing, rather than to produce a nuclear result.
Therefore, we would suggest removing those provisions. If the Government are prepared to do so, we would ask them to consider a lesser set of penalties or to take the view that such penalties are advisory, on the basis that there are tougher penalties in the armoury if the notices are not met in a very short space of time.
Amendment No. 132 aims to remove clause 15(3). It is an attempt to work out what the subsection means. The subsection states that where directions are given they can
''be framed so as to afford the third party a choice between different ways of remedying or preventing the recurrence of his failure.''
I badly need from the Minister some sort of example of what on earth the Government are talking about. I would have thought that offering a choice of ways of dealing with a particular breach made for regulatory confusion. I have thought about the matter quite a lot and I am hard pressed to think of a concrete example. Given the firepower of the officials who are advising Ministers on these issues, I am sure that they must have such examples at their fingertips. That is what I am craving from this probing amendment.