Schedule 1 - The Pensions Regulator
Pensions Bill
2:30 pm
Mr Malcolm Wicks (Minister for pensions, Department for Work and Pensions; Croydon North, Labour)
Good afternoon, Mr. Griffiths.
May I apologise to the hon. Member for Northavon and other Committee members if they have had difficulty in getting copies of the regulatory impact assessment? I am told that copies will be available in the Vote Office tomorrow, and there will be a supply on the Table in Committee on Thursday. If anyone would like a copy of the assessment for bedtime reading, however, I can make copies available urgently.
This amendment would remove the regulator's exemption from liability for damages, as we have heard. We are not acting without precedent in
introducing the provision. The Occupational Pensions Regulatory Authority enjoys a similar immunity from damages, and the Bill seeks to replicate that arrangement while ensuring that the regulator will be liable for any contravention of the European convention on human rights or for acts of bad faith.
As we managed to proceed in a spirit of consensus this morning, I shall not labour my point. When we follow the precedent of OPRA, which was established by the Pensions Act 1995, we follow an Act of Parliament that predated the Labour Administration. I do not know to what extent Conservative colleagues objected to the exemption when that legislation was introduced. Labour did not invent the exemption. Indeed, I am advised that the exemption from damages is narrower than that contained in the 1995 Act, which provided a blanket exemption, although that is not a comfort blanket for the hon. Member for Eastbourne. The exemption is now rather more limited.
Without the protection that we are suggesting, the regulator would be liable for damages arising from its staff members' actions or failures to act. That is why I am asking the hon. Gentleman to withdraw the amendment. We believe that its effect would be to prevent the regulator from achieving its objectives, and particularly the objective of protecting members' benefits.
The exemption may raise eyebrows—it has raised one or two already—and questions may be asked about its necessity. Let me try to explain. Let us say, for example, that the regulator receives information from a scheme auditor that a particular trustee is about to remove scheme funds for his own purpose. If the regulator reasonably believes that to be the case, it should act via the special procedure to appoint a trustee with exclusive powers to take control of the scheme's bank account and ensure that funds cannot be removed.
Paragraph 35(5)(a) provides for damages where the regulator has acted in bad faith. Damages are also available when the regulator has contravened the Human Rights Act 1998. I am sure that hon. Members will agree that it would be foolish to provide the regulator with powers to protect members' benefits, but then, when it thought it suitable, to prevent members from exercising them in extreme cases. That is the balance that we seek on behalf of scheme members. I understand that that may raise concerns. I emphasise that we are following the precedent of the 1995 Act, and I therefore ask the hon. Gentleman to withdraw his amendment.