Clause 65 - Procedure for issue and publication of
Pensions Bill
10:15 am
Mr Malcolm Wicks (Minister for pensions, Department for Work and Pensions; Croydon North, Labour)
I should like to explain briefly the effect of the clause before speaking to each hon. Member's amendment. Committee members will have noted that the clause ensures that there is proper parliamentary scrutiny over any codes of practice issued by the regulator under clause 64. It provides that there must be proper consultation and publication of draft codes. I shall return to that in a moment. When any comments have been considered, the code must be sent to the Secretary of State, who, if he approves it, must lay it before Parliament for the recommended period of 40 days, not including periods when the House is not sitting. Unless by resolution of either House Parliament objects, the Secretary of State can appoint by order a day on which the code can come into force.
Amendment No. 248 would require the regulator to consult representatives of the pensions industry, occupational pension schemes, trade unions and sponsoring employers when publishing a draft code of practice. Although the clause does not stipulate it, the groups mentioned in the amendment are precisely those that I suspect that the regulator will consult. One reason why that is not stipulated is that it may not be proper in every case for the regulator to consult all those groups. For example, it may not be appropriate to consult employers' groups on trustees' duties to report late payments by employers. The legislation on that matter is clear. Currently, all such payments must be paid by the 19th day of the month following the month in which the payments fall due. A further reason is that although these are the types of group that the regulator will consult, there are others, such as the representatives of actuaries and auditors, who may also be consulted. The legislation cannot be exhaustive; to mention some groups and not others
would suggest that the former had undue prominence or authority, which might not be the case.
Amendment No. 236 would require the consultation period for each draft code to be a minimum of 12 weeks. Although I understand that that suggestion might appear reasonable at first blush, it may in fact place an unnecessary constraint on the regulator in particular, urgent situations. In discussing clause 64, I mentioned a possible scenario in which the tribunal's determination might result in the regulator deciding that a code of practice should urgently be replaced. In those circumstances, a three-month minimum consultation period might not be appropriate and might put members' benefits at risk as a result of trustees' and managers' uncertainty about what would be expected of them in the interim.
I should point out that I do not anticipate that such circumstances will arise. However, as my colleague and I have said, our purpose in designing the legislative framework for the regulator is to balance certainty against flexibility and adaptability. No Committee member wants to create another situation in which legislation places unnecessary restrictions on the regulator and prevents it from properly doing its job, which is to protect members' benefits. The system of codes of practice provides the necessary clarity and certainty for the regulator community and gives sufficient flexibility to ensure that the regulator may take action to protect members, even if circumstances arise in future that none of us is able to foresee.
Amendments Nos. 249 and 254 would remove the Secretary of State's ability to require the regulator to consult any additional persons. Again, the provision is about balance. I do not expect the regulator not to consult the groups appropriate to each particular code. However, if such a situation were to arise, the subsection would merely provide an easy mechanism to remedy it.
As I have explained, each code of practice is subject to parliamentary scrutiny. If any hon. Member considered that the regulator had not consulted appropriately during the drafting process or that the Secretary of State had made an inappropriate direction about who should be consulted, they would have the opportunity to do something about it. I suggest that hon. Members wait for those unlikely circumstances to arise rather than restrict the flexible approach that we propose at this stage.
As drafted, the clause provides the procedure for the issue and publication of codes of practice with the necessary and appropriate levels of scrutiny, flexibility and openness. The regulator must publish the code as it considers appropriate. Amendment No. 250 would remove the subsection allowing the regulator to publish any code in a way appearing to it to be appropriate. Enabling that flexibility allows for publication by either—or both—paper and electronic means.