I very much appreciate the succinct way in which the noble Viscount, Lord Eccles, introduced his amendment. I had prepared to respond to his points in a similarly succinct way and to give reassurance on those limited areas. However, the fact that the question on Clause 71 stand part is grouped with the amendment has inevitably led to a much wider survey of the issue. That has happened before I have been able to move government amendments, which will require me to spell out the thinking behind the clause in considerably greater detail, and before I have had the chance to listen to, and reply to, the arguments relating to additional amendments to the clause. I am therefore in some difficulty. I hope noble Lords will forgive me if I try to answer the points briefly at this stage, as fairly substantial discussions on this clause and the whole issue of the pension position are still to flow in our later proceedings.
I want first to emphasise why Clause 71 is necessary. A modification to a pension scheme may be necessary to facilitate a fully effective transfer. An order or instrument may in particular make provision regarding the consequences of a transfer for a pension scheme or about the property, rights and liabilities of a scheme. The instrument may, among other things, modify rights and liabilities, apportion rights and liabilities, or transfer property or accrued rights to another pension scheme.
If a failing bank is part of a group of companies—the point raised by the noble Lord, Lord Higgins—then all group employees may participate in the group's pension scheme. In this situation, if a deposit-taker is transferred from the group, it is likely to be necessary for the employees of the bank to be transferred to a separate scheme. This clause provides that the authorities may make provision to transfer the employees from the group pension scheme and to establish a new scheme, or to transfer the employees into the transferee's pension scheme for all future service benefits. In the case of a partial property transfer, for example, it may be necessary to make provision to apportion pension liabilities between the failing bank and the transferee. Further, it may be appropriate to make consequential provision regarding the terms of a pension scheme.
I want to assure the noble Viscount, Lord Eccles—this is the cardinal point which I want to establish with the Committee—that this provision would not amend accrued rights. It does not do that and does not create the possibility of doing it, nor have we any intention of doing it. It applies both to the group position and to individuals. The powers taken in Clause 71 are necessary because leaving pension matters to be dealt with through normal corporate transactional methods could jeopardise the ability of the authorities to effect a swift and effective transfer to resolve the problems of a deposit-taker. For example, in normal commercial conditions any reallocation of pension liabilities would almost always require agreement from the trustees of the pension scheme. That could lead to significant delay while the trustees considered the matter, but it could also result in the trustees requiring a figure—even a ransom—to secure consent. In addition, there might be general regulatory requirements which involve lengthy notice periods, which for obvious reasons is frequently the custom with pension arrangements. All of these matters may impede the resolution of what is intended to be a fairly rapid exercise, and that would be contrary to the broader public interest in effecting the transfer.