Clause 3 - Further provision about the Regulator

Pensions Bill – in a Public Bill Committee at 10:45 pm on 9th March 2004.

Alert me about debates like this

Question proposed, That the clause stand part of the Bill.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

Clause 3 should be read in conjunction with schedule 1, and with clause 1, which establishes the new regulatory body. The regulator will be in place, subject to the passage of the Bill, from April 2005. Clause 3 and schedule 1 make provision about the terms of appointment and remuneration of members, the appointment of the chief executive and other staff, the proceedings of the regulator and its funding and accounts, and its status, liability, members and staff.

I shall deal with each part of schedule 1 in turn. Part 1 allows that the Secretary of State will determine the terms and conditions, and remuneration, of the members of the board. No member of the pension protection fund staff is eligible for appointment as a member of the regulator. References in the relevant clauses to executive members of the regulator's board mean the chief executive and those members appointed from the staff of the regulator. Accordingly, any reference to non-executive members is to the remaining members, including the chairman. We shall discuss the purpose and function of the non-executive members later.

It is worth pointing out that we chose this structure for the regulator to ensure consistency with the recommendation of the Higgs report on the role and effectiveness of non-executive directors. It is worth emphasising that Higgs's recommendation applies to corporate bodies of publicly listed companies, but we believe that his principles of good governance extend equally to Government bodies, such as the pensions regulator. Therefore, we propose to adopt the recommendations where they are appropriate.

Part 2 of schedule 1 defines the staff of the regulator and makes detailed provisions for the proper appointment of the chief executive by the Secretary of State. Part 3 covers the details of the membership of the determinations panel of the regulator. We shall discuss that in more detail when we consider clauses 10 and 11, which relate to the panel.

Part 4 is concerned with the regulator's ability to set up committees and sub-committees for any purpose connected with its functions. In most cases, those sub-committees may include individuals who are not members of the committee, but that does not apply to either the non-executive committee or the determinations panel. The regulator can also authorise any member of its staff or any committee to carry out any of its functions; part 4 of schedule 1 covers that. Again, that provision does not extend to the determinations panel or to the functions of either the panel or the non-executive committee.

The ability to form sub-committees and to delegate functions will ensure that tasks can be carried out at the appropriate level. That will ensure the operational effectiveness and efficiency of the regulator. The regulator's power to delegate can be altered by regulations if necessary; again, part 4 covers that. Part 5 is concerned with the regulator's funding and accounts and the appointment of the Comptroller and Auditor General as auditor. Part 6 establishes the status and liability of the new body.

Each of these provisions is an important building block, forming part of a sound administrative and financial structure for the regulator, and establishing the appropriate relationship to a non-departmental public body between the regulator and the Secretary of State. I beg to move that clause 3 and the associated schedule 1 stand part of the Bill.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 11:00 am, 9th March 2004

On a point of order, Mr. Griffiths. I apologise for being rusty about procedure, but is it in order to move that clause 3 and schedule 1 stand part of the Bill together? It is my understanding that as we are debating amendments to schedule 1, we cannot move that it stands part of the Bill at this point.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

That is correct.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.