Clause 11 - Functions exercisable by the

Pensions Bill – in a Public Bill Committee at 3:45 pm on 9th March 2004.

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Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 3:45 pm, 9th March 2004

I beg to move amendment No. 126, in

clause 11, page 6, line 15, leave out subsection (5).

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss the following:

Amendment No. 127, in

clause 11, page 6, line 39, leave out subsection (7).

Amendment No. 128, in

clause 11, page 6, line 41, leave out subsection (8).

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 4:00 pm, 9th March 2004

Despite our abstention on the last vote, we on this side of the Committee are not great fans of the determinations panel. Each of the three amendments seek to remove extensions of functions of that slightly sinister body, which presumably will meet behind closed doors, probably wearing pointed hoods.

In subsection (5), we take exception to the proposed measure to extend the functions of the regulator by further regulations. That sort of extension should be in the Bill, and if that requires primary legislation then so be it.

Subsection (7) states:

''The Panel may be authorised . . . to exercise further functions of the Regulator on behalf of the Regulator.''

We have the prospect of a creeping increase in jurisdiction on the part of the determinations panel as time goes on. We are uneasy about that.

However, subsection (8) takes the biscuit. The Government propose setting up a marvellous structure, with many people moving across from OPRA, other people joining in and officials being seconded from the Department for Work and Pensions. On top of that, they propose setting up the determinations panel—for reasons that still do not fully convince me. Moreover, as soon as that panel—which would contain lots of clever lawyers and other people—gets going, it can delegate some of its powers and functions to other people.

Subsection (8) states:

''The Panel may authorise any of it members or any of its sub-committees to exercise on its behalf''

those functions. If—it is a large if—the panel is going to be set up, will it be so overwhelmed with work that it should be in a position to pass on or delegate functions to one of its members or sub-committees from day one? If it is going to be set up, the panel should take the decisions—however many or few they may be—and not delegate to a body within a body. The panel is a curious enough animal in the first place. The Government are pushing their luck if they expect Committee members to embrace the notion of its delegating some of its functions.

Those are the reasons behind the three amendments, and I commend them to the Committee.

Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions

I should like to make a brief observation. The amendments take out some of the powers under clause 11 to extend or amend the role of the determinations panel. Amendment No. 128 applies to subsection (8), which mentions members of the panel or its sub-committees. We are starting to get the sense that there may be a large number of people involved. In the previous debate, Committee members will have observed that the Under-Secretary did not tell us who will pay those people, how much they are likely to cost or how what they do will relate to what the regulator does.

The third amendment refers to the panel's sub-committees. We have heard that they are going to contain well qualified lawyers and experts; they do not come cheap. There will be sub-committees, so there will have to be lots of them. We still do not know who pays them. If the regulator pays them they are employees of the regulator: that cannot be right. Presumably the Department pays them. Was that expenditure included in the figure for the cost of the regulator that we were given earlier? Can the Under-Secretary clarify that matter, to help our assessment of the amendments?

Photo of Mr Chris Pond Mr Chris Pond Parliamentary Under-Secretary, Department for Work and Pensions

Clause 11 and Schedule 2 outline the determinations panel's duties. The amendments that have just been presented to the Committee would introduce regrettable inflexibilities. The purpose is that the determinations panel should be light on its feet.

The determinations panel will exercise the reserved regulatory functions set out in schedule 2. Amendment No. 126 would remove the ability to add or remove reserved regulatory functions by regulations, but that facility is needed if we are to have a genuinely flexible and proactive regulator. Any additions to or removals from the list by regulation will provide for parliamentary scrutiny to ensure that functions are delegated only in a responsible and effective way. In addition to exercising these functions, the panel may act on behalf of the regulator in exercising non-reserved regulatory functions. That will enable the panel to issue an improvement notice, for example, to which I referred a few moments ago.

Amendment No. 127 would prevent the regulator from delegating any non-reserved functions to the panel, which again would introduce unwelcome rigidities. Amendment No. 128 would require the whole panel of seven members to sit before any of its functions could be exercised. That would create a slow and cumbersome process. It is recognised practice for sub-committees to determine matters. There also needs to be some flexibility for cases where a panel member faces a conflict of interest. Sufficient safeguards are built into the process to allow directly affected parties a right to seek a review of a decision by the pensions regulator tribunal.

The hon. Member for Northavon asked who pays for the determinations panel. The money will come from the levy, in the same way as all the other costs of the regulator are met. On the basis of that clarification, I ask for the amendment to be withdrawn.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

All that the Under-Secretary is saying, with his customary charm, is that the Government cannot be bothered to change what they have already put in the Bill.

There is little point in having clever people deciding what reserved powers this mysterious and omnipotent panel will deal with and then saying, ''Actually, on reflection, we think that it should deal with non-reserved powers as well, because the poor old regulator will want to offload things.'' The members will be light on their feet. Their first task is to try to delegate the regulator's functions to someone else—a sub-committee or one of its number. That strikes me as absurd, but I am in a relatively good mood so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 11, in

clause 11, page 6, line 45, at beginning insert 'any of'.—[Malcolm Wicks.]

Clause 11, as amended, ordered to stand part of the Bill.