Schedule 2 - The reserved regulatory functions

Part of Pensions Bill – in a Public Bill Committee at 4:15 pm on 9 March 2004.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 4:15, 9 March 2004

I am beginning to warm to recurring themes, and there are two prompted by new clause 3.

First, new clause 3 comes within the scope of schedule 2, which relates to the determinations panel. That panel is able to commission experts, who are presumably highly paid pension experts although they are not expert enough for this sort of thing. Those experts therefore pay somebody else to do expert work for them. We are talking about the determinations panel, which is independent of the regulator—it is not paid by the regulator, but out of the levy, which I suppose means that it is paid by the Department, although I am slightly hazy on that. Can panel members show the contents of the expert report to the people to the other side of the Chinese wall? Perhaps they cannot. If the regulator needs an expert opinion, there should be another new clause—perhaps the Government have yet to table one—which relates to the fact that the regulator will be able to commission expert advice. Alternatively, perhaps the regulator is an expert so it does not need to commission expert advice.

People will start to say, ''Come on, what's going on here?'' There are different bits of different organisations. Provisions apply to one bit, but not to the other bits. People can tell others about one bit, but not others. Things are becoming tortuous, and one wonders whether the new clause is designed to facilitate the smooth running of the regulator. I do not necessarily object to the regulator asking for expert reports, although I am surprised that we need an Act of Parliament to enable it to do that—I do not see why, if the regulator does not know the answer to something, it cannot ask someone and pay them for their advice. If we need a new clause, I do not understand why it has to be to schedule 2, which refers to the bit the other side of the wall. Why cannot the whole regulator benefit? I am concerned about the determinations panel and this artificial subdivision.

There is another issue, relating to the dreaded pension protection fund, which we have not yet reached. The example that the Under-Secretary gave when speaking to the new clause was that the Government might need to work out the state of

play of an industry and the viability of the company—which is, presumably, meat and drink to the pension protection fund. The fund will want to know whether a particular industry will have lots of people going to the wall and making claims on the PPF. Will it also be conducting expert research into the state of the steel industry or airline industry or whatever? Will the determinations panel be allowed to tell the PPF the contents of the report? Will it be required to? Will three different sets of people end up commissioning the same single expert because none of them are allowed to talk to one another?

I sense a lot of overlap between different bits of the system. I began as an enthusiast for this regulator, but within three hours my enthusiasm has waned. I hope that the Under-Secretary can reassure us on the points that I have raised.