Clause 21 - Consequences of freezing order

Pensions Bill – in a Public Bill Committee at 10:15 am on 11th March 2004.

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

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

I seek your guidance on your procedural custom, Mr. Griffiths. The Committee would value brief presentations on clauses that contain very technical material. We do not want to protract proceedings; we just want to be given a clue about what some of the clauses mean. We would rather be told what they mean than waste time speculating about it.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

You are appealing to the Under-Secretary to say a few words, I believe, Mr. Webb.

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

I am happy to give a quick clarification—I am sure that the Committee will be pleased if it is quick.

The clause sets out the consequences of a freezing order on a scheme. The power to freeze a scheme will be a new situation for schemes, so we want to set out the consequences clearly in the Bill. Trustees need to be certain about the effect of freezing orders on consequential matters such as accrual of increases, and whether they can comply with a pension sharing order.

It is necessary to make any action in contravention of the freezing order automatically void, to ensure that it has sufficient effect, but the regulator has discretion to validate actions because we must also ensure that we have a flexible and responsive regulator. The clause determines that any action in contravention of a freezing order will be void unless the regulator chooses to validate it, as permitted by clause 23, and it gives the regulator the power to impose a penalty on the trustees or managers of a scheme if they fail to take all reasonable steps to comply with a freezing order.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

Before we proceed, it might be helpful if I say that if any Committee member would like a Government Minister to explain something about a clause to which no amendments have been selected for debate, they can stand up and ask about it; they do not have to rely on me to call the Minister.

Question put and agreed to.

Clause 21 ordered to stand part of the Bill.