Clause 65 - Procedure for issue and publication of

Pensions Bill – in a Public Bill Committee at 10:15 am on 16th March 2004.

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Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 10:15 am, 16th March 2004

I beg to move amendment No. 248, in

clause 65, page 41, line 34, after 'appropriate' insert

'including representatives of the pensions industry, of occupational pension schemes, trade unions and sponsoring employers.'.

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss the following:

Amendment No. 254, in

clause 65, page 41, line 34, leave out ', and'.

Amendment No. 249, in

clause 65, page 41, line 35, leave out paragraph (b).

Amendment No. 236, in

clause 65, page 41, line 35, at end insert


(c) in such a manner that provides a minimum period of 12 weeks for the submission of responses.'.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Again, the amendments are designed to focus on the consultation process and how it will work. Some of them are home grown and one is inspired by the ABI. Amendments Nos. 248, 249 and 254 are designed to expand and make more specific the provisions regarding who the regulator is supposed to consult when it produces a draft code of practice. Clause 65(2) requires it to consult

''(a) such persons as it considers appropriate, and

(b) any other persons the Secretary of State requires it to consult.''

I have said my piece in the past and I will not repeat our suspicions about the Secretary of State's role—let alone that of the Treasury—in the legislation. Leaving that aside for a moment, it seems appropriate to us to spell out that as well as those persons ''it considers appropriate'', the consultation should include representatives of the pensions industry, occupational pension schemes, trade unions and sponsoring employers. It is difficult to see how the Minister could object to the amendment. There is that old argument, which one always comes across, about how much should be included in the Bill and what should not be included. No doubt the Minister will inform us that the regulator would, in any event, consult the relevant groups, and possibly other groups. That is all fine and dandy. However, I would prefer to see it spelled out in the Bill.

Amendment No. 236, which is inspired by the ABI, has slightly more meat on it and is to do with the consultation period. The Government have been accused in the past of going into a ''carry on consulting'' mode. The duration of some of their consultations on different issues has been quite short. Indeed, sometimes consultations have taken place during the holiday period. It makes sense to ensure that there is a minimum period. We would like there to be a minimum period of 12 weeks for the submission of responses—that seems fair. It is the best part of three months. However, I am not prepared to go to the stake over that. If the Minister accepts the principle and wants to think of a different period to insert, that would be fine, too.

Incidentally, the amendment would also enshrine criterion No. 1 of the Cabinet Office's code of practice on consultation. One wonders how often that is observed in the consultations undertaken by other Departments. That criterion says:

''Consult widely throughout the process, allowing a minimum of 12 weeks for written consultation at least once during the development of the policy.''

The amendment would replicate the practice of the Financial Services Authority, which seeks to provide at least 12 weeks for consultation. I failed to mention in the previous debate that the Government have also compelled themselves by legislation to publish cost-benefit analyses.

It is sensible, as the ABI suggests, for there to be a minimum period for consultation. In some cases there might be a longer period due to the complexity involved. Nevertheless, the basic point is that it is in the interests of the regulator and the Government to ensure that all those who have something to contribute should have the fullest possible say on these draft codes. It is sensible and reasonable for there to be a 12-week period. It is difficult to think of any code of practice that would need to be introduced so urgently that that kind of period for consultation would not be allowed. Assuming that the regulator and the Secretary of State will be open to sensible comments and suggestions, one hopes that each code would be improved as a result of this process.

To put it bluntly, I cannot think of any reasonable objection to the amendment. I hope that the Minister, who has already shown his broad-mindedness once this morning, will accept it without further ado.

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

I should like to explain briefly the effect of the clause before speaking to each hon. Member's amendment. Committee members will have noted that the clause ensures that there is proper parliamentary scrutiny over any codes of practice issued by the regulator under clause 64. It provides that there must be proper consultation and publication of draft codes. I shall return to that in a moment. When any comments have been considered, the code must be sent to the Secretary of State, who, if he approves it, must lay it before Parliament for the recommended period of 40 days, not including periods when the House is not sitting. Unless by resolution of either House Parliament objects, the Secretary of State can appoint by order a day on which the code can come into force.

Amendment No. 248 would require the regulator to consult representatives of the pensions industry, occupational pension schemes, trade unions and sponsoring employers when publishing a draft code of practice. Although the clause does not stipulate it, the groups mentioned in the amendment are precisely those that I suspect that the regulator will consult. One reason why that is not stipulated is that it may not be proper in every case for the regulator to consult all those groups. For example, it may not be appropriate to consult employers' groups on trustees' duties to report late payments by employers. The legislation on that matter is clear. Currently, all such payments must be paid by the 19th day of the month following the month in which the payments fall due. A further reason is that although these are the types of group that the regulator will consult, there are others, such as the representatives of actuaries and auditors, who may also be consulted. The legislation cannot be exhaustive; to mention some groups and not others

would suggest that the former had undue prominence or authority, which might not be the case.

Amendment No. 236 would require the consultation period for each draft code to be a minimum of 12 weeks. Although I understand that that suggestion might appear reasonable at first blush, it may in fact place an unnecessary constraint on the regulator in particular, urgent situations. In discussing clause 64, I mentioned a possible scenario in which the tribunal's determination might result in the regulator deciding that a code of practice should urgently be replaced. In those circumstances, a three-month minimum consultation period might not be appropriate and might put members' benefits at risk as a result of trustees' and managers' uncertainty about what would be expected of them in the interim.

I should point out that I do not anticipate that such circumstances will arise. However, as my colleague and I have said, our purpose in designing the legislative framework for the regulator is to balance certainty against flexibility and adaptability. No Committee member wants to create another situation in which legislation places unnecessary restrictions on the regulator and prevents it from properly doing its job, which is to protect members' benefits. The system of codes of practice provides the necessary clarity and certainty for the regulator community and gives sufficient flexibility to ensure that the regulator may take action to protect members, even if circumstances arise in future that none of us is able to foresee.

Amendments Nos. 249 and 254 would remove the Secretary of State's ability to require the regulator to consult any additional persons. Again, the provision is about balance. I do not expect the regulator not to consult the groups appropriate to each particular code. However, if such a situation were to arise, the subsection would merely provide an easy mechanism to remedy it.

As I have explained, each code of practice is subject to parliamentary scrutiny. If any hon. Member considered that the regulator had not consulted appropriately during the drafting process or that the Secretary of State had made an inappropriate direction about who should be consulted, they would have the opportunity to do something about it. I suggest that hon. Members wait for those unlikely circumstances to arise rather than restrict the flexible approach that we propose at this stage.

As drafted, the clause provides the procedure for the issue and publication of codes of practice with the necessary and appropriate levels of scrutiny, flexibility and openness. The regulator must publish the code as it considers appropriate. Amendment No. 250 would remove the subsection allowing the regulator to publish any code in a way appearing to it to be appropriate. Enabling that flexibility allows for publication by either—or both—paper and electronic means.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 10:30 am, 16th March 2004

I think that the Minister is getting ahead of himself. I have not moved that amendment yet.

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

No; what was on the hon. Gentleman's mind in relation to that amendment was obviously communicated to me by some strange mechanism. I am sorry to have anticipated him. Perhaps I was wrong in thinking that it might be helpful to anticipate. It is probably best for me to ask the hon. Gentleman to withdraw his amendments and sit down.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I suppose that if we continued like that, there would be no need for me to say anything at all; the Minister could conduct both sides of the debate. Who knows? That might even be a step in the right direction. As long as it was not the Minister with the pillow over his face, we might all be a lot better off.

I do not think that the amendments can be criticised at all on grounds of practicality. The Minister seems to accept the fundamental principles behind them, although perhaps he would like to tinker with the list of consultees. The industry will be puzzled about why the principles at least could not be accepted. However, I do not want to detain the Committee. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I beg to move amendment No. 250, in

clause 65, page 42, line 23, leave out paragraph (10).

Photo of Mr Win Griffiths Mr Win Griffiths Labour, Bridgend

With this it will be convenient to discuss amendment No. 252, in

clause 68, page 43, line 31, leave out subsection (2).

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

The Minister is like a coiled spring, waiting to leap on my arguments about the amendments and hack them to pieces. However, if he can contain himself, I shall explain my intentions, which, hopefully, approximate to the intentions set out in his speaking notes. Clause 65(10) and clause 68(2) have almost the same wording. It is curious that, having gone to all the trouble to arrange for the regulator to publish draft codes of practice or draft statements of procedure, both of which are important for a range of organisations, the clause says in a limp way that it is up to the regulator to publish a code

''appearing to it to be appropriate.''

What is behind that?

There is only a limited number of ways of publishing codes. The regulator may stick them on the website. It is bound to have a website; everyone does these days. I do, and I am sure that the Minister does, too. I hope that hard copies will be available for old-fashioned people who like the feel of paper. What possible range of options can the regulator be looking at when deciding how to publish the draft codes or the draft statements of procedure? I hope that the Minister will enlighten me.

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

I listened carefully to the hon. Gentleman. It might be useful to repeat what I said earlier about enabling flexibility—the corner-stone of our approach—that allows for publication by either or both paper and electronic means. If members of the

Committee want an idea of what that looks like, we have left on the Table copies of the OPRA document on guidance for scheme auditors and scheme actuaries. That will reassure the hon. Gentleman that the draft codes and statements will be available in a printed format.

The clause allows that a code that relates to duties of, for example, actuaries may also be sent to the appropriate professional organisations for onward distribution to their members. Clearly, we would not go to the trouble of specifying the need for codes without ensuring that they were published and distributed properly. As members of the Committee will appreciate, it makes no sense for any code to be published in such a way that those to whom it is directed are unaware of its provisions. That would not suit us, the regulator or the regulated community, and neither would it be in the interests of those whom ultimately we want to help. Given those reassurances, I hope that the hon. Gentleman will withdraw the amendment.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

On the basis of the Minister's reassurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 65 ordered to stand part of the Bill.