These are technical amendments concerned with the special procedures of the regulator that give him the ability to act straight away when there is an immediate risk to members' interests or scheme assets. Unless anyone would like further explanation, I commend them to the Committee.
Amendment agreed to.
Amendments made: No. 200, in
clause 71, page 45, line 33, at end insert
( ) a case falling within subsection (3A)'.
No. 201, in
clause 71, page 46, line 15, at end insert—
'(3A) A case falls within this subsection if the Regulator—
(a) gives a warning notice as described in section 70(2)(a) in relation to a determination whether to exercise a regulatory function which—
(i) is listed in subsection (4), and
(ii) is not a function listed in section 70(5) (functions which may be exercised immediately under the standard procedure),
(b) considers the representations of those persons to whom the warning notice is given, and
(c) determines to exercise the function immediately on the basis that it is necessary to do so because there is, or the Regulator considers it likely that if the function were not exercised immediately there would be, an immediate risk to—
(i) the interests of members under an occupational or personal pension scheme, or
(ii) the assets of such a scheme.'.
No. 202, in
clause 71, page 46, line 16, leave out 'and (3)' and insert ', (3) and (3A)'.
No. 56, in
clause 71, page 46, line 30, leave out '3' and insert '3(1)'.
No. 57, in
clause 71, page 46, line 34, leave out '4' and insert '4(1)'.
No. 58, in
clause 71, page 46, line 39, at end insert—
'( ) the power under section 9 of that Act to exercise by order the same jurisdiction and powers as the High Court or the Court of Session for vesting property in, or transferring property to, trustees in consequence of the appointment or removal of a trustee;'.
No. 59, in
clause 71, page 46, line 43, at end insert—
'( ) the power under section 30(2) of that Act to exercise by order the same jurisdiction and powers as the High Court or the Court of Session for vesting property in, or transferring property to, the
trustees where a trustee becomes disqualified under section 29 of that Act;'.
No. 60, in
clause 71, page 46, line 45, leave out
', notice or direction made, issued'
and insert 'or notice made'.
No. 61, in
clause 71, page 46, line 47, leave out
'(a) to (h), (j), or (l) to (o)'
'(a) to (o) other than those mentioned in paragraph (i) or (k)'.—[Malcolm Wicks.]
Question proposed, That the clause, as amended, stand part of the Bill.
My questions for the Under-Secretary boil down to this: how special is the special procedure? It is clear from the guts of the clause—subsection (2)—that the regulator has to be satisfied that it is necessary to exercise the functions listed immediately if he
''considers it likely that if a warning notice were to be given there would be, an immediate risk to . . . the interests of members . . . or . . . the assets of . . . a scheme''.
Will the Under-Secretary say—so far as he can, given how distant the operation of the clause is—how the clause would operate in practice? How rare would use of the special procedure be? Could he say a little more about what kind of situations he had in mind when drafting the clause?
I shall pick up on the hon. Gentleman's comments. The Under-Secretary has helpfully supplied members of the Committee with a briefing note on general and special procedures. It flags up the fact that the procedures are quite a drastic step. The note says that actions taken under the clause may temporarily, but seriously, impinge on the human rights of any affected person. The note goes on to state that that can be justified when balanced against the risk to members' interests, but that the line needs to be trodden carefully. As the hon. Member for Eastbourne said, it would be helpful if the Committee could be told how often such a procedure might be required. Is there a parallel in the existing regulatory framework? If not, how new is this? For how long might the provisions apply in any particular case?
On a point of order, Mr. Griffiths. This might seem churlish, and it may be the fault of my office, but I did not have the benefit of that briefing note—just as the hon. Gentleman did not have the benefit of an invitation to the Programming Sub-Committee. I do not know how the note was supposed to get to me; I am sure that my life will go on much as before without reading it, but it would be nice if I could be given another copy if I have lost the first one—or if it has been eaten by my dog.
I apologise to the hon. Member for Eastbourne if he did not receive that briefing note. We will make sure that he receives a copy as soon as
possible. However, it is probable that life will continue much as before, with or without it.
Three types of situation are provided for under this part of the Bill. The first situation is where there is an immediate risk; I think that the Committee accepts that in those circumstances the determinations panel must act immediately in order to protect members' interests. The second situation is when the regulator has given a warning notice but, before considering representations, decides that there is an immediate risk—in other words, new information becomes available. The third situation is where the regulator issues a warning notice, considers a representation, and decides to act immediately.
As the hon. Member for Northavon said, the first two types of situation are obvious—when the regulator receives information and must act immediately, or when the regulator has sent a warning notice but receives information while waiting for a response that makes it reassess the situation and determine there is an immediate risk. The third situation is provided for by Government amendments Nos. 199 to 202. We have considered them, but they may need a little further explanation.
Let us suppose that the regulator has received an application from the members to appoint a trustee because they believe that the current trustee is too closely connected to the employer, but there is no evidence of behaviour likely to put the scheme assets or members' benefits at risk. The regulator will then follow the standard procedure and issue warning notices giving the parties a time within which to respond—let us say 14 days. If on day two the regulator received a fax from a member-nominated trustee saying that he had just heard that the managing director—who was also a trustee—had asked the bank to transfer a large sum of money out of the pension scheme urgently, the regulator would have to act that day. The regulator could not wait until the expiration of 14 days, when all responses will be received, before taking action. The functions that the regulator can exercise immediately are detailed in clause 71, and I am sure the Committee agrees that it may be necessary for it to exercise them immediately, to protect members' interests.
I can confirm that any regulatory functions prescribed under clause 4(1) must be prescribed by the Secretary of State and will be subject to the normal parliamentary procedures.
Liberal Democrat and Conservative Members were trying to get a feel for the frequency with which the powers might be used—although I appreciate that any estimate will be somewhat speculative—and also whether they are new powers, or whether they mirror anything in existing legislation.
I apologise, Mr. Griffiths; the hon. Gentleman raised those questions and I should have responded to them. There is nothing new in this, but we are setting it out in legislation. OPRA's emergency procedures are already set out, and they are reflected in the Bill. We do not expect there to be a significant number of cases; there are an average of 10 emergency cases per year, according to OPRA's experience.
I hope that the Committee will accept those reassurances.
Question put and agreed to.
Clause 71, as amended, ordered to stand part of the Bill.
Clause 72 ordered to stand part of the Bill.