I am grateful for the Minister's explanation, but I have some additional questions. First, he said that borrowing should be restricted to deal with short-term liquidity problems, but our concern is about longer-term liquidity problems. Does the Minister think there is a case for taking a slightly more relaxed attitude to that sort of borrowing? Clause 89(1)(b) states that the board may
''give security for any money borrowed by it.''
What kind of security does the Minister have in mind? Does he mean the uncharged assets of schemes taken over by the board, or other things?
I want to probe the Minister about the basis for the borrowing limit. The heart of the clause is missing,
because the Secretary of State will have the power to decide the borrowing limit. What is the thinking behind the proposal? What criteria will be applied to produce a borrowing limit, and will it be related to the income from the levies, or the income on the assets being administered at a given time? Will the approach be based purely on liquidity or on other relevant issues?
The big question, which hovers around the edges of many of the clauses, is about the Government's position. From my brief but highly informative trip to Washington it seemed that there was a consensus on both sides of the political argument that the American Government could not allow the Pension Benefit Guaranty Corporation to go under. Our Government are being unrealistic in suggesting that they will set up the board and the fund, which will run themselves and not require input from the Government if things go horribly wrong.
In the context of clause 89, that translates into the cost of borrowing because, as I said earlier, if the Government bit the bullet and said that they would stand behind the fund, that would not only satisfy the concerns of people such as the hon. Member for Cardiff, West, but reassure people who need assurance. It is pointless to have this elaborate structure if it does not reassure people, but the cost of borrowing would be that much lower simply because the board would not have to go to the commercial market and there would be some benefit in having support from the Government.
I am sure that the last thing the Treasury wants is to be seen to be backing the fund and I understand the narrow approach that would produce that result. However, the Treasury wants to interfere in all sorts of other aspects of the Bill, as we have seen, so will the Minister give a little more detail about the basis of borrowing, the borrowing limit, security, the Government's role and the cost of borrowing?