I beg to move amendment No. 221, in
clause 138, page 85, line 26, at end insert—
'(3) The Secretary of State must approve any determination by the Board under section 137(5) in respect of a financial year.'.
I apologise for not moving amendment No. 222. It did not make much sense when I read it in the cold light of day.
On the other hand, amendment No. 221 is eminently sensible. Despite my visceral distrust of the Treasury sticking its oar into a number of crucial areas in the Bill, there is merit in including in these provisions an approval by the Secretary of State in respect of a particular financial year under the levies set out in clause 137(5). Given that he pops up in other parts of the Bill I am surprised that he has not been included here, and I would be grateful if the Minister explained that.
I cannot account for the hon. Gentleman's prejudices against the Treasury. He should discuss them with a senior colleague to see what Oliver's twist is on that.
This clause sets out the supplementary provisions relating to the pension protection levies. The
amendment provides that the Secretary of State must approve any determination made by the PPF board in relation to the pension protection levies as contained in clause 137(5). That would result in the PPF board not having the appropriate freedom and flexibility to set future pension protection levy rates and structures. It would also result in the Government being seen as providing a financial guarantee for the liabilities relating to the PPF. Our aim in setting up the PPF as a non-departmental public body is to strike the appropriate balance between giving the PPF board the freedom it needs to operate independently and applying the appropriate checks and constraints. To provide that the Secretary of State should approve any determination the board makes in relation to the levy cuts across that intention.
We have taken on board the lessons learned from the United States where Congress is responsible for setting the rate of the levy. That has posed political problems for the Pension Benefit Guaranty Corporation in raising the levy sufficiently to meet its liabilities. That has resulted in there being no increase in the levy rate since 1991, and in the PBGC now experiencing severe financial difficulties. To ensure that the PPF is managed prudently and appropriately, we have set in place the necessary constraints and parameters within which the board may operate.