Clause 168 - Review and reconsideration by Board of reviewable matters

Pensions Bill – in a Public Bill Committee at 9:45 am on 20th April 2004.

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

Mr. Waterson: May I return to the principle of the issue of review? We entirely understand why there should be a PPF ombudsman and that what he or she does must largely mirror much of the good work that has been done by the ombudsman set up under the 1993 legislation. However, it is interesting that the Library note refers to this part of the Bill as dealing with the ''internal dispute resolution procedure''. In a funny sort of way, this is not quite the same thing as people complaining that their new fridge does not work, or their car does not do what it should. As I said in a previous debate, matters of life and death could be involved for people who are not getting their PPF compensation at all, or having it completely miscalculated and receiving far less than they are due. We are raising this great edifice of a new PPF and everything that goes with it in an attempt to ensure that if something horrible goes wrong, people do not miss a beat, and do not suddenly find that they are facing destitution because their pension has been lost—or, if it is in payment, that it has been stopped. That is an important aim.

I can see that it is necessary to be able to check decisions made by the board—but what have we come up with? When in doubt, this Government reach for the box marked ''Set up a new body'', and they have done that yet again, so we have the reconsideration committee, which will be called upon to consider these matters. I spent some time relaxing over Easter, and I remembered that there was another sinister body, which I think was called the determinations committee; it feels as if the Committee dealt with that eons ago.

What do we know about the people who will be on the reconsideration committee? We know who will not be eligible. This is one of the myriad things that is to be dealt with by regulation, and subsection (5)(c) says that individuals should not be involved

''in giving a reconsideration decision''—

which I assume means that they will not serve on the committee—if they were

''concerned in the reviewable matter in respect of which the decision is to be made''.

That is eminently sensible, and is really a side issue of natural justice.

However, do we need a whole new body? How often would it meet? How many people would be involved? If it met irregularly, how long could the delay be before it made a decision? Would it be convened simply to deal with a particular complaint,

or to deal with a raft of complaints? In my wildest dreams, I do not expect to be shown draft regulations, but we ought to be given some information on this.

Watson Wyatt knows a thing or two about these matters, and it expressed things rather well in the statement that it put out when the Bill was published. It said:

''To some extent, the Bill suffers from the Government's determination to demonstrate its compliance with the Human Rights Convention principle that every person is entitled to a fair and public hearing by an independent and impartial tribunal.''

Who could argue with that?

Mr. Pond: You are about to.

Mr. Waterson: We could argue with it if it took far too long to produce

''a fair and public hearing by an independent and impartial tribunal.''

What we are concerned about was expressed rather well by the hon. Member for Northavon, fresh from his visit to my constituency yesterday.

Mr. Pond: Key marginal!

Mr. Waterson: A top target. I am always a top target—but we soldier on.

These matters must be resolved quickly. ''Justice delayed is justice denied,'' is the old lawyers' saying. Watson Wyatt continued:

''This has led the Government to include exhaustive provisions establishing procedures, reviews and appeal bodies in relation to decisions of both the Regulator and the Board of the Pension Protection Fund.''

To use a hoary old politicians' phrase, there is a balance to be struck; that is always said on such occasions. A balance must be struck between giving people a framework that they can rely on to be fair, impartial, just and all the other good things described by all those 10-dollar words, and giving them a system that will be accessible reasonably rapidly to individuals who are being badly done by—people who, as I have said, might be facing destitution.

I want to probe Ministers a little further about how the system would work. Would it give a full summary decision on a particular reviewable matter? Would it be required to give reasons? It is legitimate to ask questions about such matters. I do not remotely expect to see the draft regulations, or anything like them, but somebody somewhere must be thinking about those issues.

Subsection (4)(d) states that there is a power

''to pay such compensation as the Board considers appropriate to such persons as it may determine''.

That is a broad power, and a sensible one in many ways. However, how can that be appealed? Can it be taken further? Can it be taken to the ombudsman? Does it apply to all those powers?

Subsection (3)(a) is curious. It mentions a ''review decision'', presumably made by the reconsideration committee,

''to be made otherwise than on an application''.

How would that work? My understanding of the whole structure of clause 168 and related clauses is that people who felt that they had been unjustly

treated, for whatever reason—the board had made a wrong determination, had failed to make a determination, or had done what it should not have done, for example—could apply to that shadowy body, the reconsideration committee. That name has a certain ring to it; one could go to the golf club and say, ''I serve on the reconsideration committee of the pension protection fund''—but we will not go into that.

How could a matter come before the RC, as we shall presumably come to know it, without somebody making an application? Could the board shop itself, turn itself in, and say, ''Oh my God, we've suddenly realised that we've been incredibly unfair to Mr. Smith of Acacia avenue in turning down his compensation claim. Stop us before we do it again.'' Is that how it would work?

How could such a matter be dealt with otherwise than through an application by an aggrieved party? Would the Secretary of State get involved? Would somebody have written to the ombudsman directly, and have been referred back to this procedure? I do not know, but I think that the Minister may want to tell us.

There is another interesting aspect in subsection 5(c), about giving notice. It states that the regulations must include provision

''with a view to securing that individuals concerned in giving a reconsideration decision were not concerned in the reviewable matter''.

I have already touched on that, but I want to be clear about what level or type of person would be on the committee. Would they be senior executives working for the board? Would they be outside, totally independent people—non-executives, as it were? Such people could not possibly have been involved in the reviewable matter in respect of which the decision was made in the first place.

The regulations are also supposed to provide a procedure for ''reaching and giving decisions'', and clause 168 mentions the

''rights of interested persons to make representations to the Reconsideration Committee on a reconsideration'',

and so on. Does that suggest that there would be a formal hearing of some sort, perhaps with legal representation? This is getting a bit formalised, even ossified.

If the procedure, which as the note says is only an internal dispute resolution procedure, is to be useful, it should be summary and expeditious and should not be bogged down in complexity. There is always the ombudsman to go to, and presumably none of this would shut people out entirely from their own legal resources if they wished to make an application for judicial review or whatever. That possibility still lurks in the background somewhere, unless the Minister is prepared to argue the contrary.

I have asked a series of fairly detailed questions, and I hope that the Minister will answer them, either now or in correspondence. At the end of the day, what I am saying is that if we are to have the review, the

reconsideration committee and all that goes with it—Opposition Committee members are far from convinced that they will add value to the system—we should make the processes short and summary. We should make sure that the review will move swiftly, so that people can then get on to the ombudsman at the next stage. I hope that in many ways the ombudsman will be much better equipped to deal with such issues. I hope that the Minister will be able to deal with those few points here and now.

Malcolm Wicks: No doubt some of these more detailed points can be considered when we talk about the regulations. Obviously, the balance between having a fair review and appeals system and having some regard to simplicity is difficult to strike. I have no doubt that if we had proposed a much simpler, perhaps one-tier, straightforward, broad-brush system of review, hon. Gentlemen would have argued, perfectly properly, that it was not sophisticated enough. I do not necessarily suggest that the hon. Member for Eastbourne would have argued that, because I would not want to accuse him of inconsistency; he is already sensitive about the idea of being a target, and it is important not to provide ammunition to the enemy.

We envisage a system whereby if there is an allegation of what turns out to be simple error, it will be omitted or put right quickly—within days, one hopes, but we have to consider that carefully. If that does not satisfy the appellant, that admittedly revolutionary body called the reconsideration committee—there is no time to table an amendment to reconsider that title—will go into action. We can promise that in all cases that committee will be speedy, as great matters could be at stake and more information might need to be collected. From then onwards, there is a right of appeal to an ombudsman and, as is usual in such circumstances, on a point of law the matter could go to court. We think that that is a sensible system, but with regulation and with the board's practice we need to ensure that we clearly pursue our objective of doing things as quickly and efficiently as possible.

Mr. Webb: I agreed with the Government on this matter—until the Minister started speaking. The analogy that I had in mind was the social security appeals process, whereby if officials have slipped up they can say, ''Yes, we've slipped up. We'll change it.'' If there is a dispute, people can go to an independent appeal. The Minister seems to be saying that here, there are three stages. There is the ''We goofed and we'll change it'' stage; then there is the reconsideration committee; then there is the ombudsman. I had assumed that this business about reconsideration was simply to give the PPF board the statutory ability to change its mind in order to correct something fairly uncontentious and trivial. However, the Minister seems to be saying that it could do that anyway, and this clause and the process are about something rather stronger than that. These clauses are about the next tier of review, and then there is a third tier. Is that correct? Is that not out of kilter with the social security process?

Malcolm Wicks: I think that we envisage that, wherever possible, the board will resolve a matter internally; one hopes that that will happen in the great majority of cases. It can resolve very simple matters with an official looking at the problem and saying, to use the hon. Gentleman's phrase, ''Yes, we've goofed. Hands up. We'll correct this.'' If that does not satisfy the customer, the issue can go to the reconsideration committee, and one envisages that that would be for the more complex cases, which may or may not take longer. Here, we are talking about internal procedures. In any system, everyone would be reluctant to see a huge flood of cases taken to a more expensive and complicated level, such as the ombudsman, but it is right that the ombudsman structure exists to resolve any matters that cannot be resolved internally. I hope that the hon. Gentleman sees the sense of that.

I must clarify the fact that the reconsideration committee will be independent of the original decision maker. It will be constituted from the board itself, and will therefore be a sub-committee of the board. We will ensure that the reconsideration committee will be able to make decisions as efficiently as possible. I may not have allayed all doubts, but I have set out the broad intention, and I hope that we will have another go at this in more detail in secondary legislation. Although there is a temptation on these occasions to second-guess the minutiae of how the board will operate, given that the board is not yet in operation, we must make allowances for the fact that we will appoint good people to it, who will run their operation efficiently, always guided by the sensible points that have been raised by people on both sides of this Committee and of the House.

Question put and agreed to.

Clause 168 ordered to stand part of the Bill.