Clause 174 - Investigation by PPF Ombudsman of complaints of maladministration

Pensions Bill – in a Public Bill Committee at 2:30 pm on 20th April 2004.

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Photo of George Osborne George Osborne Shadow Minister (Treasury) 2:30 pm, 20th April 2004

I beg to move amendment No. 537, in

clause 174, page 111, line 38, at end insert—

'( ) To assist him in an investigation, the PPF Ombudsman may obtain advice from any person who in his opinion is qualified to give it and may pay to any such person such fees or allowances as he may determine.'.

I said earlier that I would talk about the Pension Schemes Act 1993. The amendment would give the PPF ombudsman the powers given to the pensions ombudsman in the 1993 legislation. It must be said that there is a striking difference between the Bill and previous legislation on the subject. To be honest, I stumbled across that only when I was preparing for the Committee. That striking difference is borne out by clause 174, which leaves the Government to determine by regulation an enormous range of investigatory powers that the PPF ombudsman should have.

If one reads the 1993 Act, as I am sure that members of the Committee did in preparation for these proceedings, one will have been struck, as I was, not having been a Member of this place at that time, that it spells out the powers of the ombudsman. It does not leave them to regulation, but sets out clearly what they will be. Amendment No. 537 replicates the powers that are spelt out in section 150(6) of that Act, which give the pensions ombudsman the power to

''obtain advice from any person who in his opinion is qualified to give it and may pay to any such person such fees or allowances as he may with the approval of the Treasury determine.''

I have attempted to insert similar wording in the Bill, because it is important to establish in the legislation what the powers of the new ombudsman will be. There is no good reason not to, since a previous Government and the officials who drafted the legislation 11 years ago—some of whom, probably, are working on this Bill—decided then to put into that Bill the powers of the pensions ombudsman. Now, when the new powers for the PPF ombudsman are being drafted they leave it all to regulation under clause 174.

The clause seems symptomatic of a growing desire to leave everything to regulation and statutory instrument, rather than spelling out in the legislation what are substantial powers. I know that at various stages of the passage of this legislation we have discussed clauses that give the pensions regulator various powers. However, we are talking about substantial powers to, in some cases, enter premises and, in this case, commission advice and pay for it out of taxpayers' money. It is sensible to make clear in the legislation what we are seeking to do. I cannot see how the Government could object to the amendment, since it merely replicates the powers that the pensions ombudsman has under the 1993 Act. However, no doubt the Minister will tell me why he cannot accept it.

Photo of Mr Chris Pond Mr Chris Pond Parliamentary Under-Secretary, Department for Work and Pensions 2:45 pm, 20th April 2004

I am pleased that the hon. Gentleman is sitting down, because he is about to get another shock—something that will be unsettling. I accept the principle of the points that he made. The PPF

ombudsman must have the information necessary to carry out his or her investigations.

Section 150 of the 1993 Act, to which he referred, makes practical provision for the pensions ombudsman to obtain and pay for expert advice that would assist an investigation. The proposed amendment in relation to the PPF ombudsman is sensible but unnecessary. Clause 174(2)(h)(iii) provides that the PPF ombudsman may consider ''expert evidence'' when investigating maladministration cases. Subsection (2)(j) states that he may pay

''the costs or expenses of prescribed persons''.

Similar provisions in clause 173 apply when the ombudsman is investigating reviewable matters. The persons whose costs he may pay will include qualified persons who provide expert advice or who attend an oral hearing of the PPF ombudsman. For example, that may encompass actuaries, pension lawyers and insolvency experts.

The hon. Gentleman raised the important question why we have so many regulation-making powers in clauses 173 and 174. He made a cross-reference to the 1993 Act, in which rather more was included in the Bill than in regulation. I think that he would accept that we are talking about different roles and that clauses 173 and 174 set out the regulations—the detailed procedures—such as who can request a review by the PPF ombudsman, how such reviews are to be made and the time limits for doing so. We believe that it is sensible to allow the flexibility of making such provisions in the regulations, rather than putting them in the Bill, given that we are dealing with an ombudsman who will oversee the operation of a body that my hon. Friend the Minister described this morning as a unique institution, and that does not exist in any recognisable form at the moment.

Although I accept in principle many of the points that the hon. Gentleman has made, I ask him to withdraw the amendment, on the basis that it is not needed to achieve the objectives that he and I would like to see met.

Photo of George Osborne George Osborne Shadow Minister (Treasury)

I knew when I tabled the amendment that the Under-Secretary would accept it in principle, because it is about perfectly reasonable powers that I am sure will be made under the regulations. I was trying to highlight the fact that in 11 years there has been a change in the way in which legislation is brought forward.

I do not accept the Under-Secretary's argument—I cannot believe that he really accepts it—that the PPF ombudsman would be a fundamentally different beast from the pensions ombudsman. When Parliament created the pensions ombudsman, that was a unique, first-time-ever role. Arguably, the pensions ombudsman faces a much broader range of issues and more complex issues, as he often deals with private sector pensions as well as public sector bodies. At least the PPF ombudsman is just dealing with one organisation: the PPF.

I do not accept the Under-Secretary's case that there is a fundamental difference between the two ombudsmen. In 1993, Parliament saw fit to put all these powers into a Bill. Now we find that Parliament

is giving the Government pretty general powers to regulate. That is a point often made in Standing Committees by Opposition spokesmen of whatever party is in opposition at the time. However, that distinction was a striking example. I have made my point, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 174 ordered to stand part of the Bill.