Clause 41

Pensions Bill – in a Public Bill Committee at 5:00 pm on 29th January 2008.

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Powers to require information and to enter premises

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

I beg to move amendment No. 150, in clause 41, page 17, line 31, after ‘such’, insert ‘reasonable’.

I noted a curiosity in clause 41: “reasonable” appears in subsection (3)—new subsection (A1)—relating to the power to enter premises. That must be at a “reasonable time” for an employer. We would all accept that as sensible. Therefore, I was curious and a little concerned as to why in subsection (2), under paragraph (b) of new subsection (1A), people may be required

“before the Regulator at such time and place as may be specified”.

We all know that the Pensions Regulator has a good record so far. It has not behaved in an out-of-hand manner. There is always a possibility that has to be guarded against, that perhaps at some future time employees of the Pensions Regulator might be so exasperated by one employer that they might place demands—of when and where someone come before them—that were not reasonable. Only a small point, but this will be the law of the land when it goes through. “Reasonable” appears further on in the clause and could usefully be in the subsection I have indicated.

Photo of Paul Rowen Paul Rowen Shadow Minister, Work & Pensions 5:15 pm, 29th January 2008

I just wanted to ask the Minister whether there is a discontinuity between subsections (1) and (2) and subsection (3), and between the compliance regime in the Bill and provisions in the Pensions Act 2004. In particular, I picked up on the word “inspector” in subsection (3). Everything before that point is talking about the regulator, the regulator requiring information and compliance notices being issued—all very light touch—and yet in subsection (3) the Bill suddenly goes back and uses parts of the 2004 Act, talking about regulators and entering premises, all of which implies a heavy gang from Her Majesty’s Revenue and Customs suddenly turning up to grab the records to find out why somebody has not been paying. That is at variance with what this chapter is attempting to do in terms of getting a light-touch compliance regime that is easy to operate and which has penalties that are easy to understand.

Rather than using sections of the 2004 Act, should we not ensure that those are amended to be more in tune with the rest of the Bill? Subsections (1) and (2) seem different from what has been proposed beforehand. Who are the inspectors? That is not the language that is used elsewhere in the Bill.

Photo of James Plaskitt James Plaskitt Parliamentary Under-Secretary, Department for Work and Pensions

I appreciate hon. Members’ contributions. The short answer, on which I shall expand a little bit more in a moment, is that clause 41 makes alterations to the 2004 Act and therefore incorporates the same language and terminology in it. We cannot revisit that Act. The simpler way of inserting into the Bill the essential powers that we must have is to take them from the 2004 Act. However, the two powers in the clause should be regarded as backstop powers to be used for extreme  purposes, where there is non-compliance. They have to be included because not to have them would leave the regulator disarmed in certain circumstances and I do not think that the Committee would want that to be so. As I have just outlined, clause 41 amends section 72 of the 2004 Act. The amendment would force the regulator to ensure that such meetings as are indicated take place at a reasonable time and place.

I recognise the intention of the amendment and understand the principle behind it, but it should be remembered that the regulator will require people to meet it only in exceptional circumstances. If the regulator is of the opinion that an employer is not complying or may not comply with their duties, it will need the appropriate powers to conduct further investigations. It will also need sufficient flexibility in the legislation to be able to implement processes that will ensure that it meets its objectives in an effective and efficient manner.

Inserting the word “reasonable” where the amendment would insert it could make the powers unworkable. It is almost certain that instances will arise in which there are differences of opinion between the regulator and the person required to attend about what is a reasonable time and place to meet. We do not want to hinder those important powers. I hope that with that explanation the hon. Gentleman will agree to withdraw the amendment.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

These things are always more complicated than they appear on the surface. I heard the Minister’s explanation. There could be a counter-argument that might prevent the powers being inserted into the 2004 Act.

I just hope that the Minister takes my general point that we expect the powers that are given to the regulator to be exercised in a reasonable manner. Requiring someone to appear at 7 in the morning would clearly be unreasonable. Requiring them to appear somewhere far away from their business location would be unreasonable. I hope that those concerns will be in the minds of the regulator and the Government when the provisions become law.

We know that the intentions will be good, and that the regulator has a good record. However, given the wide scope of the Bill, there is concern about whether businesses will be treated fairly. I detected that that was the intention behind what the Minister said, and I hope that we do not have cause to revisit this area.

On the basis of what I have heard, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 41 ordered to stand part of the Bill.

Further consideration adjourned.—[Mr. David.]

Adjourned accordingly at twenty-one minutes past Five o’clock till Thursday 31 January at half-past Nine o’clock.