Yes, indeed, we are back on money. I shall try again to reassure the hon. Gentleman. We are clear in the intention that the personal accounts should be self-financing in the long term, something that we have already established. However, we know that there will be periods when the scheme will have insufficient revenues to cover its costs. Clearly one source of financing for those costs could be borrowing, which could be from the private sector—the banks or even other pension providers—or from the Government, or a mix of both. We do not know at this point—we could not possibly know—if borrowing will be required. I have touched on the delivery authority’s role in recommending a financing strategy for the personal accounts scheme, and we will have more opportunity to consider it when we reach clause 61.
I reassure the Committee that, if borrowing is required, like any non-departmental public body the trustee corporation will need to comply with existing guidance and legislation to show that value for money for the taxpayer can be achieved. It is important to stress that a decision about how the personal accounts scheme should be financed has yet to be taken. We can only be certain of the right approach when the delivery authority has been given time to finalise the scheme design, develop its procurement strategy and engage with the market, which it can do only when its functions are extended under clause 61. It is vital at this stage that we do not restrict the options for financing the scheme. Doing so would compromise the ability to get value for money for members who are participants in the scheme. By taking away the trustee’s ability to borrow, amendment No. 33 would do just that.
Amendment No. 34 would allow the trustee corporation to borrow and invest, but without the consent of the Secretary of State. As a non-departmental public body, it is normal for functions such as borrowing and investing to require the consent of the Secretary of State. That is because an NDPB’s financial arrangements are to be taken into account in its parent Department’s budgets. Therefore, it is right and necessary that it is subject to scrutiny by its sponsor Department’s Secretary of State. That provides a safeguard to ensure that the wider interests of the taxpayer are taken into account, as well as the NDPB’s objectives. In the case under discussion, the trustee corporation would be responsible for balancing low charges for members against ensuring that the scheme is commercially viable. However, the Secretary of State’s consent is needed to ensure that its actions would not jeopardise the sound management of the Government’s finances.
I ask members of the Committee to note that we have made one exception to that rule under clause 58, which reflects the trustee corporation’s role as sole trustee of the personal accounts scheme. Provision has been made in subsection (5) to ensure that the trustee corporation retains an ability to act independently when acting as the trustee of the personal accounts scheme—for example, with regard to investing members’ contributions to the scheme. In the case of investing, it is clear that that must be the responsibility of the trustee acting in the members’ best interests.