Clause 107 - Sanctions for avoidance of employer debt etc

Pension Schemes Bill [Lords] – in a Public Bill Committee at 2:00 pm on 3rd November 2020.

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Photo of Laurence Robertson Laurence Robertson Conservative, Tewkesbury 2:00 pm, 3rd November 2020

Before we resume our scrutiny, I remind Members to maintain social distancing. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.

I understand that there was some uncertainty about the effect of the grouping of amendments with clauses 107 to 117 stand part. I have therefore decided to exercise the Chair’s right to amend groupings, and I am grateful to the Minister for his flexibility. Once we have disposed of amendment 20, I will allow a debate on clause 107 stand part, with which it will be convenient to debate clauses 108 to 116, schedule 7, clause 117 and schedule 8. Mr Gray, do you wish to move amendment 20?

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

Photo of Laurence Robertson Laurence Robertson Conservative, Tewkesbury

With this it will be convenient to discuss the following:

Clauses 108 to 116 stand part.

That schedule 7 be the Seventh schedule to the Bill.

Clause 117 stand part.

That schedule 8 be the Eighth schedule to the Bill.

Photo of Seema Malhotra Seema Malhotra Shadow Minister (Work and Pensions) (Employment)

I am grateful to be able to make some comments about clause 107. This morning’s debate gave us the opportunity to put on the record some of our thoughts and to acknowledge our support for part 3 of the Bill. There has been some debate, and I seek some further assurances from the Minister.

On the role of the Pensions Regulator, we support strengthening the existing sanctions regime with the introduction of new criminal offences and higher penalties for wrongdoing. The pensions landscape has been troubled in recent years by scandals, including the BHS and Carillion scandals, which have had catastrophic consequences for the scheme members involved. My right hon. Friend the Member for East Ham and my hon. Friend the Member for Wallasey also made that point. The Minister made the important remark that callous crooks who put at risk other people’s pensions cannot be allowed to get away with it.

It is right that those who intentionally or knowingly mishandle pension schemes or endanger workers’ pensions face severe penalties, which is why we wholeheartedly support the relevant provisions in the Bill. The only note of concern is the scope of the provisions, and I refer to the very helpful and instructive debates in the other place on that issue. We are firm in the view that the offence must apply to unscrupulous employers or directors of companies, but there is fear that it is so wide in scope that pretty much anyone involved in the management of a pension scheme could be exposed to sanctions, including third parties such as advisers, banks and even trade unions. Colleagues from the SNP have made some of those points effectively.

Government representatives have assured us that the courts will have the necessary discretion to ensure that only those who have genuinely been involved in wrongdoing will be caught by the new offences, but I note that pensions lawyers have realised similar concerns to those that we are raising today. It would be helpful to have further confirmation, following the Minister’s comments this morning, of whether there are further plans to review whether the offences work as intended or whether there are any other unforeseen consequences.

Photo of Guy Opperman Guy Opperman The Parliamentary Under-Secretary of State for Work and Pensions

Welcome to the Committee, Mr Robertson. We hope that we will be well behaved under your chairmanship.

I take the hon. Lady’s points on board, and I will repeat, as if I said them all, the comments that I made in respect of amendment 20. I stress that subsection (2)(c) sets out a complete defence to any particular assertion of wrongdoing, namely the

“reasonable excuse for doing the act or engaging in the course of conduct”.

The hon. Lady talks about the future. The regulator, who has rightly been much talked about today, is very mindful of the debates in Parliament and of what is said in this place and the other place. I have discussed the ongoing regulation, and the fact that we are going to have to introduce further regulation on these particular clauses and set out the guidance in more detail. I hope that will reassure her that the comments have been taken onboard and that we are not using a sledgehammer to crack a nut.

We all accept that there are grave and serious incidents, such as those that happened with BHS, Carillion and others, but we also want to ensure that the pensions system functions in a fair way. The hon. Lady will also be aware that, as always, all powers are kept under review. It is certainly my hope that we will introduce another pensions Bill before too long. As with any matter, were there to be any disagreement about the implementation, we can always revisit that.

Photo of Neil Gray Neil Gray Shadow SNP Spokesperson (Work and Pensions)

Obviously we have missed out on the amendments tabled alongside the Institute and Faculty of Actuaries. Between now and Report, will the Minister commit to discussing with some of those stakeholders, such as the IFoA, and with us, to lay out how he can allay the fears of stakeholders, if he cannot allay ours?

Photo of Guy Opperman Guy Opperman The Parliamentary Under-Secretary of State for Work and Pensions

As always, I am delighted to discuss with anybody. There is no doubt that we have done huge amounts of discussion and engagement already. My approach would normally be to set out in writing, as a preliminary, what I feel the position is and how we can provide the assurances, and discuss them off the back of that. At any stage, any parliamentarian is perfectly entitled to engage with the regulator and discuss their concerns, because it will be for the regulator to issue the guidance following Parliament passing the Act. I am sure that we can address the point being made.

Question put and agreed to.

Clause 107 accordingly ordered to stand part of the Bill.

Clauses 108 to 116 agreed to.

Schedule 7 agreed to.

Clause 117 ordered to stand part of the Bill.

Schedule 8 agreed to.