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Pension Protection Fund (Pension Compensation Cap) Order 2007

I did not mean to be grudging and I apologise to the noble Lord if it came across that way. I was about to say I am delighted that he resisted the temptation to talk about payable tax credits, and I shall certainly resist the temptation to remind him that the change in the rules relating to payable tax credits was accompanied by a reduction in the main corporation tax from 33 per cent to 31 per cent in 1997 and a further reduction thereafter. I shall refrain from doing other than reminding him of a quote from Anatole Kaletsky in the Times of19 October 2006: "““Anybody with a thorough understanding of pensions knows that Mr Brown’s ““tax raid”” was not the root cause of the industry’s demise. Occupational pensions and life assurance were destroyed by foolish court judgments and well-meaning but misconceived regulations under the Thatcher and Major governments. The so-called ““tax raid”” was actually supported by most business leaders and tax experts, since it paid for a three percentage point reduction in corporation taxes and simplified the corporation tax system in exactly the way the Tory tax panel is expected to recommend””—" as I think it did— "““in its report to David Cameron today””." I note that we will be returning to this interesting topic when we debate the Pensions Bill in due course. Both noble Lords asked about appealing the High Court’s decision in relation to the ombudsman’s report. We have appealed the finding of maladministration because the judgment raises important constitutional issues that need to be resolved. This appeal willnot prevent us reconsidering the ombudsman's recommendation with regard to compensation in line with the High Court's direction. We have real sympathy for people who lost their pension when their schemes went into wind-up and appreciate that they need to know where they stand. The Secretary of State said on 27 February in another place that his aim is to return to Parliament with conclusions and proposals before the end of proceedings of the Pensions Bill. That remains the case and will not be affected by the outcome of the appeal. I hope that that answers that question. It was asked whether we will be merging any of the Pension Protection Fund functions with the FSA or the ombudsman. Paul Thornton is carrying out an independent and transparent external review of the functions of the pensions institutions at the request of the Government. Part of that process is seeking views and encouraging debate in the area. We will consider his findings when he provides a final report to Ministers in spring 2007. At this point, nothing is ruled in or out and no decisions have been taken.