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Pensions Bill

I thank the noble Baroness, Lady Noakes, and the noble Lord, Lord Skelmersdale, for providing this opportunity to discuss the extent to which the Secretary of State should consider conflicts of interest when determining the suitability of individuals to serve as executive members of the authority. As drafted, the Bill requires the Secretary of State to satisfy himself about the independence of the chairman and other non-executive members of the delivery authority. These amendments would extend that requirement to include executive members. Executive members will, of course, be public sector employees of the authority. As such, they will be subject to the usual rules on proper conduct that apply to all public sector employees. In addition, Schedule 6 requires an executive member to declare any conflict of interest at meetings of the authority or any of its committees or subcommittees. Such a declaration is required to be minuted. We believe that these requirements are sufficient to provide the effective and necessary safeguards that these amendments seek to achieve. The position of the chairman and non-executive members is different. They will not be employees of the delivery authority and therefore, unlike the executives, will not be public sector employees.They may hold other directorships that would be considered to prejudicially affect their actions as members of the authority. Clearly, that needs to be considered by the Secretary of State when making such appointments. Schedule 6 has been carefully drafted to take account of that distinction. I can assure noble Lords that in recruiting both executive and non-executive members we will follow all appropriate guidance, ensuring that all appointments are properly considered and scrutinised. I turn now to the important issues raised by my noble friend Lady Gibson. Amendments Nos. 93A and 104B seek to ensure that being a member of a scheme is not taken to be a conflict of interest for the purposes of the disqualification provisions. Member representation will be crucial to the success of the pension scheme. My honourable friend the Secretary of State made clear our intention to create a members’ panel. Our response to the White Paper consultation, to be published shortly, will set out further details. The delivery authority established in this Bill will be charged with providing advice to the Secretary of State on the practical and commercial implications of various options that may be considered for personal accounts. At this stage, there will be no scheme members, as the delivery authority is not charged with running the scheme. These amendments do not have the practical effect that my noble friend perhaps intended, although I appreciate the importance of this debate. We are in agreement with my noble friend on the purpose and necessity of taking into account the interests of scheme members, but we do not think it appropriate to include them in the Bill. Given that reassurance, I urge the noble Baroness, Lady Noakes, the noble Lord, Lord Skelmersdale, and my noble friend Lady Gibson not to press the amendments in this group.