---

Pension Protection Fund (Pension Compensation Cap) Order 2008

Indeed we will see, but Chancellors’ predictions since 1997 have been pretty good. Let us look at the record. We have had a period of continuing growth under this Government that is unprecedented. However, perhaps we should debate these issues on another occasion. The noble Lord, Lord Skelmersdale, asked about the relative proportions of the risk-based levy and the scheme-based levy. I have a schedule which I am struggling to locate, so perhaps I will move on to another point while my officials find it for me. The noble Lord asked about the assessment process and whether things were proceeding as quickly as we would want. The PPF is broadly in line with the business plan for completing assessments, and the government target for schemes to wind up is two years. Obviously, there are often complex legal issues associated with these processes, but the assessment process is in line with expectations. On the previous point, on the basis of the levy that it was sought to collect for 2007-08, the figure was £675 million in total, of which the risk-based component was 80 per cent of £540 million, and the scheme-based element was 20 per cent of £135 million. I do not have the latest figures on how much of that has been collected, but for levy year 2007-08, 6,786 invoices have been issued, to a value of £476.1 million, and £334 million has already been collected for that levy year. In terms of collections, I am not sure whether it is easy to identify which component of the levy it is, but I will have a look at that and write to the noble Lord if that would help. The noble Lord, Lord Kirkwood, asked whether Gershon applied and what was happening to staff numbers. We expect staff numbers in the PPF to stabilise. Clearly, in the early years there was a progression in administration costs as the set-up was put in place, but we are approaching a time when it can be stabilised, and that is what is expected in terms of staff numbers. The noble Lord asked about powers to reduce compensation. There are several powers to reduce compensation in extremis following the recommendations of the board and consultation. I stress that we do not anticipate any immediate need for those powers to be exercised; but they are clearly an important safeguard and the noble Lord made a fair point on that. The noble Lord also asked about the number of levy payers and what will happen if that falls. Currently, there are about 7,800 levy payers but only 50 schemes in the PPF. The PPF will consult in the summer on the future of the levy, including ensuring that the levy is sustainable and fair. The noble Lord also asked about administration costs, and I think that he was trying to reconcile the various figures that were floating around. It may be helpful if I set that out as follows. For the current year, the expenditure in terms of routine resource costs was £17.7 million, with a PPF start-up cost of £3 million, so the total expenditure was estimated to be £20.7 million. There was a deficit carried forward from the previous year of £1 million, and the levy receipts were £19 million, and that leads to a deficit at the end of the current year estimated to be £2.7 million. If you project that forward over the next three years, the resource costs for 2008-09 are expected to be a smidgen under £20 million, at £19.9 million. If you take account of the deficit that must be funded, the £2.7 million, there will be a deficit at the end of next year of £0.6 million, but with a £22 million levy for next year. On the basis of three years of levy at £22 million, at the end of that three-year period a small surplus should arise. I hope that has put the matter in context. The noble Lord, Lord Skelmersdale, asked about Northern Ireland, and he confirmed that he was aware of and understood the process that I outlined. We have dealt with the issue about the risk-based levy and the scheme-based levy. The noble Lord, Lord Kirkwood, asked what would happen if there was a downturn and whether that would affect the levy. The size of the levy estimate will be limited by the levy ceiling, which is an important safeguard that has been agreed by Parliament, which is why we have it before us tonight. The PPF can reduce the levy estimate if necessary. The noble Lord asked about scheme data. The Pensions Regulator has a team that is dedicated to improving the administration and governance of schemes. Most members are in large, well-run schemes, but again we need to be ever vigilant to ensure that scheme data are good and robust. I believe that I have answered each of the questions that have been asked, although the noble Lord, Lord Skelmersdale, looks as though he will challenge me on the basis that I have not. Perhaps I should ask him to do so.