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Pensions Bill

Schedule 1 sets out the provisions in relation to the non-departmental public body, the trustee corporation, created under Clause 65 to run the personal accounts scheme. The amendments in the name of the noble Baroness, Lady Noakes, relate to the appointment, removal and remuneration of members of the trustee corporation as she has explained. First, I should explain that all the appointments in the initial period will be ministerial and so must be made in accordance with the guidance issued by the Office of the Commissioner for Public Appointments. This guidance ensures that appointments to public office follow a fair, open and transparent process. We want the trustee corporation to be given as much freedom as is reasonable for a public body, to get on with the job of running the scheme. So, from the end of the initial period, the trustee corporation will be responsible for recruiting its own members as and when vacancies arise. Amendment No. 112D requires the Secretary of State and the corporation itself to consult with the chair of the corporation when making appointments. During the initial period, the Secretary of State will consult with any previously appointed members of the trustee corporation on new appointments. This membership would include the chair of the corporation. As a sole corporate trustee, all members of the trustee corporation will have an equal voice and equal weight in decision-making. Each member is a valued participant in the administration of the scheme. The chair does not have a greater say than other members, a distinction from the role of chair that one would often see. When responsibility passes to the corporation, it is important that the corporation as a whole satisfies itself of the suitability of the potential appointee. This would, of course, automatically include the chair of the corporation. Amendment No. 112G relates to the length of the initial period. At this point we do not have all the detail for the preparation of the recruitment timetable. The delivery authority will advise us on this process in due course. We need to consider advice before making a final decision. There may be good operational reasons for it to be longer than 12 months, but equally it may be less. Our intention is that the initial period will not be any longer than is absolutely necessary, and in any event will end at the latest by the time the scheme opens for business in 2012. Amendment No. 112P relates to the ability of the Secretary of State to remove a member of the trustee corporation from office. As the sponsor of a public body, the Secretary of State has a responsibility not only to the public, but to Parliament. The ultimate responsibility, to ensure that the provisions agreed by Parliament are carried out via the corporation, remains with the Secretary of State. Therefore, it is right that the Secretary of State must be able to assure himself and, if necessary, Parliament that the members of the trustee corporation remain suitable for their position of trust and responsibility. This is not a power to be used lightly. Although the power seems wide, it would be used only in exceptional circumstances. It is usual practice to include this power in legislation when establishing a non-departmental public body. Amendment No. 112R would remove the Secretary of State’s ability to determine the level of remuneration of members of the trustee corporation. Although he would have to be consulted, no consent would be required. It is normal practice for the Secretary of State to set remuneration in relation to senior public appointments. The Secretary of State himself may not be particularly well versed in market rates, but he would take appropriate advice. The funding for the trustee corporation, including trustee remuneration, will come from charges to the scheme members. So although the corporation will be self-financing, the Secretary of State will retain an interest as Minister for the sponsoring department and the settlor of the scheme. This amendment would, in effect, leave the trustee corporation to determine its own levels of remuneration. That would be a highly unusual situation and one that could open the members of the trustee corporation to accusations of feathering their own nests. We of course doubt that this would happen but, in such an important matter, even the appearance of preferential treatment would be damaging. I hope that has been helpful to the noble Baroness. I have explained each of the points about which she had concerns and I hope she feels able to withdraw her amendment.