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Pensions Bill

moved, as an amendment to Amendment No. 130EW, Amendment No. 130EX: 130EX: Before Clause 107, line 8, at end insert— ““collectively referred to in this section as ““relevant notices””)”” The noble Baroness said: The amendment is in the name of my noble friend Lord Lucas. It is a simple amendment defining relevant notices. I have Amendment No. 130FK in this group. Before speaking to it, I shall say a few words about the overall issues addressed by Amendment No. 130EW. This is a far-reaching amendment which has been introduced late in the day and hence was not included in our Second Reading debate. Therefore it is important that we examine the broad issues as well as the detail of the amendment. In addition to Amendment No. 130FK, which amends Amendment No. 130EW, I have added my name to the majority of the amendments in the name of my noble friend Lord Lucas, which seek to amend the Government’s amendments. Most of my noble friend’s amendments are amendments to Amendment No. 130EW, but I fully support my noble friend in degrouping them from this group. While that may make our proceedings a trifle more complex, it is important that we have an opportunity to debate the particular issues that my noble friend’s amendment addresses. The Minister has spoken to his Amendment No. 130EW. He will have an opportunity to press it in due course, although I suspect not today. I hope that we will be able to persuade him by these debates on the amendment and the series of amendments tabled by my noble friend, that it would be better if he did not press his amendment in the Committee. That would allow the Department for Work and Pensions to pursue serious discussion about the form and content of alterations to the regulator’s powers during the summer and early autumn, and I hope that the Government could return on Report with an amendment which has more support in the commercial world than this one does. We have received briefing on Amendment No. 130EW from a large number of organisations, such as the CBI, the British Venture Capital Association and the Society of Turnaround Professionals, as well as professional firms which are active in providing advice in respect of pension issues, such as PricewaterhouseCoopers. These organisations fully accept that, as we do on these Benches, the interests of members of pension schemes need effective protection in law. However, the united opinion from those organisations is that Amendment No. 130EW goes beyond protection of members and is in fact capable of inflicting real harm. Noble Lords may have seen a letter in the Financial Times on 9 July, signed by the British Venture Capital Association, the Association of Chartered Certified Accountants, the Society of Turnaround Professionals and the Association of Consulting Actuaries. I will quote a couple of bits from that letter. They express concern that these measures will damage Britain’s competitiveness and further undermine its reputation as an attractive place to do business. They report that these moves have already caused many deals to be aborted and stopped further ones from happening, and say that lawyers are giving explicit legal advice against investment because of these changes. My Amendment No. 130FK says that regulations must not be made under the new clause introduced by Amendment No. 130EW until a regulatory impact assessment has been laid before Parliament and approved. As I said earlier, Amendment No. 130EW has been introduced at a late stage in the passage of the Bill and it has not been considered in another place. The amendment has no regulatory impact assessment attached to it, and of course it was not included within the original regulatory impact assessment. Hence the Government have not laid out the evidence of need for this amendment, they have not set out alternative courses of action and have given no estimate of cost for the private sector or for government. The Government’s consultation suggested that an RIA was not necessary because there would be a negligible impact on the private sector, but the respondents to the consultation challenged that and called for an RIA. They believe that the costs will be great at a macro level in discouraging corporate transactions, wherever a defined benefits scheme is involved. Also, they believe that if transactions proceed they will be driven into the necessity of clearance procedures which are costly and time-consuming. The Government issued a consultation paper on new powers for the regulator on 25 April. That consultation ran for eight weeks instead of the usual three months, notwithstanding that the Government acknowledged that the issues are complex. There is a sense that this is being rushed through without proper consideration. Indeed, the Government produced this amendment only a few days after the end of the consultation. The Government have not published the responses to the consultation. Instead, the Government said that there is, "““an emerging consensus that legislative change is necessary””." I believe that if the Government publish the responses, it would be plain to all that there is no such consensus, and certainly no consensus as to the content of Amendment No.130EW. There is a clear view from submissions to the Government that I have seen that, if some further powers are required—and there is doubt about that—the answer does not lie in the sweeping powers that the Government are seeking, but in more targeted ones. Those who read and responded to the consultation document thought that they were considering some fairly well defined proposals for an extension of the regulator’s powers. There was no suggestion at the time that the Government were consulting on taking some wide and unconstrained powers to rewrite the legislation in perpetuity. If any consensus can be detected, it might be about the elements of the specific proposals put forward in the consultation document. There is no consensus about these wide powers because they simply were not exposed to consultation. I know that the Minister will seek to assure us, as he has partly in his opening remarks, that the regulations will be targeted. The fact remains that the powers are extraordinarily broad and should be more narrowly drawn. We do not have an amendment in this group that redrafts the powers by reference to the specific situations set out in the consultation document. This is the basis of one solution that, for example, the CBI would like to see—although the list in the consultation is not without controversy and goes way beyond the non-insured buy-out model that initially led to concerns. Nevertheless, I know that the various organisations to which I have referred would be happy to work with the Government to achieve a more tightly drawn power if the Government were prepared to go down that route. For now, I shall leave my noble friend Lord Lucas to speak to his detailed amendments in the group. However, I may contribute to the Committee later, depending upon how our debates progress. I beg to move.