---

Pensions Bill

It may help the Committee if, like the noble Baroness, Lady Noakes, I set out briefly our general attitude on these Benches to the amendments and issues. First, I thank my former colleague the noble Lord, Lord Lucas, for the thoughtful way he spoke to the amendment. It reminded me of how much I used to enjoy working with him at Warburg’s 30 years ago, looking at balance sheets and making investments. Like the noble Baroness, I have had representations from industry, particularly the CBI and the private equity industry; it calls itself the BVCA, but private equity is what basically matters in this context. I also had a helpful meeting with the Pensions Regulator and discussed the issues. We on these Benches agree very much with the statement of principle that the Minister made on behalf of the Government just now about not weakening the employer covenant and standing behind pension schemes. In general, we support his approach of looking at the effect and not necessarily the intent of what has been done. Having said that, as the noble Lord, Lord Lucas, said, serious work needs to be done over the summer so that we are much more specific, much clearer and much firmer than where we are today. I have a strong feeling of déjà vu here. I had a little trip down memory lane with the noble Baroness, Lady Hollis, over supper; I well remember that we had an exactly similar situation in 2004 when serious worries were expressed. Then good work was done over the summer and, as a result, we ended up with a settlement between industry and the Pensions Regulator that has worked well so far. I very much encourage the DWP to look again at the model and take it seriously. The CBI accepts the logic for action that the Government have set out—that uninsured pensions providers did not exist in 2004 when the regulator’s powers were set out. I worry a great deal. The potential risk from the large buyouts is great and we are in uncharted territory. Further powers are needed. Equally, we do not want to leave everything to secondary legislation. The Government must do more work in thinking that through. The BVCA’s statement contains some echoes of the grave concerns—to say scare stories would be putting it too strongly—expressed by people in that industry in 2004. The impression was given that it would be almost the end of private equity transactions as we knew them. Since then, of course, there has been the most enormous private equity boom that there has ever been in this country. Therefore, I take the warnings with a pinch of salt, but it is perfectly reasonable that those people want to know more clearly where they stand. In particular, it is absolutely right that there should be a full regulatory impact assessment in good time. It is all very well for the Government to say that the costs will be negligible, but they are assuming what they have to prove by having a regulatory impact assessment. If they are right, the whole point of doing that is to show that people have nothing to worry about. I have provided a general flavour of where we stand. As in 2004, we thought that some of the warnings from the private equity industry were overdone, but it is perfectly reasonable that there should be more clarity and that we should not effectively be giving a blank cheque through secondary legislation. We would be very happy to be involved in discussions over the summer as I have some experience of these matters. We have good will to what the Government are trying to achieve, but they must try a lot harder.