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Pensions Bill

The noble Lord has drawn attention in these amendments to the important roles played by insolvency practitioners, turnaround specialists and other ““company doctors””. We do not have a problem with venture capitalists: they play an important role in our financial system. However, I would just note again that an association is seeking to roll back some of the powers that we are seeking to take. The Government agree that practitioners acting competently and clearly in line with their duties should not fear later sanctions. Although we recognise that in turnaround and insolvency situations there are hard choices to make, it would be wrong to enable parties to satisfy their other unsecured creditors by avoiding their obligations to pension schemes. However, it would also be wrong for regulations aimed at protecting pension schemes to stymie sensible transactions that treat all parties fairly and equitably. That is why the current legislation already provides a specific safeguard for insolvency practitioners. This protection was established in the 2004 Act as insolvency practitioners have a statutory duty to ensure that they treat all creditors fairly and equitably. No such duty is placed on company doctors, who do not normally owe any duty to creditors. They are not defined in law and it is not clear who might claim protection under this provision. I must add that there is no evidence that the current regulatory regime inhibits turnaround specialists, and we do not intend that our proposals in Amendment No. 130EW would change that. We certainly do not intend to remove the current specific safeguard for insolvency practitioners. Furthermore, there are already a number of important safeguards in existing legislation that apply to the regulator’s use of its anti-avoidance powers. These work well and provide protection for those involved in turnaround situations. As a public body, the regulator is required to act reasonably. In addition, there are specific requirements in statute, to which we referred when discussing earlier amendments. Significantly, decisions to use the power to issue a contribution notice are made not by the regulator’s investigating arm but by its determinations panel—a body that is separate from the investigating team. The panel will review evidence and provide opportunity for representations from relevant parties. I hope that those remarks will offer the noble Lord some reassurance. As I said, clearance procedures are available in turnaround situations as well. I recognise that there are speed issues in some of these situations, but I am not aware that that has been an issue in preventing people getting clearances where appropriate. I think that the issue is the lack of a definition of who would be included and differentiating those from insolvency practitioners, who have clear statutory duties in how they treat creditors. That is why there is protection for them and why we think it would be wrong to widen that in an undefined way.