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Pensions Bill

The Government made a statement on 14 April that the principal amendments that they were seeking to make to the regulator’s anti-avoidance powers would be introduced with effect from 14 April 2008. Retrospective legislation is rarely introduced unless it is for very good reasons. It was crucial that the Government’s announcement of their proposals did not prompt the kind of market behaviour that they are attempting to address before the legislation came into effect. I understand the concern that the Government’s amendment would allow wide-ranging retrospective changes. This is a serious point and I should like to share in more detail how we intend this power to operate. The power operates in accordance with the general law and, in particular, can be exercised only in a way that is compatible with the European Convention on Human Rights. This means that the Government, or future Governments, could make retrospective provision only if they had already announced their plans, in the way that we did in April this year. The power, therefore, is not as wide as it might first appear. It provides for retrospection, but only in relation to novel situations of material risk, and consultation would be required before the power could be used to introduce changes. The noble Lord’s amendment would mean that, should it be necessary to amend or correct the original regulations for whatever reason, that could not be done from 14 April 2008, which would create the very risk that, in our view, should be mitigated. That would compromise our ability to ensure that we get the balance right between adequate protection and not hindering legitimate business activity. I hope that that clarifies matters for the noble Lord, because I acknowledge that he is concerned about the issue.