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Pensions Bill

Clearance is the voluntary process for obtaining from the Pensions Regulator a clearance statement, which gives an assurance that the regulator will not use its anti-avoidance powers in relation to the event in the application. That assurance would remain in place but, quite properly, the regulator would not be bound by such a statement if the circumstances were materially different from the content of the application. There are already safeguards in Sections 42 and 46 of the Pensions Act 2004, and I can assure the noble Lord that we have no plans to change the clearance process. I agree with the implication by the noble Lord’s amendment that clearance has been a successful process. It has been a key element in providing clarity and certainty for the industry. It has enabled the delivery of good regulation, with minimum intervention and use of powers, as well as the promotion of good behaviour and practice. The regulator has operated this system effectively since its inception, and has received positive feedback from its industry stakeholders. There is no intention to change that. I trust that the noble Lord takes reassurance from that expressed intent. The amendment may inadvertently endanger that element of legislation. It gives new conditions under which a clearance statement would fall away or not bind the regulator, different from those conditions already set out in the 2004 Act. Adding new conditions that would apply only to those provisions newly inserted by regulations made under the power could create confusion. In addition, given that under the amendment the protection of clearance will stand where there is material inaccuracy in the information submitted, and will fall away only when there is some form of intent behind the inaccuracy, the purpose of clearance is significantly undermined. In terms of behavioural impact, the amendment may discourage diligence by the applicant in providing information, leading to further time-consuming investigations by the regulator and costs to business. I reassure the noble Lord as strongly as I can that we need to make it as clear as possible that clearance given on the basis of full and proper facts cannot be reopened; that is sacrosanct.