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Pensions Bill

moved Amendment No. 56: 56: Schedule 1, page 78, line 8, at end insert— ““( ) The trustee corporation must establish a committee in order to keep under review the question whether the corporation’s internal financial controls secure the proper conduct of its financial affairs.”” The noble Baroness said: My Lords, Amendment No. 56 amends paragraph 9 of Schedule 1 so that the trustee has to form a committee to oversee the corporation’s internal financial controls. In ordinary parlance, this is an audit committee. The Bill deals with two quangos. The Personal Accounts Delivery Authority, to which we will be coming soon, is required to set up a committee of non-executives to oversee PADA’s internal financial controls. That is in Clause 82. The trustee corporation, which will also be a quango, has no such requirement. At one level, I have no problem with not specifying audit committees in legislation. It is only in Bills introduced in the past 10 years that the Government have specified committees like that for PADA. There is an EU directive which now mandates audit committees for certain types of company and the Government have wisely decided not to legislate for that but to leave it to the infinitely more flexible mechanism of the FSA’s rule book. But I believe that organisations which handle large amounts of money and valuable assets—that is certainly what the trustee corporation will be doing in bucket loads, I should think—will have effective oversight of their financial controls and management. I tabled this amendment for our Committee stage and I had expected the Minister to tell the Committee that it was the Government’s policy that there should be an audit committee and that they would require one somehow. But the Minister did not do that. He told the Committee that it was premature to determine whether there should be an audit committee and that the Government would prefer not to tie this down specifically. The Minister did not want to tie the hands of the board of the trustee corporation. We do not believe that there could be any possible justification for not forming an audit committee, and the board really should not be given any option. The Minister said that he would go away and consider the point, but as he has not tabled an amendment, I have retabled my amendment in order to see whether the Government have in fact returned to the straight and narrow path in respect of audit committees. I beg to move.