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Mr. Webb: Before the Minister moves on to the consequential amendments, I refer him to subsection (3) of the new clause. According to our helpful notes, the subsection is needed for particular schemes, such as MPs' schemes—that obviously caught our eye—or those for the police. Will he clarify what is so special
 
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about those schemes that they require a separate subsection, because I do not understand what makes them so different?

Mr. Pond: The schemes are in respect of those employees or former employees in a particular employment, as described in the scheme documentation. It could be a single-employer or a multi-employer scheme. We were seeking to clarify definitions in the new clause, so it was important to show where those schemes fitted within the structure of classifications.

The consequential Government amendments Nos. 132, 169, 170 and 172 amend the definition of "employer" in clause 275 of the Bill and in section 124 of the Pensions Act 1995. Clause 275 provides definitions of the terms used in the Bill, and section 124 does the same for part 1 of the Pensions Act 1995, which deals with occupational pensions. The amendments will ensure that the definition of employer is consistent with the new definition of an occupational pension scheme. The amendments are clarifications, which ensure that occupational pension schemes and personal pension schemes are correctly identified and that, as a result, they fall to be regulated by the appropriate authority—the pensions regulator for occupational pension schemes and the Financial Services Authority for personal pension schemes.

Mr. George Osborne: It seems strange that, after ploughing through a Bill of 282 clauses and 13 schedules, which were debated in 22 sittings in Committee, at the end of the process, the Government suddenly decide that they need to include some definitions of what is being talked about. At times, while listening to the Minister, I felt that I was attending one of the lectures about pension schemes provided by the hon. Member for Northavon (Mr. Webb)—[Interruption.] That is probably a fate worse than death, when I think about it.

I have no fundamental criticism of the new clause, but I do want to ask about the extent of joined-up thinking involved in it. As I understand it, the new clause will define all pension schemes as either occupational or personal. That sounds like a pretty good thing, but if we study the Bill, we find that it is littered with other terminology. For example, when I looked at the Bill this morning, I opened it at clause 113, which deals with money purchase schemes. We know that such schemes are personal pension schemes, but why is the terminology used in that clause different from that used in the definitional new clause? If we want simplification and if the point of the new clause is to create common terminology, should not the same terminology apply throughout the Bill? One of the problems that the wider public have with understanding pensions is the fact that different forms of words are often used to describe pretty much the same product.

That brings me to the Finance Bill. When I have finished on the Pensions Bill, my joy on Tuesday next week will be to embark in Committee for five weeks or so on consideration of the pensions tax provisions of the Finance Bill, shadowing for much of the time the Financial Secretary. I have already started to mug up on the Finance Bill, and I am sure that the Minister knows that clause 142 of it has its own set of definitions for
 
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pensions. Indeed, it has four definitions—dividing pensions into four different categories. The first is occupational, though it also calls them defined benefit schemes—another example of the use of different terminology. Secondly, the Finance Bill refers to money purchase schemes, using the words "money purchase" instead of "personal" as in this Bill. It introduces a third new category called "cash balance schemes". They do not appear in Department for Work and Pensions legislation, but in Inland Revenue legislation they do so. Finally, there are hybrid schemes. Leaving them aside—they explain themselves—we have three definitions: occupational, money purchase and cash balance. Only one—the occupational—uses the terminology in new clause 25.

There is no evidence of joined-up thinking, and it is genuinely confusing for outsiders reading the legislation to come across a whole series of different definitions and to encounter phrases used in one piece of legislation that do not appear in another. Even in the same Bill, as in the one before us, different terms are used to describe exactly the same scheme. I am all in favour of definitions. Personally, I am attracted to those set out in the new clause, which defines all pensions as either personal or occupational. When the Minister responds, will he explain why the Government have used a multitude of different phrases in different legislation and in different parts of the same legislation?

Mr. Webb: To paraphrase the Minister loosely, the purpose of new clause 25 is to deal with the complications arising from tax simplification. In the past, pensions legislation has relied on tax legislation, but that has now changed, so we have to do something to ensure that pensions legislation still works.

One matter of concern is the distinction in the new clause between occupational pensions and personal pensions, which is not as clear cut as it appears at first sight. As far as a worker in a company that runs a group personal pension is concerned, his pension is the works pension. It is the pension arranged through the employer, who may make an employer contribution, and the provider may come into the workplace to explain the scheme. As far as the worker is concerned, it is a company pension. However, the new clause states that it is not an occupational pension, but a personal pension. The practical significance of that distinction is that complaints about the different pensions must be directed to different regulators.

I have some sympathy for employees who do not understand the first thing about pensions, but they will be asked to understand that pensions can be arranged through the workplace and involve employer contributions and so on, and yet not be occupational schemes. It is possible for such pensions to be group personal schemes, in which case people must go to the FSA and not the pensions regulator when they are unhappy with the pension or when something goes wrong.

I do not want to go beyond the scope of the new clause, so I shall merely observe in passing that that is another reason why new confusion will be created by having one set of pensions regulated by the pensions regulator and another by the FSA. New clause 25 makes
 
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a clear distinction between two sorts of pensions in order to send people down different regulatory tracks, but should not both be regulated by a single pensions regulator? We are talking only about different types of pension, after all. New clause 25 perpetuates a distinction whereas the process of simplification suggests that all pensions should fall under one regulatory regime. Why do we want people to have recourse to two different regulators, when their view is the same as Alan Pickering's—that a pension is a pension is a pension? Clearly, that is not the view of the Department for Work and Pensions or, as the hon. Member for Tatton (Mr. Osborne) noted, the Treasury.

I have two specific and detailed questions about new clause 25. First, I intervened on the Minister in relation to proposed new subsection 3(a)(ii), which deals with pensions for MPs, police officers and so on. I am still not 100 per cent. clear as to what makes those schemes different. I suppose that Members of Parliament are employed by the Fees Office, as that is what pays our salaries. Police officers are employed by police authorities, but what makes those schemes different from an occupational scheme run by Wiggins Widgets, for example? Why does the Bill need a separate provision for those schemes?

Secondly, I do not understand why subsection 3(b) of the new clause states that an occupational pension scheme is a pension scheme which

"has its main administration in the United Kingdom or outside"

the EU. If I belong to the occupational scheme of, say, a French company, why would that scheme not be regarded as an occupational pension scheme under new clause 25? Not being a personal pension, the scheme would not be regulated by the pensions regulator, but neither would a scheme outside the EU. Why does the new clause have that rather bizarre scope? It provides that the only occupational schemes that count are ones in the UK or outside the EU. Surely the pensions regulator has no jurisdiction outside the EU, for goodness' sake? What on earth is that provision about? I am bewildered by that bit. I am sure that there is a good reason for it; there usually is, but the point of the provision is completely lost on me.

To sum up, I should prefer it if the Bill did not distinguish between the different types of pensions. We have tax simplification, so could we not also have pensions simplification? Could we not have one regulator for pensions, and not send people down different regulatory tracks? What is special about the schemes that I have mentioned, and what is the point of the provision in respect of the country in which a scheme's main administration takes place? Why do we have the two categories, with some sort of gap in between them? I am sure that clarification of those points by the Minister would be helpful for the House.

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