---

Mr. Webb: That was a fascinating response. The Minister initially said that the UK pensions regulator has locus when there is a trustee in the UK, and indeed that is the condition in subsection (4). I asked what would happen if that condition were not satisfied, there was no trustee in the UK and the firm said, "We don't care what British law says. We are going to put some money in our workers' American pension scheme. Get lost." Is the Minister really saying that the British pensions regulator will have to liaise with pensions regulators in every country in the world that might have the head office of a firm that employs a UK employee? Some such countries may not even have pensions regulators. What if the foreign pension regulator does not agree with the Government on the necessary requirements? I am completely bewildered by the matter. Has any dialogue taken place with regulators in other countries to see whether the Government's proposal is realistic?

Mr. Pond: As the hon. Gentleman will know, the community of pensions regulators throughout the world operates on a comradely and co-operative basis. Given that they have shared interests, in that multinational cross-border arrangements are increasingly common, our expectation is that co-operation will occur. In some
 
18 May 2004 : Column 865
 
circumstances, that may not happen, although the Wall street example is not necessarily a good one. We may need to revisit the issue if that proves to be the case, but we are confident that the provisions will work better than the current arrangements, albeit without being the perfect solution.

If a firm has workers in the UK, they should be covered by UK pensions legislation. If there is no UK-based trustee, it is the employer who is subject to sanctions by the regulator, and that is how sanctions would be applied in the hon. Gentleman's example of a US scheme refusing to set up a trustee in the UK.

I can tell the hon. Member for Tatton that no further inspiration has come to me on whether there are any occupational schemes that are not trust based. As far as the DWP and the Inland Revenue are concerned, we are aware of no such schemes.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 27

Non-EC occupational pension scheme to be trust with UK-resident trustee

'(1)   Subsections (2) and (3) apply to an occupational pension scheme that has its main administration outside the member States.

(2)   An employer based in any part of the United Kingdom may cause a contribution to be paid to the scheme in respect of an employee (whether or not employed in the United Kingdom) only if the conditions in subsection (4) are satisfied at the time of payment.

(3)   An employer based outside the United Kingdom may cause a contribution to be paid to the scheme in respect of an employee employed in the United Kingdom only if the conditions in subsection (4) are satisfied at the time of payment.

(4)   Those conditions are—

(a)   that the scheme is established under irrevocable trusts, and

(b)   that a trustee of the scheme is resident in the United Kingdom.

(5)   Subsection (2) or (3) does not apply to an occupational pension scheme if it is a prescribed scheme or a scheme of a prescribed description.

(6)   Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to an employer who causes a contribution to be paid to an occupational pension scheme that has its main administration outside the member States if—

(a)   subsection (2) or (3) applies in relation to the payment of the contribution,

(b)   the conditions in subsection (4) are not satisfied at the time of payment, and

(c)   the employer does not have a reasonable excuse for causing payment to occur at a time when those conditions are not satisfied.

(7)   In this section "based"—

(a)   in relation to an employer who is a body corporate, means incorporated, and

(b)   in relation to any other employer, means resident.'.—[Mr. Pond.]

Brought up, read the First and Second time, and added to the Bill.
 
18 May 2004 : Column 866
 

New Clause 28

Representative of non-EC occupational pension scheme to be treated as trustee

'(1)   In the case of an occupational pension scheme that has its main administration outside the member States, a reference in pensions legislation to the trustees, or a trustee, of the scheme includes a person who is for the time being appointed by the trustees of the scheme to be a representative of the scheme for the purposes of this section.

(2)   Subsection (1) does not apply to a prescribed reference.

(3)   In subsection (1) "pensions legislation" means any enactment contained in or made by virtue of—

(a)   the Pension Schemes Act 1993 (c. 48),

(b)   the Pensions Act 1995 (c. 26),

(c)   Parts 1 to 4 of the Welfare Reform and Pensions Act 1999 (c. 30), or

(d)   this Act.'.—[Mr. Pond.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 29

Activities of occupational pension schemes

'(1)   If an occupational pension scheme has its main administration in the United Kingdom, the trustees or managers of the scheme must secure that the activities of the scheme are limited to retirement-benefit activities.

(2)   Subsection (1) does not apply to a scheme if it is a prescribed scheme or a scheme of a prescribed description.

(3)   Section 10 of the Pensions Act 1995 (c. 26) (civil penalties) applies to a trustee or manager of a scheme to which subsection (1) applies if—

(a)   the scheme has activities that are not retirement-benefit activities, and

(b)   the trustee or manager has failed to take all reasonable steps to secure that the activities of the scheme are limited to retirement-benefit activities.

(4)   In this section "retirement-benefit activities" means—

(a)   operations related to retirement benefits, and

(b)   activities arising from operations related to retirement benefits.

(5)   In subsection (4) "retirement benefits" means—

---