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Mr. Webb: By refusing the amendment, the Minister leaves himself the option of appointing people who do not satisfy, or who would not be expected to satisfy, those conditions. Why does he want to keep that option open, because that is the effect of refusing the amendment?
Mr. Pond: We have not left ourselves the option of appointing people who do not fulfil the requirements. We expect PPF board members to fulfil the requirements in the same way as trustees.
Kevin Brennan: Is it not the case that if these are indeed public appointments—perhaps my hon. Friend can confirm that—it is a legal requirement that they be appointed on merit, and will therefore have to be the best people for the job?
Mr. Pond:
My hon. Friend is correct on that, as on so much else this afternoon. Of course, these appointments will be made through the normal procedure for public appointments, and we will expect the people so appointed to have the abilities and characteristics that are necessary to fulfil their function and to ensure that the PPF provides the level of protection to scheme members that hon. Members want it to achieve.
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6 pm
Mr. Waterson: It does not take much to reveal the latent hostility towards lawyers that exists in some parts of this House. I have been accused of many things—in this case, of looking after my own. It might interest the hon. Member for Glasgow, Anniesland (John Robertson) to know that although I am indeed a lawyer, I am a shipping lawyer, so I doubt that I would be much use to the average pension fund and I would certainly not be much use to the board, although I suspect that the prospects of my being appointed to it under the current regime are pretty slim. [Interruption.] It is suggested that I could pass the exam. I have passed lots of exams in my time, but that does not make me a good person.
Mr. Webb: Do not be so hard on yourself.
Mr. Waterson: I thank the hon. Gentleman. I am sorry, but it is getting late in the day and my enthusiasm for pensions is waning rapidly.
In their fury at the legal profession, hon. Members misread my amendments. I am not suggesting that a board member has to be a qualified lawyer, actuary, accountant or anything similar, or even that he has to possess an AS-level in pension fund management, but merely that he has to have a knowledge and understanding of some or all of these matters. I presume that board members will be screened. I am sure that Ministers are not going to get them out of a bus queue, although that must be where they get Ministers from.
Malcolm Wicks: We are very ordinary people.
Mr. Waterson: Who could argue with that?
These people will probably be quite well paid—unlike, as the hon. Member for Northavon (Mr. Webb) pointed out, many current trustees of pension schemes, particularly smaller ones, many of whom are volunteers. One of the many unfortunate side effects of the Bill is that trustees of pension schemes will be professionalised as a result of the very firm, detailed and onerous requirements placed on them, which are supported by, or at least acquiesced in, by the hon. Member for Glasgow, Anniesland. Like the hon. Member for Northavon, I am bemused as to why the people running this super-pension fund should be any different.
Vera Baird (Redcar) (Lab): Before I go any further, the hon. Gentleman does not have to believe a word I say, because I am of course a lawyer.
There is a major distinction to be drawn here. People who are appointed to be trustees may not necessarily have the kind of qualifications or understanding that the hon. Gentleman would require, but provisions exist for training them. They should be representative. It will obviously be necessary to ensure that a person is capable of running the pension fund before appointing them to do so. The word "otiose" was used before, and that is the right word to apply to the amendment. The hon. Gentleman is worrying about nothing.
Mr. Waterson:
"Otiose" is one of those good lawyer's words that 90 per cent. of the population do not understand. "Surplus to requirements" is probably a better way of putting it. I take the hon. and learned
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Lady's point. I may be making a fundamental error in referring to a pension fund or a pension scheme, because when the Minister was asked in Committee, in the light of the deep concerns of the actuarial profession, who rarely get very excited about anything, whether this was an insurance scheme or a pension fund, he famously replied, "Neither." We still do not know the real answer to that question. Regarding these people as super-trustees of a super-pension scheme may be misleading, but they will have, on any view, some very significant responsibilities.
As is often the case with amendments, it comes down to whether the proposal is needed or otiose. In Committee and today, the Minister has assured me that he agrees with every word of the amendment and that it deals with matters that not only should but will be required of board members. I am prepared on this occasion to take him at his word. However, if any former flatmates of the Prime Minister pop up on the board I shall have something to say about the matter, possibly in an Adjournment debate. For the moment, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 99
Amendment made: No. 97, in page 68, line 19, after 'Part' insert
'and any provision in force in Northern Ireland corresponding to it'.—[Mr. Pond.]
Clause 102
Amendment made: No. 98, in page 70, line 1, leave out from 'Fund)' to end of line 2.—[Mr. Pond.]
Clause 118
Amendment made: No. 99, in page 79, line 41, after 'in' insert
'sections [Reviewable ill health pensions] to [Interpretation of sections [Reviewable ill health pensions] and [Effect of review]] and'.—[Mr. Pond.]
Clause 124
Amendment made: No. 100, in page 83, line 24, leave out 'owed' and insert 'due'.—[Mr. Pond.]
Clause 125
Malcolm Wicks: I beg to move Government amendment No. 101, in page 84, line 7, leave out 'for that period'.
Mr. Deputy Speaker (Sir Michael Lord):
With this we may take the following: Government amendments Nos. 102 and 103.
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Amendment No. 26, in page 232, line 15 schedule 7, leave out from 'means' to end of line 17 and insert '90 per cent.'.
Amendment No. 27, in page 232, line 24 schedule 7, leave out sub-paragraph (7).
Amendment No. 28, in page 247, line 42 schedule 7, leave out '2.5 %' and insert '5 %'.
Amendment No. 31, in page 249, line 19 schedule 7, leave out paragraph 29.
Malcolm Wicks: First, I will deal with the Government amendments, which are all minor drafting amendments.
Amendments Nos. 101, 102 and 103 amend clause 125 on the payment of scheme benefits. Amendment No. 101 clarifies the wording of subsection (2). Amendment No. 102 ensures that the power to make regulations permitting postponement of a person's entitlement to a pension during the assessment period may also permit postponement of a person's entitlement to a lump sum from the scheme.
Amendment No. 103 provides a definition of the term "normal pension age" that is used in clause 125(4). Amendment No. 144 clarifies the drafting in paragraph 14 of schedule 7 regarding the calculation of the revaluation amount in determining entitlement to lump sum compensation under paragraph 14. I ask hon. Members to accept the Government amendments.
Amendment No. 26 would reduce the pension protection fund compensation from 100 per cent. to 90 per cent. for scheme members over normal pension age, members under normal pension age who receive a pension on the ground of ill health and those who receive survivors' benefits before the assessment date. The amendment would mean that everyone would get the 90 per cent. level of compensation.
Amendment No. 27 would increase the level of PPF compensation to 100 per cent. for those members under normal pension age at assessment date who had taken early retirement but not on the ground of ill health. Amendment No. 31 would remove the Secretary of State's power to vary the PPF compensation percentages.
When a scheme enters the PPF, the majority of those members who already receive their pension will get 100 per cent. compensation. We believe that there are compelling reasons why older people who are some way into their retirement, survivors who already receive benefits and those who have retired early on the ground of ill health should receive the 100 per cent. level of compensation. The hon. Member for Eastbourne (Mr. Waterson) will have to explain why he does not agree with that. Those people are significantly less likely to be able to find work again, and so, crucially, the current priority order rules fully protect them.
Amendment No. 26 would cut the benefits of existing pensioners if their scheme should enter the PPF by reducing the 100 per cent. level of compensation to 90 per cent. For the reasons that I have just outlined, we do
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not consider such an approach to be fair. We also believe that the arguments for less than 100 per cent compensation for those over normal pension age, survivors who already receive benefits and those who have retired on the ground of ill health are less relevant.
One of the purposes of the 90 per cent. level of compensation is to give an incentive to the employer, company decision makers and those with influence, most of whom are much more likely to be below the scheme's normal pension age and may have an interest in keeping their scheme out of the PPF.
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