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Mr. Steve Webb (Northavon) (LD): I am not sure whether that was a yes or a no. It is unclear to me whether Her Majesty's official Opposition are going to vote against the motion—[Interruption.] The tension is almost palpable.

The Ways and Means motion proposes that we work on the assumption that there will be an ombudsman for the pension protection fund. As a constituency Member who regularly finds that going to an ombudsman is the only way to resolve complex and difficult disputes independently, I think it entirely appropriate that there should be such an ombudsman.

I was rather surprised that the Minister did not tell us how much might be raised by the levy, and that was a rather regrettable omission. He said that the sum would be less than £1.5 million, but there is a big gap between £1.5 million and zero. I hope that, in responding to the debate, the Minister will at least give us some flavour of the amount of money that the House is giving the Secretary of State permission to levy. To ask how much might be raised seems a basic question to make of a Ways and Means resolution. The Minister did not tell us; he said, or implied, that it would not be more than £1.5 million, but will he give an idea of the order of magnitude that he is talking about?

The Liberal Democrats are of the view that there should be such an ombudsman, that that ombudsman has to be paid for, and that those who will benefit from the existence of the ombudsman are those with final salary or other defined benefit occupational schemes that are covered by the PPF. It is rather difficult to see why, if this body has to be paid for, it should be paid for by those who do not even have final salary or defined benefit pensions. In other words, in pensions, increasingly there are—to use an old phrase—two nations: those who have final salary, high-quality pensions and those at the mercy of the stock market. It seems odd to suggest that people whose pensions have
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no promise attached be asked to pay for a dispute resolution procedure for those who have better pensions, or indeed that the general taxpayer, who may have no pension at all beyond that provided by the state, be asked to pay for such a procedure.

It is hard to understand what the Conservative response actually meant. I think it was against a levy on PPF scheme members, so I take it that it supported a levy on the general taxpayer. That point will have been noted far and wide, as our debates are followed closely.

Mr. Fallon: Presumably, the hon. Gentleman has noticed that if the levy is to be charged on other final salary schemes, it will fall on us—on the parliamentary pension fund, as a successful final salary scheme. Has he consulted his colleagues about voting in favour of the motion?

Mr. Webb: On the assumption that our scheme is not covered by the pension protection fund, the levy would not fall on us, but I am open to amendment or correction on that point.

I have a question for the Minister. In his remarks, he referred to the fact that when we first discussed the issue in April—was it really all that time ago?—the original assumption was that the cost would be funded by the general taxpayer. Nothing changed, as far as I can see, between April and September, when his noble Friend Baroness Hollis said, on reflection, that it would be funded by a levy, so can the Minister explain why the Government changed their mind on that point? What changed? Or was it yet another of those last-minute changes to the Pensions Bill that we have grown all too fond of seeing?

The Bill will come back to us tomorrow and we shall debate the substantive issues then, but even on the eve of those final discussions, things are still changing. It is another hallmark of a Bill that has not been properly thought through or prepared that on the eve of its final return—perhaps not even its final return—to the House we are still debating last-minute changes of mind and Government second thoughts. It is worrying that a framework that affects the whole pensions system and which should be in place for a generation is being written on the back of an envelope and cobbled together by the Government as they go along.

On this specific last-minute change, however, the Government have got things right. If the ombudsman service has to be paid for, as clearly it does, it is appropriate that it be paid for by people who will benefit from its existence and not by those who may have no pension at all. I am not sure whether the Conservatives disagree with me, as it is a complete mystery to me what points—if any—the hon. Member for Eastbourne (Mr. Waterson) was trying to make. I assume that his colleagues will try to extend the debate to its full 45 minutes, so I shall stand in their way no longer.

5.37 pm

Mr. Michael Fallon (Sevenoaks) (Con): I shall try to answer the point made by the hon. Member for Northavon (Mr. Webb) when I conclude my remarks and offer my advice on which way we should vote.

The decision on how the ombudsman scheme should be funded is a harbinger of what is in store for us. We debated the whole matter about six months ago and it is
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already becoming clear that under the legislation there will be more and more disputes to be sorted out—whether they involve the financial assistance scheme on the one hand, or the PPF on the other. As I shall point out in our debate tomorrow—if I am fortunate enough to catch your eye, Mr. Deputy Speaker—we are, in essence, setting up a new form of business regulator and, as the Minister has finally realised, that regulator has to be paid for.

The Minister's real fear is, of course, that the costs of the new regulation will be large and much more substantial than originally envisaged, because there will be disputes all over the place. There are already disputes about the scope of the financial assistance scheme—when it should apply and to whom, which schemes will be covered and so on—but they are as nothing to the disputes that will occur under the PPF once it is established. All that new regulation must be paid for.

Ombudsmen are almost becoming a new form of regulator. When they were first set up, they were to deal with individual cases of injustice—to rule on those cases and advise the House on them—but they have now become part of the regulatory system itself. The Minister clearly expects many cases to go to them.

Who should pay? What is clear from the motion is that the levy will fall on successful schemes. I hope the Minister has considered the fairness of that. If the levy is to be straightforward, and with no variation according to risk, as my hon. Friend the Member for Eastbourne (Mr. Waterson) pointed out, it will be even more unfair, as it will bear more heavily on schemes that happen to be well funded and well managed than on those that are not. That is not particularly fair.

Will the levy also bear on the smallest schemes? We read that those companies that have set up small-scale schemes to benefit small work forces are already fearful of the additional costs involved under the Bill in having to bail out those schemes that are on less secure ground. Of course, the House has a parallel: we were asked, under the Financial Services and Markets Act 2000, to set up the new, all-powerful Financial Services Authority. That, too, is an example of a regulator with its own power to tax; it can set its own scale of charges, thus imposing on the good the cost of policing the bad. We should not authorise this new stealth tax on business without being sure that the Minister is doing everything possible to reduce the scope of disputes that are likely to be referred to the ombudsman.

As we shall see tomorrow, we will end up at the end of the Pensions Bill with the worst of all worlds: fewer final salary schemes, but more and more disputes about them. That brings me, finally, to the way in which we on the Opposition Benches should decide to vote. In my view, as we can see with the last-minute haste with which the Ways and Means resolution has been introduced this evening, the Pensions Bill has been a mess. This has been a very sad story from beginning to end. A raft of clauses was added to the Bill in Committee. All those clauses have been revised in the other place, as we shall see tomorrow. Even last Friday, the Government were still making announcements about how the burden of the new legislation would be financed. The Pensions Bill is
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a mess created by the Government, and it will make the provision and safeguarding of pensions worse. For those reasons, we should oppose the motion.

5.42 pm

Mr. Eric Forth (Bromley and Chislehurst) (Con): It is always a great pity that these apparently innocuous Ways and Means resolutions attract such relatively little attention from colleagues in the House, because they are, of course, a very important part of what remains of the House's influence on the sort of measures that flow from legislation. I should like to think that in some ways Members would be more interested in Ways and Means resolutions than in many other aspects of the Bills themselves.

Some of the Minister's phrases—innocuous and soothing though they were intended to sound—rang a number of alarm bells, certainly in my mind. I made a note of the one that sticks out. He actually had to the gall to say, almost with a straight face, that all was okay, as the ombudsman would be independent because he will be appointed by the Secretary of State. That is a new doctrine altogether. We are now expected to believe that someone will be independent because he or she is appointed by the Secretary of State. I should have thought that that was a complete contradiction in terms, and it immediately set me worrying about what we are being asked to do.

I must confess that I am not the biggest fan of the institution of ombudsmen.

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