Pensions Bill

[back to previous text]

Mr. Osborne: I welcome what the Minister said about considering the idea. I take his points about the rights to privacy, but people can look up the names of directors in Companies House. Indeed, there are provisions to safeguard directors if they are in a company that is being targeted. For example, there is an unfortunate case in my constituency where a company is being targeted by animal rights extremists, and all the people who work for the company, including the tea lady, have had their houses and cars damaged. As a result, that company has been able to blank out its records at Companies House. For companies in extreme circumstances therefore, it is possible to protect privacy where necessary. Will the Minister think about that?

On commercial confidentiality, on first reading of the clause a lot of the information does not strikes me as particularly commercially sensitive. It is broad information about the status of the scheme and the names and addresses of the trustees. Obviously, if there were an overriding reason of commercial sensitivity why our amendment would not be possible, we would listen to that. However, a lot of this information is regularly disclosed in the accounts of companies that publish their accounts, and I welcome the Minister's indication that he will look into that. That would help convince people that we are trying to create a more open environment, and reassure scheme members in particular that they will be able to see the information that is relevant to their pension and retirement. Given the assurance that the Minister has provided, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 36 ordered to stand part of the Bill.

Clause 37

The register: duties of trustees or managers

Mr. Osborne: I beg to move amendment No. 190, in

Column Number: 124

    clause 37, page 23, line 23, leave out

    'as soon as reasonably practicable'

    and insert 'within 28 days'.

The Chairman: With this it will be convenient to discuss amendment No. 191, in

    clause 37, page 23, line 31, leave out

    'as soon as reasonably practicable'

    , and insert 'within 28 days'.

Mr. Osborne: The only point of having a register is if it is up to date. Clause 37 sets out the duties of trustees and managers to keep the scheme up to date. For example, subsection (3) requires them, within three months of a scheme becoming registrable, to provide the necessary information. Rather curiously, in subsections (4) and (5), there does not seem to be a similar urgency to provide information about a change in the information that is registrable. Subsection (4) states:

    ''Where there is a change in any registrable information in respect of a registrable scheme, the trustees or managers of the scheme must as soon as reasonably practicable, notify the Regulator—

    (a) of the fact, and

    (b) of the new registrable information.

Under subsection (5), they must inform the regulator that the scheme ceases to be a registrable scheme or is being wound up only ''as soon as reasonably practicable''. What is practicable for one person is not practicable for another.

Kevin Brennan (Cardiff, West) (Lab): Does the hon. Gentleman acknowledge that ''as soon as reasonably practicable'' might be well within the 28 days that he refers to in his amendment?

Mr. Osborne: Of course. Within 28 days could mean one day, just as ''as soon as reasonably practicable'' could be less than 28 days. However, the Bill needs to be more specific. I would have thought that the hon. Gentleman, who is so assiduous in his defence of the interests of his constituents in Allied Steel and Wire and so forth, would want more protection for them. I would have thought that he would want a scheme to have to notify the regulator within a month—28 days—rather than a broad definition of ''as soon as reasonably practicable''. Someone could say to the regulator, ''I was too busy winding up my bank accounts and finding a house in the Costa del Sol to pass on this important information to you, Mr. Regulator.'' I have inserted ''28 days'', but I am happy to listen to the Government if they want to change it to another figure.

2.45 pm

It is interesting that specific periods are set out in some clauses. Clause 37(3) refers to a period of three months. Later in the legislation, periods such as three years are referred to, and it is stated that the requirement to make a scheme return must be fulfilled within 28 days. The Government have specified time frames in other parts of the Bill, but they have not done so in this measure on providing information. We are trying to create a risk-based approach, and I should have thought that one of the red flags to a regulator would be changes in a scheme,

Column Number: 125

and that the regulator would want to be informed about that as quickly as possible.

Malcolm Wicks: As you know, Mr. Griffiths—when you are not playing the role of the neutral Chairman—the workers' flag is deepest red. The hon. Gentleman mentioned the red flag, and this measure is about trying to make sensible arrangements, not least for working people whose pension schemes are at risk.

This amendment, like the last one that we addressed, appears to be sensible at first sight. When I first looked at it, I thought, ''Why not accept it?'' However, I took advice. First I was told that

    ''as soon as reasonably practicable''

is often used in pensions legislation—although that was not the strongest point. More importantly, there is a danger that the hon. Gentleman's amendment could create perverse incentives and lead to a situation that he would not want. Our phrase

    ''as soon as reasonably practicable''

means nothing more than the common-sense interpretation suggests—in this case that the information should be provided as soon as possible after the trustees become aware of the facts in question. In most cases, that will mean that the trustees should comply within a few days. I am advised that OPRA's experience is that where a specific time limit is imposed, people will tend not to comply until that time. Perhaps human nature dictates that that often happens. A rough analogy can be drawn with speed limits on the roads. Some people—my note says ''most people'' but I am more optimistic than that—interpret a 30 mph speed limit to mean that they should travel at 30 mph, rather than be more sensible and drive up to that limit, or way below it if conditions are bad. I am sure that no Committee members interpret the speed limits in that way.

The amendment is well-intentioned, but it could have perverse consequences. It is important that the information that the regulator holds about schemes is up to date. Those responsible for supplying that information should be required to do so as soon as is reasonably practicable. Committee members will note the provision in subsection (6) that enables the regulator to impose a civil penalty on any trustee or manager who fails to take all reasonable steps to secure compliance. That, coupled with the duty on trustees to comply within a reasonable time, means that, if the regulator is deciding whether to impose a penalty in this case, it would take into account the particular circumstances of the case, and any representations made by the trustees in their defence. If, on balance, the regulator decides that the trustees' actions were reasonable in the circumstances, it would have no grounds on which to impose the penalty.

I believe that the provisions as drafted provide sufficient protection for members, by seeking to ensure that the regulator's information is up to date. As I have explained, it also ensures protection and balance for those on whom the duty to comply falls.

Mr. Osborne: I am not entirely convinced by the Minister's explanation—and perhaps the Minister is not entirely convinced by it, given that there was a

Column Number: 126

brief ray of sunshine when he might have exercised some ministerial discretion before the clouds of official advice came overhead.

The Minister makes the transport analogy of a speeding limit, but there is also the transport analogy of a parking ticket. If someone gets a parking ticket and it says, ''Please pay as soon as is reasonably practicable'', they will never pay it, but if they get one that says, ''Pay within 28 days'', they tend to do so; otherwise, it goes up in value. It would be sensible to put a more specific time period in the Bill.

I am not entirely convinced as to why the obligations on trustees and managers in the provisions refer to ''reasonably practicable'' when other duties on trustees, managers and others elsewhere in this part of the Bill mention specific periods. However, there are more important battles to fight in Parliament, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 37 ordered to stand part of the Bill.

Clause 38

Duty of the Regulator to issue scheme return notices

Question proposed, That the clause stand part of the Bill.

Mr. Osborne: I have a couple of minor queries about the issuing of scheme returns. I wanted to question the need for the long period mentioned in subsection (3)(a), which says that the regulator only has to issue the demand for information within three years of the regulator being informed that there is a new scheme. Three years strikes me as quite a long time; I should be interested to know why the Government chose that period.

There was some confusion in my mind when I was reading the Bill about the following: under clause 37(2), once the scheme is set up, the trustees and managers have to send in certain registrable information within three months. However, clause 38 seems to imply that the decision to comply with clause 37 is voluntary; clause 38(3)(b) says that

    ''if the trustees or managers have complied with paragraph (b) of section 37(2)''

they only have to provide information a year later. That seemed to imply that there was a voluntary element to complying with the previous clause and the request for information. I may have misunderstood, but that is how the matter seemed to me.

To reiterate my first point, why such a long period? Why three years? Why not one year, as might seem more reasonable?

 
Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index


©Parliamentary copyright 2004
Prepared 11 March 2004