Pensions Bill

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Mr. Osborne: Does the Minister envisage producing a list of material breaches? We are talking about lay trustees who will want guidance on what is a material breach; they will not want to get into trouble by not reporting a material breach. If they do not have specific guidance, there is a risk that they will do what they do now—refer any breach just to cover their backs.

Malcolm Wicks: The regulator will publish codes, and will consult on them before they are finalised. Those will explain more fully who needs to be a whistleblower and under what circumstances, so that there is clarity for those who need or want to take action. The regulator will operate, in many respects, via codes that will be consulted on. I hope that I have said enough to persuade the hon. Gentleman not to press what were essentially probing amendments.

Mr. Osborne: On the point about legal privilege I was, of course, testing the Minister. I knew the answer but wanted to ensure that the Minister had read his own Bill. If one reads clause 234, the situation is

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crystal clear. I assure him the union of barristers is well represented in the Osborne household by my wife. I am glad that the Minister passed that test.

On the broader point about material breaches, I take what the Minister says. I want to see what he does: a more risk-based approach by the new regulator, which is not bogged down by the reporting of thousands of relatively minor breaches of the law. We will obviously have to see how the regulator defines material breaches; it is important that that is clearly stated, or else I suspect that people will err on the side of caution and the regulator will find itself swamped with reports. However, the Minister recognises that that goes to the heart of making the regulator succeed, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 ordered to stand part of the Bill.

Clause 46 ordered to stand part of the Bill.

Clause 47

Inspection of premises

Mr. Osborne: I beg to move amendment No. 204, in

    clause 47, page 30, line 21, at end insert—

    '(8) Where such an inspection is carried out under this Act, and no further action is taken by the Regulator following such inspection, the owners or occupiers of the relevant premises are entitled to claim from the Regulator the reasonable costs of such inspection.'.

The Chairman: With this it will be convenient to discuss amendment No. 205, in

    clause 48, page 31, line 19, at end insert—

    '(7) Where such an inspection is carried out under this Act, and no further action is taken by the Regulator following such inspection, the owners or occupiers of the relevant premises are entitled to claim from the Regulator the reasonable costs of such inspection.'.

Mr. Osborne: We come now to the range of powers that the regulator will have to enter premises, get warrants and so on. I repeat what I said earlier that Parliament should rightly be concerned when Governments take upon themselves new powers to enter private property and compel individuals.

Just as those of us who have studied history know that debates about excise men created great interest in the 18th century, so debates about the powers of the pension regulator create great interest in today's society. Amendments Nos. 204 and 205, which relate to two different clauses but would achieve the same thing, put a bit of a check on the regulator. They state:

    ''Where such an inspection''

in the terms of these clauses

    ''is carried out . . . and no further action is taken by the Regulator following such inspection, the owners or occupiers of the relevant premises are entitled to claim from the Regulator the reasonable costs of such inspection.''

That is a reasonable duty to place on the regulator. The arrival of the inspectors, and their poring over files, could seriously disrupt the employer's business for a number of days. It is reasonable that the regulator should reimburse at least some of the costs incurred by the company if it turns out that there was

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nothing for them to have covered up. That is also a useful check on the regulator; if it needs to inspect someone's property it should double-check and say, ''Hold on, are we absolutely sure that we need to do this?'' Over time we have put more restrictions on the ability of the police to inspect property. This is a small check on the regulator's powers.

Mr. Pond: Despite the hon. Gentleman's assumption that there is great interest in these issues outside this Room, I have to tell him that the west end play, ''An Inspector Calls'' is not based on the powers of the regulator.

The amendments seek to ensure that if the regulator exercises its powers to inspect premises and takes no subsequent action, the owner of the premises is entitled to claim compensation from the regulator. The amendments could have an adverse effect by hampering the regulator and adding to its costs in protecting scheme members' interests and the valuable assets of pension schemes. Premises are liable to inspection only if the inspector has reasonable grounds to believe that scheme members are employed there, documents relevant to the administration of the scheme are being kept there, or the administration of the scheme—or work connected with it—is being carried out there.

Information collecting and management are the key to the new risk-based approach to regulation. The regulator will need to have accurate, up-to-date information about schemes. It will only have powers to request information that is relevant to its functions. It will have procedures in place to ensure that all legal obligations are adhered to, including those imposed by the Data Protection Act 1998. If the regulator requires a scheme or other person to supply a document or piece of information, it would in the first instance request it under its power in clause 6. If that information were not forthcoming, the regulator might resort to its powers to enter and inspect premises. Robust measures are needed to ensure that when there is non-compliance with the request for information, decisive action can be taken to ensure that the regulator can fulfil its objective of protecting scheme members' benefits. That is what the powers to inspect premises are there for.

Hon. Members may wish to note that clauses 47 and 48, to which we shall come in a minute, each replicate powers that OPRA has under the Pensions Act 1995 and the Pension Schemes Act 1993. I cannot for the moment think who was in power when those two pieces of legislation were introduced. Hon. Members may also wish to note that OPRA carries out on average 12 unannounced visits per year. These powers are important, but they are exercised in moderation.

Given the strictures within which the regulator will have to operate when conducting investigations, the additional cost burdens that the amendments could place on those activities are unnecessary because they restrict the regulator's powers to acquire up-to-date information. They are also potentially harmful to the people and interests—the pension scheme members—

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that the regulator is there to protect. I ask the hon. Gentleman to withdraw the amendment.

Mr. Osborne: The Under-Secretary is merely confirming that the present Government are as authoritarian as the previous Government. [Hon. Members: ''Oh!''] I hear howls of protest, but I am not sure whether they are trying to tell me that they are more authoritarian. Certainly, one comes to that conclusion on seeing some of the things that the Home Office is doing.

Unfortunately, I do not have teams of civil servants to go through the reports of the Committee stages of the 1993 and 1995 Acts and see what all the Labour spokesmen said when the Conservative Government of that time were taking those powers—[Hon. Members: ''Shame.''] Perhaps that is how I should spend my weekends—or perhaps not.

It is important that the regulator is cautious in the use of those foraging powers, and the Under-Secretary assures me that that will be the case. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 47 ordered to stand part of the Bill.

Clause 48

Inspection of premises in respect of employers' obligations

3.45 pm

Mr. Pond: I beg to move amendment No 33, in

    clause 48, page 30, line 46, after 'if' insert

    'the inspector has reasonable grounds to believe that'.

There should not be an absolute power of entry. There should only be such a power where the inspector, on reasonable grounds, deems it appropriate. The clause is currently incomplete; for example, an inspector cannot know what documents or work connected with administration are present without undertaking an inspection. I hope that the Committee understands that this is a drafting amendment that merely makes usable the powers that we have just approved for the inspectors.

Amendment agreed to.

Clause 48, as amended, ordered to stand part of the Bill.

Clause 49

Inspection of premises: powers of inspectors

Mr. Osborne: I beg to move amendment No. 206, in

    clause 49, page 31, line 34, at end insert 'and'.

The Chairman: With this it will be convenient to discuss amendment No. 207, in

    clause 49, page 31, line 40, leave out from 'form' to end of line 45.

Mr. Osborne: Amendment No. 206 is consequential, so I will deal with amendment No. 207, which is the more substantive amendment, and would remove subsection (2)(f). I again want the Government to justify why they are taking certain powers. That subsection allows an inspector to examine

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    ''either alone or in the presence of another person, any person on the premises whom he has reasonable cause to believe to be able to give information relevant to that matter.''

That the inspector can be alone set an alarm bell ringing in my head. I presume that someone who is being questioned would be able to have a lawyer present, so they would not necessarily be alone. I hope that that right will be protected, because civil or even criminal proceedings could follow.

 
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