Mr. Pond: It is important for hon. Members to recognise that the enhanced scrutiny by the regulator is an important part of our measures to prevent the moral hazard to which the hon. Gentleman refers.
Our proposals for the priority order, which we hope to introduce to the Committee as soon as possible after Easter, will be part of the Bill. We will have an opportunity to consider that in this Committee.
Amendment agreed to.
Amendments made: No. 374, in
No. 443, in
No. 375, in
clause 104, page 64, line 40, leave out 'section 127(5)(a)' and insert 'section 101(5)(a)'.
No. 444, in
clause 104, page 64, line 41, leave out 'respect of' and insert 'relation to'.
No. 445, in
Clause 104, as amended, ordered to stand part of the Bill.
Admission of new members,
payment of contributions etc
Amendment made: No. 376, in
Mr. Pond: I beg to move amendment No. 377, in
clause 105, page 65, line 14, leave out subsection (5).
Column Number: 460
The Chairman: With this it will be convenient to discuss Government amendments Nos. 379 and 385.
Mr. Pond: The purpose of the amendment is simply to ensure that all elements of the legislation are clear and watertight.
Amendment agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr. Waterson: It might be my fault, but have we gone past amendment No. 408?
The Chairman: Amendment No. 408 was due to be considered with amendment No. 376, but that was not discussed. It was for the hon. Gentleman to catch my eye at that point if he so wished, and he did not do so.
Mr. Waterson: I apologise for missing amendment No. 408, but I want to make the substantive point during the clause stand part debate.
Clause 105 in effect freezes a scheme during the assessment period. Subsection (3) states:
''No further contributions . . . may be paid''.
However, it should be made clear that that would not prevent a statutory debt being payable to the trustees. If the Under-Secretary thinks that the Bill is clear, no doubt he will explain why. Alternatively, he might think that that needs to be dealt with, if not now perhaps later on.
Question put and agreed to.
Clause 105, as amended, ordered to stand part of the Bill.
Clause 106 ordered to stand part of the Bill.
Restrictions on winding up of schemes
Amendments made: No. 378, in
clause 107, page 66, line 20, leave out from 'scheme' to 'an' in line 21 and insert 'in pursuance of'.
No. 379, in
clause 107, page 66, line 25, leave out subsection (4) and insert—
'(4) During the assessment period—
(a) except in prescribed circumstances and subject to prescribed conditions, no transfers of, or transfer payments in respect of, any member's rights under the scheme are to be made from the scheme, and
(b) no other steps may be taken to discharge any liability of the scheme to or in respect of a member of the scheme in respect of pensions or other benefits.
This subsection applies whether or not the scheme was being wound up immediately before the assessment period or began winding up by virtue of subsection (3).'.
No. 446, in
clause 107, page 66, line 37, leave out subsection (8).—[Mr. Pond.]
Clause 107, as amended, ordered to stand part of the Bill.
Power to validate
contraventions of section 107
Amendments made: No. 447, in
clause 108, page 67, line 4, leave out
Column Number: 461
No. 448, in
clause 108, page 67, line 13, leave out from beginning to 'an' and insert 'The validation of'.
No. 449, in
clause 108, page 67, leave out lines 14 and 15 and insert—
(i) the Board has issued a notice under subsection (2) relating to the determination, and
(ii) the period within which the issue of that notice may be reviewed by virtue of Chapter 6 has expired, and'.
No. 450, in
clause 108, page 67, line 16, leave out 'determination' and insert 'issue of the notice'.
No. 451, in
clause 108, page 67, line 19, leave out 'determination' and insert 'issue of the notice'.—[Mr. Pond.]
Clause 108, as amended, ordered to stand part of the Bill.
Board to act as creditor of the employer
Question proposed, That the clause stand part of the Bill.
Mr. Waterson: I have a small point to make, which has been raised by experts in the industry. Clause 109(2) provides that
''During the assessment period, the rights and powers of the trustees . . . in relation to any debt'',
including a statutory debt,
''are exercisable by the Board''.
I suppose it can be argued that it is implied that that will not be exercisable by the trustees. However, there is a feeling that it should be clear in the Bill that the board will have the same powers as the trustees to enter into what is called in the trade a Bradstock compromise. I should be grateful if the Under-Secretary clarifies that.
Mr. Pond: I do not want to be discourteous to the hon. Gentleman and hope that it is not out of order for me to deal with something that he raised earlier. We are moving at such a pace that although he asked about a question relating to amendment No. 408, he received no reply. I should say that Government amendment No. 376, which has been made, has the effect that he wanted. I hope that he is satisfied with that answer. I apologise for any apparent discourtesy.
As the hon. Gentleman said, clause 109 provides for any debt owed by the employer to the trustees or managers of a scheme to be regarded as a debt owed to the board and for the board, in this case, to be treated as a creditor of the employer during the assessment period. The purpose of that is to ensure that PPF can prevent trustees or managers from compromising the debt in any way and, therefore, increasing the liability of the PPF. The board can, if it so wishes, exercise the powers of the trustees or managers of the scheme in relation to any debt owed to them by the employer,
Column Number: 462
whether by virtue of section 75 of the Pensions Act 1995, or otherwise. That can be done to the exclusion of trustees. The board can, in such circumstances, use those powers to protect the position of scheme members and the PPF.
Clause 109 includes the ability to enter into the Bradstock arrangements should that be appropriate. I hope that with that clarification the Committee can accept the clause.
Question put and agreed to.
Clause 109 ordered to stand part of the Bill.
Clause 110 ordered to stand part of the Bill.
Loans to pay scheme benefits
Mr. Pond: I beg to move amendment No. 452, in
clause 111, page 68, line 26, leave out 'This section' and insert 'Subsection (2)'.
This is a minor drafting amendment.
Amendment agreed to.
Amendment made: No. 453, in
Mr. Waterson: I beg to move amendment No. 410, in
This is a small point, but one that is thought to be important by those who know about such things. The clause gives the board power to make loans to an eligible scheme and subsection (3) sets out the circumstances in which they are repayable by the trustees. I am advised that it should be made clear—possibly in the Bill—that they are repayable out of the assets of the scheme, not from the trustees' personal assets. I am sure that trustees would be relieved if that were so.
[Mr. John Robertson in the Chair]
Mr. Pond: The amendment tabled by the hon. Gentleman is not necessary because under the current wording of the clause trustees or managers would not in any case be held personally liable. The reference to trustees or managers refers only to their legal capacity as trustees or managers of a scheme, not to any personal agreements entered into by them. I hope that with that assurance the hon. Gentleman will withdraw his amendment.
Mr. Waterson: I am happy to do so, since what the Under-Secretary said is on the record. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: No. 454, in
clause 111, page 69, line 2, after '(3)(b)', insert '(i)'.—[Mr. Pond.]
Clause 111, as amended, ordered to stand part of the Bill.
Column Number: 463
[Mr. James Cran in the Chair]
Board's obligation to obtain
valuation of assets and protected liabilities
Amendments made: No. 455, in
clause 112, page 69, line 25, leave out 'Chapter' and insert 'section'.
No. 456, in
Clause 112, as amended, ordered to stand part of the Bill.
Clause 113 ordered to stand part of the Bill.