Mr. Waterson: I am not wholly convinced. In one breath, the Minister talks about giving people certainty and swearing undying loyalty to the figure of £3,600 at 2005 levels. He then talks about the need for flexibility. He cannot have it both ways because there are bodies out there like the ABI which represents great swathes of the industry and is nervous about the lack of reference in the Bill and in the explanatory notes to £3,600.
I will not press the amendment to a division on this occasion, but the Minister needs to go away and think about this a bit harder because it is clear from the evidence that there are real concerns that this is a figure into which there might be some flexibilityto use the Ministers wordbuilt.
I also take up the point made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey, when he says that some of the things he is proposing are not bells and whistles. I suppose that one mans bells and whistles are another mans something else. We have to be guided, apart from any other arguments, by the pleas of thoselike Mr. Joneswho are going to have to try to make all this work; we need to keep it simple. We can always add complexity later on, once it is working properly. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 53 ordered to stand part of the Bill.
Clause 54 ordered to stand part of the Bill.
Procedure for rules
Mr. Waterson: I beg to move amendment No. 31, in clause 55, page 26, line 19, leave out have regard to and insert take account of.
This is a cheeky little amendment but it deserves an outing. It is the procedure for rules that are made under clause 50 in setting up the scheme. The clause starts well by saying that anyone who is proposing these rules
must publish a draft of the rules and invite comments.
So far, so good. It then goes on to say:
They must have regard to any comments made in accordance with the invitation.
Having checked the Oxford Dictionary, it seems to me that to have regard is a pretty weak injunction on people; it might just invite the odd glance and will then be ignored completely. We are proposing to toughen that up and say, take account of, which is a rather sterner injunction and one which we think perfectly appropriate in these circumstances.
Mr. O'Brien: Appointing a trustee body to run an occupational pension scheme, which is part of wider Government reforms, presents a challenge in balancing independence with accountability. This is exemplified in the arrangements for the scheme rules. The scheme rules will include much of the day-to-day detail of how the personal accounts scheme will be runhence the trustee body needs to have a high degree of independence in making the rules. However, the scope of the rules will be limited by the parameters set in the scheme order, which we have previously been discussing and will be subject to parliamentary scrutiny. That approach to the rule gives Parliament control of the scope of personal accounts but allows the trustee independence in the day-to-day administration and operation of the scheme.
The amendment concerns how comments about rule changes would be considered by whoever was making the rules, whether a trustee or the Secretary of State. It may be helpful to explain what we anticipate the rules covering. The rules will include the set-up and operation of any committees that the trustee chooses to create, the establishment of an internal complaints procedure and any information about investment, such as how many changes to funds a trustee can make each year. That is far from being set in stone; it is a broad assumption based on practice in existing large schemes. We expect that the trustee generally will be responsible for making and amending the rules after the initial set-up.
The duty to consult placed on both the Secretary of State and the trustee will ensure that the views of all interested parties such as members, employers and the wider group of stakeholders are considered in the design of the scheme rules. That requirement to consult ensures engagement and involvement without fettering the independence of the trustee. The Bill already requires the rule-maker to have regard to any comments that they receive and to publish a general response. The hon. Gentlemans amendment appears to seek greater assurance that the rule-maker will consider any comments received.
The current drafting is sufficient. The phrase that the hon. Gentleman usestake account ofdoes not take us an awful lot further but it does appear to fetter a trustees freedom and independence in a way that have regard to does not. I appreciate that he takes us a bit further but there is both a price and a balance here, and the price in terms of fettering the independence of the trustee is one that we need to approach with caution.
I do not have enormously strong views here but I think that we are attempting to strike a balance by requiring the trustee to have regard to, whereas, by saying that they have to take account of, the hon. Gentleman raises questions such as, How do they take account of it? How do they prove that they have taken account of it? Do they have to do something in response?
Mr. O'Brien: I think that I have convinced the hon. Gentleman. There are signs of submission and on that basis I will sit down.
Sitting suspended for a Division in the House.
Mr. Waterson: I heard what the Minister had to sayhe is obviously so pleased with himself that he has gone off for a mini-break or something. There is a real difference in the wording here, but I do not want us to descend into a dispute about pure semantics. In the interests of sanity, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55 ordered to stand part of the Bill.
Clause 56 ordered to stand part of the Bill.
Mr. Waterson: I beg to move amendment No. 32, in clause 57, page 27, line 12, leave out subsection (3).
I have a short point, which is as much asking a question as speaking to the amendment. Subsection (3) refers the trustee corporation as a body corporate, not as having any Crown immunity or privilege. I understand the argument for that, but only a short while ago we had a debate about relieving individual trustees and others of their possible legal liabilities in certain circumstances. I am not sure how that chimes in with this aspect of the Bill, but I know that the Minister will enlighten me.
Mr. O'Brien: The trustee corporation will be a non-departmental public body, which will ensure independence and accountability. If the trustee corporation was a Crown body, its staff would be civil servants and thus less independent. Standard practice, therefore, is for bodies that are not part of a Department not to be considered as part of the Crown and thus not to enjoy any immunity or privileges of the Crown. A trustee corporation will run the scheme in the sole interest of its members and independently of the Government, so its loyalty will be not to the Crown, but to the members. That means that it is more important for the trustee corporation to be without Crown status. On that basis, I hope that the hon. Gentleman is content.
Amendment, by leave, withdrawn.
Clause 57 ordered to stand part of the Bill.
The trustee corporation
of which at least three members shall be appointed to represent the interests of members and prospective members..
A series of amendments have been tabled to schedule 1. Some are on nuts and bolts issuesI am sure that we can dispose of those simplywhile others relate to what I shall call the level playing field issue. We will deal with those in more detail with your indulgence, Mrs. Anderson.
Through amendment No. 54, we are saying that of the
not fewer than 9 and not more than 15 members
of the trustee corporation, at least three should be appointed specifically to represent the interests of members and prospective members. I anticipate that the Minister will say, But theyre all meant to represent the interests of members and prospective members. On one level, that is correct. However, it might be better to write into the Bill a specific requirement that at least three are appointed specifically for that purposeperhaps from among the kind of people who might otherwise have become members of the members panel. I am sure that that will appeal to the hon. Member for Inverness, Nairn, Badenoch and Strathspey, given his near obsession with that issue.
Danny Alexander: As the hon. Member for Eastbourne has observed, this is an issue that I am interested to pursue. The amendment usefully serves to probe the Ministers intentions.
As the hon. Gentleman said, the Minister will no doubt answer that all members of the trustee corporation will, in some sense, be there to represent the members. However, the amendment relates to clause 52(4), which we debated earlier, which says:
The functions of the members panel may include nominating individuals to be members of the trustee corporation.
I suspect that the group of people who are referred to in the amendment are there not because every member of the trustee corporation should be helping to manage the scheme on behalf of its members, but so that that there are representatives on the trustee corporation who are nominated directly by members, groups representing members and, perhaps, the members panel. The point that is being made is important. I hope that the Minister will either agree to the amendment or a similar measure, or that he will at least make clear how he wants to ensure that the members are appointed. If there is not to be such a provision in the Bill, how will we ensure that such a practice goes forward?
Mr. O'Brien: The Governments policy on member-nominated trustees applies to personal accounts in broadly the same way as other occupational pension schemes at this time. The schedule already makes clear that there is provision for section 242 of the Pensions Act 2004 to applyfor one third of the trustees to be member-nominated. On that basis, the amendment is probably not needed. Given that the scale of the personal accounts scheme means that the members panel will have the responsibility of nominating trustees to represent scheme members, it is going to be difficult to work out how they will do that, as we have discussed. Both hon. Gentlemen are right to say that all trustees will, by their nature, seek to represent the
At the moment, we are looking at section 242 of the 2004 Act, so the proportion of trustees to be member-nominated would be one third. I hope that provides reassurance that the amendment is not needed. The provision that addresses the issues about which the hon. Gentleman is concerned is already in the Bill: two sub-paragraphs down from the provision to which the amendment refers.
Amendment, by leave, withdrawn.
Mr. Waterson: I beg to move amendment No. 55, in schedule 1, page 50, line 2, after financial, insert , political.
Again, I want to make a short but important point. Quite rightly, paragraph 2 to schedule 1 deals with potential conflicts of interest. It is important that we cater for that possibility, the most obvious of which is financial, as the measure says. Sub-paragraph (5) cites financial or other interest, which makes the net reasonably wide.
We are suggest that the measure should refer to financial, political or other interest, which would ensure thatof course, the whole question of recruitment is some way down the roadwhichever Government were in power, we would not end up with political appointees being nudged in the direction of the trustee corporation. The men and women who will serve on it will be thoroughly independently minded and will, presumably, have substantial experience or expertise in this area. If they have a political background, that should at least be considered and made part of the selection process.
Mr. Waterson: Taking one example at randomjust plucking an example out of the airthe new chairman of PADA made a contribution to the now Prime Ministers campaign fund. That is a political interest. I am not necessary talking about people who deliver leaflets regularly in a particular ward. Whenever paperwork on recruiting people to the NHS crosses my desk, there is always a bit on the form about political activity.
Mr. O'Brien: The hon. Gentleman was awarehis colleagues were certainly awareof that contribution at the time of the appointment of Paul Myners. It was not a secret in any way. It was not regarded by the hon. Gentlemans party or anyone as a conflict of interest in any form.
We are in danger of excluding people who have a legitimate political interest. People vote and participate in politics, and they ought to be encouraged to do so. I do not think that we should be in the business of
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