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 flexibility—to use the
Minister’s
word—built. 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 man’s
bells and whistles are another man’s something else. We have to
be guided, apart from any other arguments, by the pleas of
those—like Mr. Jones—who 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withdrawn.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.
Clause
55Procedure
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 run—hence 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. 3.30
pm 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.
Gentleman’s 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
uses—“take account of”—does not take us an
awful lot further but it does appear to fetter a trustee’s
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.
Waterson: Alright,
alright.
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.
3.32
pm Sitting
suspended for a Division in the
House. 3.47
pm On
resuming—
Mr.
Waterson: I heard what the Minister had to say—he
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.
Clause
57Trustee
corporation
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.
Mr.
Waterson: I am grateful for that, and I beg to ask leave
to withdraw the
amendment. Amendment,
by leave,
withdrawn. Clause
57 ordered to stand part of the
Bill.
Schedule
1The
trustee
corporation
Mr.
Waterson: I beg to move amendment No. 54, in
schedule 1, page 49, line 14, at
end insert ‘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 issues—I am
sure that we can dispose of those simply—while 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
they’re 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 purpose—perhaps
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 Minister’s
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 Government’s 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 apply—for 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
members of the trust and act in their best interests. That is their
obligation. It is right that there should be member-nominated trustees,
although there is a debate about the number of them. For example, the
TUC has urged that they should make up 50 per cent., and that forms
part of the
discussion. 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.
Mr.
Waterson: I am grateful for that explanation, and I beg to
ask leave to withdraw the
amendment. 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 that—of
course, the whole question of recruitment is some way down the
road—whichever 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.
O'Brien: What is a political
interest?
Mr.
Waterson: Taking one example at random—just
plucking an example out of the air—the new chairman of PADA made
a contribution to the now Prime Minister’s 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 aware—his
colleagues were certainly aware—of 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. Gentleman’s 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
suggesting that those who have a political interest automatically have a
conflict of interest. Provided that things are reasonably open, I have
no great problem with political
interests. | 
