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Session 2007 - 08
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General Committee Debates

Pensions Bill

The Committee consisted of the following Members:

Chairmen: Sir Nicholas Winterton , Janet Anderson
Ainger, Nick (Carmarthen, West and South Pembrokeshire) (Lab)
Alexander, Danny (Inverness, Nairn, Badenoch and Strathspey) (LD)
Banks, Gordon (Ochil and South Perthshire) (Lab)
Borrow, Mr. David S. (South Ribble) (Lab)
Butler, Ms Dawn (Brent, South) (Lab)
Cunningham, Mr. Jim (Coventry, South) (Lab)
David, Mr. Wayne (Caerphilly) (Lab)
Duddridge, James (Rochford and Southend, East) (Con)
Flello, Mr. Robert (Stoke-on-Trent, South) (Lab)
Greenway, Mr. John (Ryedale) (Con)
Keen, Alan (Feltham and Heston) (Lab/Co-op)
Kirkbride, Miss Julie (Bromsgrove) (Con)
O'Brien, Mr. Mike (Minister for Pensions Reform)
Plaskitt, Mr. James (Parliamentary Under-Secretary of State for Work and Pensions)
Rowen, Paul (Rochdale) (LD)
Selous, Andrew (South-West Bedfordshire) (Con)
Waterson, Mr. Nigel (Eastbourne) (Con)
Mark Hutton, Committee Clerk
† attended the Committee

Public Bill Committee

Thursday 21 February 2008


[Sir Nicholas Winterton in the Chair]

Pensions Bill

New Clause 7

Role of the Information Commissioner
‘(1) The Information Commissioner shall have full jurisdiction over the workings of the Personal Accounts Delivery Authority and the Pensions Regulator.
(2) The Secretary of State must prepare, and keep under review, a code of practice with respect to the disclosure of information relating to pensions by public authorities.
(3) Before preparing or altering the code, the Secretary of State must consult—
(a) any specified public authority;
(b) the Information Commissioner; and
(c) such other persons as the Secretary of State considers appropriate.
(4) A public authority must have regard to the code in (or in connection with) disclosing information relating to pensions.
(5) Nothing in this section applies in relation to any disclosure by a relevant public authority of information whose subject-matter is a matter about which provision would be within the legislative competence of the Scottish Parliament if it were included in an Act of the Scottish Parliament.
(6) The Secretary of State must—
(a) lay a copy of the code, and of any alterations to it, before Parliament; and
(b) from time to time publish the code as for the time being in force.’.—[Paul Rowen.]
Motion made [this day], That the clause be read a Second Time.
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Paul Rowen (Rochdale) (LD): I would like to quote from a statement made by the Prime Minister.
Mr. Nigel Waterson (Eastbourne) (Con): And you were doing so well.
Paul Rowen: I will not go there. The Prime Minister said:
“We will give the Information Commissioner the power to spot-check Departments, to do everything in his power and our power to secure the protection of data. In other words, we will do everything in our power to make sure data are safe.”
That was the statement he made following the very shocking loss of information from HMRC.
What this new clause does is to set up a mechanism for ensuring that the Information Commissioner has a role in protecting data. Over 6 million people will be signing up for personal accounts. The pensions authorities will therefore have a considerable number of personal details about these people, and it is quite important that this information is protected. The code of practice that this clause sets up will enable a dialogue to take place between the Secretary of State and the Information Commissioner on what sort of changes in attitude the Information Commissioner wishes to see from Departments like the DWP to ensure that data are protected.
Perhaps I should remind members what the House of Commons Justice Committee had to say in its report earlier this year. They pointed out that the Data Protection Act 1998 applies to private organisations and individuals and they can be held criminally liable if data are lost. But it does not currently apply to Government Departments. On 3 January, the Information Commissioner, Sir Richard Thomas, said in response to this that losing data should be a criminal offence. New clause 7 does not introduce that: that presumably will come when the reviews by the chairman of PricewaterhouseCoopers and the Information Commissioner, set up by the Prime Minister, are published.
What this new clause does do—and I think it is an important clause and the sort of clause that should apply to all public bills which grant Government Departments more access to private individuals’ information—is require the Department and other bodies it sets up to think very clearly how that data should be handled. I think that is a fair and reasonable point.
To quote from the Chairman of the Justice Committee, my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), about the scale of the problem at the moment:
“The scale of the data loss by Government bodies and contractors is truly shocking. But the evidence we have had points to further hidden problems. It is frankly incredible, for example, that the measures Revenue and Customs has put in place were not already standard procedure.”
This particular new clause has a requirement that there is a set of standard procedures for handling data loss relating to personal accounts before the pensions authorities actually begin to collect that data. So we are saying very clearly at the beginning that we regard this as vital and so important that we have sought to include the clause in the Bill. I do not see why the Minister cannot support that.
I hope that the review will introduce criminal charges for Departments that lose data, but we are proposing setting a standard and saying that, in future, when the DWP is collecting data—in this case about pensions—there will be clear guidance. People, including the Information Commissioner, will be involved in setting out that guidance, and it will follow from the review that there will be consequences if that personal data is not adequately protected. By having a code of practice, following up the review that the Prime Minister has commissioned and having legislation that makes data loss a criminal offence for Departments, we can provide people with a level of security for their personal data which they are not getting at the moment, and to which I believe they are entitled.
Under section 51 of the 2000 Act, it is the duty of the Information Commissioner to
“promote the following of good practice by data controllers and in particular so to perform his functions under the Act as to promote the observance of the requirements of this Act by data controllers.”
The commissioner has a legal duty which involves promoting the use of codes of practice for data protection, and is keen to be involved in further developing and amending them. It is in fact the commissioner who will do a lot of work to develop those codes.
Paul Rowen: I was listening with interest to what the Minister said. Is he aware of clause 71 of the Serious Crime Act 2007? It is relevant because my new clause is modelled on it. In other words, in a Bill that has just gone through the House, the Government have put in place very clear and explicit arrangements—in this case the code of practice for disclosures of information to prevent fraud. The Home Office has said very clearly that it will draw up a clear code of practice in conjunction with the Information Commissioner. It is not just relying on existing legislation, it is actually making a clear statement. If that is Government policy in the Home Office, does the Minister not accept that there is a very clear case for doing it here, which is what our amendment seeks to do?
Mr. O'Brien: The problem is that in respect of the area we are now covering—the pensions legislation and the bodies it is setting up—the Pensions Regulator and the DWP already have documents which are effective codes of practice. We work closely with the Information Commissioner in ensuring that they give full coverage. I say very clearly to the hon. Gentleman that we are satisfied, and the advice I have been given is, that PADA, the Personal Accounts Board that we are setting up, the Pensions Regulator and the Department are already covered. We do not need the new clause. Further, we have consulted the Information Commissioner; he has indicated that he is not seeking a statutory code of practice on the matter in addition to what he already has.
In effect, the Liberal Democrats are offering something that is not only covered by existing legislation but is not particularly wanted by the Information Commissioner. On that basis, I hope that the hon. Gentleman is duly reassured that what he is seeking to do is not in dispute—in the broad thrust at least, although I might quarrel with some of the detail. The broad thrust is not in dispute and is already covered. If the hon. Gentleman looks at the detail, he will find that what he seeks is already, generally, going to happen.
Paul Rowen: I listened carefully to the Minister and cannot say that I am reassured, because the DWP’s record in the area is hardly exemplary.
Mr. O'Brien: What record is the hon. Gentleman referring to? HMRC is not part of the DWP, but of a different Department. I am not sure what his “record” of the DWP specifically is. There have been one or two issues, but they have not been on the scale that he seems to be alluding to.
Paul Rowen: The Minister is aware of the data found on the roundabout in Torbay. I regard any loss of data, whether on 1 million people or on 10, as a serious issue. My view is that, yes, there are codes of practice across Government as a whole that are not operating to the level of security that they should be. Accepting that, I am more reassured by what the Information Commissioner said and I am sure that when we get the Prime Minister’s review we will have a further opportunity to pursue the matter. Therefore, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.

New Clause 17

Terminally ill claimants and the Pension Protection Fund
‘(1) Where the Board is satisfied that a qualifying member is “terminally ill”, that member, regardless of whether they have reached normal pension age, shall be entitled to a lump sum payment of an amount equal to twice what would be their annual entitlement under the scheme if they retired at normal pension age.
(2) A person is “terminally ill” at any time if at that time they suffer from a progressive disease and their death in consequence of that disease can reasonably be expected within 6 months.’.—[Mr. Borrow.]
Brought up, and read the First time.
Mr. David S. Borrow (South Ribble) (Lab): I beg to move, That the clause be read a Second time.
The clause is a modest one, which aims to deal with an anomaly in the Pension Protection Fund legislation. The issue was first raised by my hon. Friend the Member for Preston (Mr. Hendrick), who is my own Member of Parliament, in a ten-minute Bill debate in the House on 17 October last year. He raised the issue of members whose pension schemes have become insolvent and who are therefore reliant on the Pension Protection Fund for their future pensions but who, because they are under the age of 50, are barred by the rules from access to the funds in that fund. A small group of individuals, under their schemes that went insolvent, therefore necessitating the use of the Pension Protection Fund, had a provision that would have sometimes allowed them to have access to funds prior to the age of 50, particularly in those instances where they were terminally ill.
Generally the provision is for individuals who are medically certificated as having less than six months to live to have access to a lump sum. A similar provision exists within the financial assistance scheme, which was set up for those pension schemes that went insolvent prior to the Pension Protection Fund being set up. However, the provision is not at the moment in place for the Pension Protection Fund. A small number of individuals unfortunately reliant on the fund will find themselves to be terminally ill but unable to access any funds at all. Most final salary schemes recognise that, in such circumstances, it is reasonable to make a lump sum payment to help with the additional costs—heating, lighting, special food or diet and even that special family holiday that the individual would want in the final months of life.
1.15 pm
The provision would enable the board of the Pension Protection Fund to make a payment of two years’ worth of the pension that the individual would have been entitled to had he or she retired at the normal retirement age. It is a modest and not very expensive provision. It has been difficult to work out the number of individuals who have claimed such a provision within the financial assistance scheme because the numbers are so small. The issue has been overlooked, and I hope that my hon. and learned Friend will look favourably on the new clause.
Mr. O'Brien: I thank my hon. Friend for raising what is the important issue of a small number of people who are terminally ill and for whom the sort of financial security that might have been available from their pension scheme is not available from the PPF. It was raised—as he said—in a ten-minute Bill last October by our hon. Friend the Member for Preston. There are strong arguments for change and I welcome discussion of the issue.
Since the matter was first raised, my officials and I have been considering whether it would be possible to ensure early access to some of an individual’s compensation entitlement should they fall terminally ill before they reach normal retirement age or normal pension age. We still need to address some issues before we can make such a change to the PPF. We would need to ensure that changes that increased liabilities for the PPF were sensible and affordable. It is vital that the PPF maintain the confidence of other schemes that fund it through the levies. Any increased costs would need to be justifiable and not lead to disproportionate increases in the levies.
We also need to ensure that any changes do not place inappropriate burdens on the PPF, for example by requiring it to make difficult decisions about entitlements, which could lead to disputes or to a protracted decision-making process. Currently, eligibility for PPF compensation does not require the PPF to make those sorts of decisions and the Government believe that it is important for the good running of the fund that that should not change.
There are, however, some additional details that need to be considered, for example the impact on possible future compensation paid to survivors. I therefore welcome the opportunity to consider in more detail the proposals in the new clause with a view, I hope, to returning to the issue at a later stage of the Bill. At that point, I hope we will be in a position to bring forward a clear clause that ensures that we are able to deal with this lacuna, this gap in provision. I want to see that gap filled in due course. I hope that we will have a more positive response at a later stage.
Mr. Borrow: I am grateful for the comments of my hon. and learned Friend. I am sure that my hon. Friend the Member for Preston will raise the issue later in the proceedings, possibly on the floor of the House where he can participate fully in the discussions. I beg to ask leave to withdraw the motion.
Motion and clause , by leave, withdraw.
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