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Page 1, line 11, after ("be") insert ("so").

The noble Lord said: It has always been our intention that my right honourable friend the Secretary of State shall choose and appoint the chairman of the new authority. This technical amendment puts that beyond doubt by adding the word "so". I beg to move.

On Question, amendment agreed to.

Baroness Turner of Camden moved Amendment No. 3:

Page 1, line 11, at end insert:
("( ) The chairman shall be a person who appears to the Secretary of State to have experience of, and to have shown capacity in, the audit and regulation of pension schemes or other aspects of financial services.").

The noble Baroness said: In moving Amendment No. 3 I shall speak also to Amendments Nos. 10 and 11 with which it is grouped. The office of regulator is obviously a key one and that view was confirmed this afternoon by the Minister. The Goode Report recommended that the office of regulator and chair should be held on a full-time basis by an individual with a detailed understanding of the working of pension schemes and the personal authority not only to enforce statutory requirements but also to develop voluntary standards which should receive wide support.

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The new regulatory regime will replace the Occupational Pensions Board, of which I was a member for a long time. The members of that board were, in general, people with a knowledge of the industry and the staff were extremely expert. We had a series of competent and distinguished chairmen including the noble Lord, Lord Allen of Abbeydale, who I am pleased to see in his place this afternoon, and my noble friend Lord Brimelow. The board had plenty of expertise and produced excellent reports. But it did not possess the powers that many people thought it did. Its role was a limited one. People believed that it had more powers than in fact it had and we occasionally came in for unjustified criticism, as I remember we did particularly at the time of the Maxwell scandal.

The new body will have standing and power. It must command the respect and support of the pensions industry as well as the general public. The chair is therefore a key role and it is important that the right sort of person is appointed and acknowledged by all interested parties to have the right status, standing and expertise to carry through that function.

As I said earlier, the amendment is grouped with Amendments Nos. 10 and 11. Amendment No. 10 seeks to remove from the Bill the words,

    "The chairman of the Authority may at any time be removed from office by notice in writing given to him by the Secretary of State".

Amendment No. 11 relates to the powers under which the Secretary of State may remove ordinary members of the authority from such membership. The amendments seek to accelerate the authority and independence of the chair or the regulator. We do not believe that it is a good idea that, with apparently little notice except a notice in writing, the chair can be removed by the Secretary of State. It would be much more advisable to have the same provisions applying to him in regard to his removal as apply to other members of the council.

I hope that the Minister will realise that we are trying to strengthen the Bill, to heighten the independence and authority of the individual who will be chosen as chair and to make clear that he or she is an individual who has the right weight and authority to carry forward this important and key role. I beg to move.

Lord Mackay of Ardbrecknish: As the noble Baroness, Lady Turner, rightly said, the role of chairman will be particularly important in the authority. It is no doubt agreed between us all that the right individual should be appointed to the job. The chairman must be someone of sufficient stature to command the confidence of both scheme members and the business community that stands behind the occupational pension schemes.

Our intention is that the Secretary of State shall choose and appoint the chairman. It is in the interests of pension scheme members that the Secretary of State should also be able to remove the chairman should he or she not prove worthy of the post. We do not expect such a situation to arise and indeed we hope that it will not. But it is only wise in a Bill of this nature—which we trust will last for some considerable time—that we write onto the face of it the powers that the Secretary of

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State could use in the extreme circumstances in which it may be necessary to step in to remove and replace a chairman.

That is my response to Amendments Nos. 10 and 11. In regard to Amendment No. 3, which attempts to define who the Secretary of State should look at as chairman, I believe that a chairman will be appointed more on the basis of his intellectual and personal qualities, his leadership skills and impartiality rather than necessarily on the basis of his specific qualifications, whether in the field of audit and regulation or any other area of expertise. After all, other members of the authority will be selected for exactly those reasons. Clause 1(3) (c) states that one of the members will be,

    "knowledgable about life assurance business".

Another member must appear to the Secretary of State to,

    "have experience of, and to have shown capacity in, the management or administration of occupational pension schemes".

And two members must,

    "appear to the Secretary of State to be knowledgeable about occupational pension schemes".

There will therefore be members on the authority who are specifically selected for those purposes. That need not necessarily be the chairman.

The noble Baroness, Lady Turner, mentioned the Occupational Pensions Board and she may agree with me that the chairman of the Occupational Pensions Board has almost always been a lay person. It has not previously been felt necessary to select a chairman of the Occupational Pensions Board with the kind of narrow qualifications—if I may so describe them—as drawn in the amendment.

The appointment will be advertised and the recruitment process will be an open and fair one. We will therefore obtain the best possible person to chair that body. I hope that with those assurances of what we are looking for in the person of the chairman, the fact that the post will be advertised and how recruitment will be made, the noble Baroness will feel able to withdraw her amendment.

Baroness Turner of Camden: I thank the Minister for that explanation. I am glad to hear that the intention is that there shall be an open recruitment process and the post will be advertised with a view to appointing an appropriate and properly qualified person.

It was not always the case that the chair of the Occupational Pensions Board was held by a lay person. I remember serving at one time under a distinguished actuary who was a senior partner of a notable firm of actuaries and the deputy chair was always a professional person, in the sense that he was either an actuary or someone who had professional knowledge of the pension scene. It is important that whoever holds this post has the respect of what I may call the pensions industry and sufficient clout with people who operate in the financial services sector for the decisions reached to carry weight.

However, it is not my intention to press the amendment today. I am glad that we have on record the assurances of the Minister in regard to the recruitment process. He is right to say that Amendments Nos. 10

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and 11 are subsequent and, so to speak, subsidiary amendments. The amendment I moved was the main one. We shall study the assurances carefully when Hansard is available. With those comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Turner of Camden moved Amendment No. 4:

Page 1, line 21, at end insert:
("( ) a member who appears to the Secretary of State to be representative of consumer and public interests;").

The noble Baroness said: The Goode Committee recommended that there should be an advisory committee to support and advise the regulator on issues of general concern to act as a body through which the regulator could consult the pensions industry where appropriate. It would take over the present role of the OPB in giving advice to the Secretary of State both on general occupational pensions issues and proposed legislation. No doubt that is the body referred to in Clause 2 as the authority with a chair appointed by the Secretary of State.

The Goode Committee recommended that the body should represent a wide range of interests, including those of scheme members as well as pension providers. I believe that Clause 3 attempts to meet some of those recommendations. It does not, however, give any status to, or provide for any representation of, consumer interests. The Consumers' Association takes a good deal of interest in pensions issues and gives information and advice to members about pension provision. I recall, too, that on the Occupational Pensions Board there was always present a member who was clearly identified with, and linked to, consumer interests. I hope that the Minister will consider it appropriate to have such a provision in regard to the new advisory body.

I agree with the amendment relating to the representation of pensioners' interests in the name of the noble Baroness, Lady Seear, with which this amendment is grouped. There are a number of organisations representative of occupational pensioners; some have been lobbying Members of your Lordships' House about the Bill. Clearly, pensioners have an interest, perhaps even greater than that of scheme members still in employment. In theory, an employed member can at least look forward to some years of earning capacity, or perhaps even improvements and promotion. A pensioner has reached the end of the road. All that he or she has is the pension and whatever the scheme provides by way of uprating to meet inflation and other contingencies. Security is therefore of paramount concern to the pensioner. As proposed in the second amendment, it seems appropriate that provision should be made for the appointment to the body of a representative of occupational pensioners. I beg to move.

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