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Lord Lucas moved Amendment No. 162AA:

Page 44, line 37, leave out ("amount or aggregate") and insert ("maximum amount").

On Question, amendment agreed to.

[Amendment No. 162B not moved.]

Clause 76, as amended, agreed to.

Clause 77 [Payments made in anticipation]:

Lord Lucas moved Amendment No. 163:

Page 44, leave out lines 43 to 46 and insert:
("(1) The Compensation Board may, on an application for compensation under section 75, make a payment or payments to the trustees of a trust scheme where in their opinion—
(a) section 74 applies, or may apply, to the application, and").

The noble Lord said: I spoke to this amendment with Amendment No. 159. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 163A:

Page 45, line 2, at end insert:
("but the Board have not determined the settlement date").

The noble Lord said: I spoke to this amendment with Amendment No. 161G. I beg to move.

On Question, amendment agreed to.

Baroness Seear moved Amendment No. 163AA:

Page 45, line 9, leave out ("the payment") and insert ("so much of the payment as they consider appropriate").

The noble Baroness said: This amendment seeks to give discretion to the compensation board not to demand the total payment if there is reason to believe that its application will be very draconian. It makes it possible for the compensation board to make adjustments for so much payment as it considers appropriate. Amendment No. 163AB seeks to insert:

The idea is that the compensation board does not have to go the whole way but can use its judgment in modifying the amount that it demands. I beg to move.

Baroness Turner of Camden: This amendment seems very reasonable to us and we support it.

Lord Mackay of Ardbrecknish: This amendment comes fairly close to the discussion that we had a few

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minutes ago. The compensation board will be able to make payments in anticipation to schemes. This is an essential measure to ensure, as I said in my intervention, that scheme members, particularly pensioners, do not suffer undue financial hardship. To ensure that the board can act quickly, it will be able to make these payments when it has reasonable grounds for believing that compensation is appropriate but before a final decision has been made. After further investigation, however, the board may decide that compensation is not, after all, appropriate. Therefore, there is provision for the board to recover any payments made. All payments of compensation are funded through a levy paid for by other schemes. I believe therefore that it is right that the board should have the power to make those recoveries.

The board has discretion over the recoveries that it makes and we do not envisage that it would press for recovery if the scheme has little or no assets. The clause as drafted would not prevent it making partial recovery if the scheme has insufficient assets to repay in full. It is the intention of the compensation board to assist members and not to penalise them.

We recognise that there is an important, more general issue, regarding recoveries made by the compensation board. I understand that there are concerns that the recovery of such payments may adversely affect members, as both the noble Baronesses indicated perhaps. The National Association of Pension Funds has already brought this matter to our attention and we have undertaken to consider the issues further. On that basis, I hope that the noble Baroness will agree to withdraw her amendments.

Baroness Seear: We are again grateful to the noble Lord for saying that he is prepared to consider these amendments. We are doing rather well tonight. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 163AB and 163B not moved.]

Clause 77, as amended, agreed to.

Clauses 78 and 79 agreed to.

Clause 80 [Schedules of payments to money purchase schemes]:

[Amendment No. 163BA not moved.]

Clause 80 agreed to.

[Amendment No. 163BB not moved.]

Clause 81 [Schedules of payments to money purchase schemes: supplementary]:

[Amendment No. 163C not moved.]

Clause 81 agreed to.

Clause 82 agreed to.

Lord Mackay of Ardbrecknish: I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

        House adjourned at twenty-nine minutes past ten o'clock.

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