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Division No. 2


Acton, L.
Addington, L.
Allen of Abbeydale, L.
Allenby of Megiddo, V.
Archer of Sandwell, L.
Ashley of Stoke, L.
Avebury, L.
Bancroft, L.
Barnett, L.
Beaumont of Whitley, L.
Birk, B.
Blackstone, B.
Bruce of Donington, L.
Carmichael of Kelvingrove, L.
Cledwyn of Penrhos, L.
Clinton-Davis, L.
Cocks of Hartcliffe, L.
David, B.
Dean of Beswick, L.
Dean of Thornton-le-Fylde, B.
Desai, L.
Donaldson of Kingsbridge, L.
Dormand of Easington, L.
Eatwell, L.
Elis-Thomas, L.
Ennals, L.
Ezra, L.
Falkender, B.
Falkland, V.
Freyberg, L.
Gallacher, L.
Gladwin of Clee, L.
Gladwyn, L.
Gould of Potternewton, B. [Teller.]
Graham of Edmonton, L. [Teller.]
Gregson, L.
Grey, E.
Halsbury, E.
Hamwee, B.
Harris of Greenwich, L.
Haskel, L.
Henniker, L.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Hooson, L.
Irvine of Lairg, L.
Jay of Paddington, B.
Jeger, B.
Jenkins of Hillhead, L.
Jenkins of Putney, L.
Judd, L.
Kilbracken, L.
Kirkhill, L.
Lovell-Davis, L.
Mason of Barnsley, L.
Mayhew, L.
McGregor of Durris, L.
McIntosh of Haringey, L.
McNair, L.
Merlyn-Rees, L.
Meston, L.
Molloy, L.
Monkswell, L.
Morris of Castle Morris, L.
Mulley, L.
Nelson, E.
Nicol, B.
Ogmore, L.
Peston, L.
Phillips of Ellesmere, L.
Porter of Luddenham, L.
Rodgers of Quarry Bank, L.
Russell, E.
Sainsbury, L.
Seear, B.
Sefton of Garston, L.
Serota, B.
Shaughnessy, L.
Shepherd, L.
Simon, V.
Stallard, L.
Stedman, B.
Stoddart of Swindon, L.
Strabolgi, L.
Taylor of Gryfe, L.
Tenby, V.
Thomas of Walliswood, B.
Tope, L.
Tordoff, L.
Turner of Camden, B.
Wallace of Coslany, L.
White, B.
Wigoder, L.
Williams of Elvel, L.
Williams of Mostyn, L.


Aberdare, L.
Addison, V.
Ailsa, M.
Aldington, L.
Alexander of Tunis, E.
Ashbourne, L.
Astor of Hever, L.
Astor, V.
Belstead, L.
Birdwood, L.
Blaker, L.
Blatch, B.
Blyth, L.
Boardman, L.
Borthwick, L.
Boyd-Carpenter, L.
Brabazon of Tara, L.
Braine of Wheatley, L.
Brougham and Vaux, L.
Buckinghamshire, E.
Butterworth, L.
Cadman, L.
Caithness, E.
Campbell of Croy, L.
Carnegy of Lour, B.
Carnock, L.
Cawley, L.
Chesham, L.
Clanwilliam, E.
Clark of Kempston, L.
Colnbrook, L.
Constantine of Stanmore, L.
Cox, B.
Craigavon, V.
Cranborne, V. [Lord Privy Seal.]
Crathorne, L.
Cumberlege, B.
Davidson, V.
De Freyne, L.
Dean of Harptree, L.
Denham, L.
Dixon-Smith, L.
Elles, B.
Elton, L.
Faithfull, B.
Ferrers, E.
Fraser of Kilmorack, L.
Gainford, L.
Gardner of Parkes, B.
Geddes, L.
Goschen, V.
Gowrie, E.
Gray of Contin, L.
Gridley, L.
Hailsham of Saint Marylebone, L.
Harding of Petherton, L.
Harmar-Nicholls, L.
Hayhoe, L.
Hemphill, L.
Henley, L.
Hertford, M.
Hives, L.
Hogg, B.
Holderness, L.
Hood, V.
Hothfield, L.
Howe, E.
Inglewood, L. [Teller.]
Jenkin of Roding, L.
Johnston of Rockport, L.
Kimball, L.
Knollys, V.
Lauderdale, E.
Lindsay, E.
Lindsey and Abingdon, E.
Long, V.
Lucas, L.
Lyell, L.
McConnell, L.
Mackay of Ardbrecknish, L.
Mackay of Clashfern, L. [Lord Chancellor.]
Manton, L.
Merrivale, L.
Mersey, V.
Miller of Hendon, B.
Milne, L.
Milverton, L.
Monson, L.
Monteagle of Brandon, L.
Mountevans, L.
Mowbray and Stourton, L.
Moyne, L.
Munster, E.
Murton of Lindisfarne, L.
Newall, L.
Norfolk, D.
Northesk, E.
O'Cathain, B.
Oppenheim-Barnes, B.
Orr-Ewing, L.
Park of Monmouth, B.
Pender, L.
Peyton of Yeovil, L.
Pike, B.
Platt of Writtle, B.
Prior, L.
Rankeillour, L.
Rawlings, B.
Renwick, L.
Rodger of Earlsferry, L.
Saltoun of Abernethy, Ly.
Seccombe, B.
Selborne, E.
Shaw of Northstead, L.
Simon of Glaisdale, L.
Skelmersdale, L.
Slim, V.
St. Davids, V.
Strange, B.
Strathcarron, L.
Strathclyde, L. [Teller.]
Strathcona and Mount Royal, L.
Sudeley, L.
Swansea, L.
Swinfen, L.
Teviot, L.
Teynham, L.
Thomas of Gwydir, L.
Trumpington, B.
Vaux of Harrowden, L.
Wade of Chorlton, L.
Whitelaw, V.
Wise, L.
Wynford, L.
Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

13 Mar 1995 : Column 575

4.6 p.m.

Clause 3 [Removal or suspension of trustees]:

Lord Lucas moved Amendment No. 3:

Page 2, line 18, leave out from ("order") to ("in") in line 19 and insert ("prohibit a person from being a trustee of a particular trust scheme in any of the following circumstances.
(2) The circumstances are—
(a) that the Authority are satisfied that while being a trustee of the scheme the person has been").

The noble Lord said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 4, 6 to 14, 24, 25, 50, 51, 53, 60, 62, 76, 78, 82, 85, 92, 95, 100, 115, 125, 128, 134, 164, 166, 168, 172 and 173.

Lord Hailsham of Saint Marylebone: Well done!

Baroness Hollis of Heigham: Speech!

Lord Lucas: My Lords, we are dealing with a highly technical and, in its consequences, potentially wide-ranging Bill. We have maintained, and continue to maintain, an open mind on many of its aspects. Since its publication, we have continued to consult with interested organisations. We have listened carefully to what has been said in this House, and we have continued to conduct our own reviews of its provisions. The amendments are the first fruits of those reviews—a few additional improvements to the Bill.

The amendments relate to the authority's power to take action against trustees of occupational pension schemes. The integrity and diligence of the trustee is crucial to the security of pension rights. If it is established that, while acting as a trustee of a scheme, such a person puts that security at risk by failing to comply with his statutory duties, then the authority must have the power to prevent him from acting as a trustee of that scheme either now or in the future.

Amendment No. 3 replaces the authority's power to remove trustees with a power to prohibit them, thus enabling it to take action against those who are no longer serving as a trustee as well as those who are. That removes the loophole in the clause as currently drafted which would have allowed trustees to circumvent action being taken against them by the authority by removing themselves first. As a consequence of the amendment, it is necessary to delete references to the authority's power to remove trustees and replace them with references to the authority's power to prohibit trustees. Amendments Nos. 7, 8, 9,

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11, 12, 13, 14, 24, 25, 50, 51, 53, 60, 62, 76, 78, 82, 85, 92, 95, 100, 115, 125, 128, 134, 164, 166, 168, 172 and 173 do just that.

Lord Hailsham of Saint Marylebone: Well said!

Baroness Hollis of Heigham: My Lords, it is getting better.

Lord Lucas: Yes, my Lords.

Amendment No. 4 adds to the list of circumstances in which the authority may prohibit a person from being a trustee of a particular occupational pension scheme. It allows the authority to prohibit a company or Scottish partnership from being a trustee of a particular scheme where any director of the company, or partner of the partnership, is himself prohibited from being a trustee of the scheme. This is necessary to prevent an individual's prohibition being circumvented by his establishing a company or Scottish partnership.

It also allows the authority to prohibit a person from being a trustee of a particular scheme where that person is a director of a company which is itself prohibited from acting as a trustee by the authority. The authority may only do this where it is satisfied that the company was prohibited because of the consent, connivance or neglect of the particular director. This ensures that a director whose actions contributed to his company being prohibited can himself be prohibited from acting as a trustee. Without this provision, such directors could continue to hide behind the corporate veil and could simply set up a new trustee company and continue to act as before.

The amendment allows a list of circumstances in which the authority may prohibit a trustee to be extended through regulations. Rather than give the authority a wide power to prohibit individuals from being scheme trustees, on the face of the Bill we have sought to specify all the situations where we believe this power should be exercised. The flexibility to add to the list through regulation is needed in case, in the light of experience, other situations arise where it would be desirable for the authority to be able to prohibit an individual from being a scheme trustee.

The remainder of Amendment No. 4 is concerned with the authority's power to suspend trustees, clarifying and adding to the provisions that are already contained in the Bill in Clause 3. It extends the suspension provisions to allow the authority to suspend trustees who are facing legal action that could lead to them being automatically disqualified in Clause 24. It also allows such a suspension to remain in effect until the proceedings in question are concluded. This is necessary because court action—for example, in respect of a criminal breach—may take longer than the two year limit on the length of suspension that would otherwise apply.

The new subsection (3B) sets down the effects that a suspension order may have, and new subsection (3C) provides that a suspension order may be made in respect of proceedings, petitions or applications made before or after the coming into force of subsection (3). Subsection (4) provides that the authority may, on the application of a person who has been suspended, revoke the suspension order either generally or in relation to a

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particular scheme or class of schemes. This addresses anxieties raised at the Committee stage by the noble Baroness, Lady Hollis, the noble Lord, Lord Monkswell, and my noble friend Lord Buckinghamshire, about the need to enable a person who has been suspended by the authority to apply for his suspension to be annulled and for him to be exonerated. It brings the process in line with that for trustees who have been prohibited or disqualified.

Amendment No. 6 is consequential on Amendments Nos. 3 and 4. It splits the amended Clause 3 into two, creating a first clause dealing with prohibition orders and a second dealing with suspension orders. The final amendment in this group, Amendment No. 10, further clarifies the procedure the authority must follow when suspending a trustee. It requires the authority to give immediate notice to the person it is suspending. It also requires the authority to give notice of the fact to the other trustees of any scheme affected by the suspension, except where a trustee cannot be found or has no known address in the United Kingdom. The authority's powers to suspend and prohibit trustees are essential elements of the new regulatory framework. They will allow the authority to protect the interests of scheme members by ensuring that trustees who fail in their statutory responsibilities are prevented from acting as scheme trustees. I beg to move.

4.15 p.m.

Baroness Hollis of Heigham: My Lords, this array of amendments—Amendment No. 3 and all the others, whichever they are—invents two new animals: a prohibition order and a suspension order, in place of the original powers to remove or suspend. I do not think we have any particular objection to that at all. However, if I may trouble your Lordships, I wish to raise a general point. We are now at Report stage. We have 171 amendments down for discussion today, 80 of which—almost half—have come from the Government at Report stage.

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