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Lord Mackay of Ardbrecknish: My Lords, there may be some to whom that applies, but there may be others to whom it does not apply. It seems a little unfair to those who are doing the job perfectly well—I am sorry that the noble Baroness intervened and spoke in a disparaging way about people who are doing the job at the moment, most of whom are doing it very well—to suggest that they should go off and attend some form of compulsory training. As I was saying, the amendment would also mean that the authority had to determine what could be regarded as an approved training course. We do not see a role for either the Government or for the authority in attempting to approve, regulate and set standards for the various training media that are available. More will no doubt become available as a result of the Bill and the publicity arising from it. We consider that the interventionist role envisaged in the amendment would be impracticable, costly and, we believe, unnecessary.

The amendment refers to "professional qualification". It is important to appreciate that trusteeship is not a job just for experts or professionals with particular qualifications. It is a job where lay volunteers have an important contribution to make. Anyone undertaking trustee duties must, of course, be well informed about his role and responsibilities. But personal qualities and an aptitude for the task are equally important.

The important point is not to make training compulsory but to ensure that trustees and potential trustees are fully aware of the role expected of them and the nature of their responsibilities. They must have access to information and guidance on how to carry out that role, including the various training options that are available to them. Training for trustees is essential. It is vitally important that trustee boards should contain properly trained and informed trustees who are fully aware of their role. However, rather than impose a regime of compulsory training which may or may not be appropriate for each individual, it is better for trustee

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boards, individual trustees and the sponsoring employer to decide the most appropriate form and method of training which will meet their particular needs.

The Government want to encourage trustee training and to this end we have made it a requirement that employers give paid time off for that purpose. We are also supporting the initiatives being taken by the pensions industry in the preparation of industry sponsored codes of practice and we know that those developing the codes are planning to cover training.

We do not believe that the amendment is the right way to proceed. I imagine it would be but a short step to compulsory examinations and the like. As a former schoolteacher dare I suggest that one can put people through courses but it does not necessarily mean that at the end of the day they learn much? It would be no time at all before we established an examinations board and the whole business would become over-regulated. I believe that the task we are discussing is a responsible and important one; it is not one for which we need the kind of professional qualifications that I envisage would follow, if we were not careful, the training proposed by the amendment, which, if it was to be properly understood, would mean establishing an examinations board and the like.

Baroness Dean of Thornton-le-Fylde: My Lords, the Minister has been less than generous in interpreting the amendment which is before the House this evening. He said that we do not want professionally qualified people but lay people. The Bill provides for special trustees to be put in place in particular circumstances who will have professional qualifications. We wanted to make sure that we were not attacked for having no regard for trustees who have professional qualifications.

The noble Baroness, Lady Seear, quite rightly chided me. She said that she could think of many jobs where people did not receive any training. I could probably match that, but I could not provide examples of many jobs which carry the penalties that this Bill imposes. That is the problem.

The Minister's arguments in response to the amendment this evening were shallow. They did not address the reasons for the amendment. The responsibilities of individual trustees under the Bill are such that they are entitled at least to some form of compulsory training. The amendment does not specify in detail what that would be. I am most disappointed that the Minister has not seen the sense of that. It is not a question of bureaucracy or the thin end of the wedge before we require academic qualifications. The intention is to make the Bill work and to put people in place who have the courage and the necessary knowledge to carry out their responsibilities.

Having said that, it is clear that the Minister has not been moved by an argument which stands on its own merits. It is with regret that I ask the leave of the House to withdraw the amendment.

Amendment, by leave, withdrawn.

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10 p.m.

Clause 39 [Professional advisers]:

[Amendment No. 90 not moved.]

Lord Lucas moved Amendment No. 91:

Page 22, line 28, at end insert:
("( ) For every trust scheme the assets of which consist of or include investments (within the meaning of the Financial Services Act 1986) there shall be an individual or a firm appointed by the trustees as fund manager.").

The noble Lord said: My Lords, in moving Amendment No. 91 I shall speak at the same time to Amendments Nos. 93, 94 and 96. Before doing so I should draw the attention of the House to an error in Amendment No. 93 as printed on the Marshalled List. It should read:

    "leave out ("and (2)") and insert ("to (3)")".

It is incorrectly printed as "("to (2)")".

Amendment No. 91 provides that trustees who intend to invest directly in investments which fall within the scope of the Financial Services Act must appoint an authorised fund manager. As drafted the Bill provides trustees with the power to delegate investment decisions to authorised fund managers but does not require them to appoint one. In view of the importance attached to scheme investments we consider it appropriate that the Bill should require trustees to appoint an appropriate person to manage those assets. That person may be an external fund manager or an appropriately authorised in-house fund manager. Amendments Nos. 93, 94 and 96 make changes consequential upon Amendment No. 91. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendments Nos. 92 to 96:

Page 22, line 33, leave out (" 3") and insert ("(Prohibition orders)").
Page 22, line 40, leave out ("and (2)") and insert ("to (3)").
Page 23, line 9, leave out from ("scheme") to ("sections") in line 10 and insert ("an auditor, actuary or fund manager is required under this section to be appointed but the appointment has not been made, or not been made in accordance with any requirements imposed under this section,").
Page 23, line 10, leave out (" 3") and insert ("(Prohibition orders)").
Page 23, line 12, leave out ("such an appointment") and insert ("compliance").

The noble Lord said: My Lords, I spoke to Amendment No. 92 with Amendment No. 3. I have also spoken to Amendments Nos. 93 to 96 with Amendment No. 91. I beg to move.

On Question, amendments agreed to.

Clause 40 ["Blowing the whistle"]:

[Amendment No. 97 not moved.]

Lord Lucas moved Amendment No. 98:

Page 23, line 36, at end insert:
("(5) If it appears to the Authority that an auditor or actuary has failed to comply with subsection (1) or (2), the Authority may by order disqualify him for being the auditor or, as the case may be, actuary of any trust scheme specified in the order.
(6) An order under subsection (5) may specify the scheme to which the failure relates, all schemes falling with any class or description of trust scheme or all trust schemes.

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(7) The Authority may, on the application of any person disqualified under this section who satisfies the Authority that he will in future comply with those subsections, revoke the order disqualifying him; but a revocation made at any time cannot affect anything done before that time.
(8) An auditor or actuary of a trust scheme who becomes disqualified under this section shall, while he is so disqualified, cease to be auditor or, as the case may be, actuary of any scheme specified in the order disqualifying him.
(9) A person who, while he is disqualified under this section, purports to act as auditor or actuary of a trust scheme specified in the order disqualifying him is guilty of an offence and liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum, and
(b) on conviction on indictment, to a fine or imprisonment, or both.
(10) An offence under subsection (9) may be charged by reference to any day or longer period of time; and a person may be convicted of a second or subsequent offence under that subsection by reference to any period of time following the preceding conviction of the offence.").

The noble Lord said: My Lords, the purpose of Amendment No. 98 is to provide within Clause 40 the powers to enable the authority to sanction auditors and actuaries who fail to comply with their duty to "blow the whistle".

The amendment introduces further powers for the authority, but our intention is that for the time being the new subsections will remain uncommenced. It is the same as we proposed for subsection (4) which allows the authority to fine auditors and actuaries. The reason is that we believe that the auditors' and actuaries' professional bodies are the ones best placed to discipline members who fail to comply with their statutory duty. Those bodies will take on this role as part of their already well-established professional disciplinary procedures which have an appropriate range of penalties—for example, the removal of a professional's practising certificate. We intend to introduce those additional powers only in the unlikely event that the respective professional bodies are unable or unwilling satisfactorily to discipline their members who breach the whistle-blowing duty.

The amendment allows the authority to disqualify a person from being an auditor or actuary of a trust scheme—if that person fails to comply with the duty to "blow the whistle". It also allows the authority to revoke a disqualification if, at a later date, it becomes satisfied that an auditor or actuary will in future comply with that duty. Those powers broadly reflect those contained in the Financial Services Act 1986 and the Insurance Companies Act 1982. Furthermore, it makes it a criminal offence for a person who is disqualified under this section to act as auditor or actuary of a trust scheme.

These sanctions are necessary, first, because the Pension Law Review Committee recommended that every breach of a duty should carry a sanction; secondly, because the authority needs to be able to enforce the whistle-blowing duty should the relevant professional bodies fail to do that; and, finally, because we wish to adopt an approach that is not out of step with that taken in other areas of regulation. I beg to move.

On Question, amendment agreed to.

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Clause 41 [Other responsibilities of trustees, employers, etc.]:

[Amendment No. 99 not moved.]

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