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Lord Mackay of Ardbrecknish: My Lords, my noble friend has caught me rather late at night, not paying the close attention to his argument that I ought

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to have done. If he will allow me—since I do not normally do so, perhaps the House will forgive me—perhaps I may take refuge in sending him a letter.

Lord Haskel: My Lords, I shall take a leaf out of the Minister's book and take refuge by saying that I shall study carefully what he said. These are complicated amendments. I am most grateful to the Minister for going into such detail in his response. I still do not quite understand why he does not take this opportunity to save money and reduce the subsidies to the personal pension schemes. I suspect it is because the Minister wants people to take out personal pension schemes. However, I shall study what he said in detail in Hansard tomorrow and meanwhile I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 205 not moved.]

Clause 122 [Minimum contributions towards appropriate personal pension schemes]:

[Amendments Nos. 206 and 207 not moved.]

Lord Haskel moved Amendment No. 208:

After Clause 128, insert the following new clause:


(" . In the Limitation Act 1980, after section 4A there is inserted—
"Special time limit for actions in respect of personal pensions, etc.

4B. An action founded on a claim that a person has suffered loss as a consequence of leaving an occupational pension scheme and becoming a member of a personal pension scheme under the Pension Schemes Act 1993 may not be brought after the expiration of six years from the date on which the person became aware of his loss, but the right of action in such a case shall not be barred by any failure to obtain information as to whether a loss has been suffered which is attributable to the failure of another person to provide such information.".").

The noble Lord said: My Lords, this amendment tries to calm the fears of those who are victims of the mis-selling of personal pensions, about which the Minister told us a few minutes ago. Your Lordships will remember the scandal of those in the pensions industry who sold personal pensions on the basis of "best commission" instead of on the basis of "best advice", as they were required to do. As the Minister told us, the SIB is now trying to rectify the position by reviewing pensions sold in that manner. If there has been any mis-selling, there must be financial compensation.

The exercise is expected to be expensive for many insurance companies and independent financial intermediaries. If there has been mis-selling, the insurance companies can probably afford to pay the compensation, but many intermediaries may not. Because of that, there is a suspicion that some intermediaries will simply drag their feet, in the hope that eventually claims will be barred by the usual time limit of six years for bringing a case to court.

The SIB has two years to carry out its review and the six years do not start until there is "reasonable knowledge". However, there is some concern that the reasonable knowledge could be construed to start when the publicity came out and people should have started to act then instead of waiting to be contacted. That may

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encourage those who have mis-sold pensions to drag their feet. The amendment will render that meaningless, avoid any doubt and clarify the position. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, as the noble Lord said, the amendment affects people who have suffered loss as a result of being advised to transfer from an occupational pension scheme into a personal pension scheme. Its aim is to allow them to bring an action in respect of that loss after the expiry of the six-year time limit imposed by the Limitation Act 1980. This would apply in cases where a third person has failed to give them information about whether a loss had been suffered.

The Securities and Investments Board, the chief investments regulator, last year issued guidance on mis-selling of personal pensions to people in occupational pension schemes. This covered how to recognise mis-selling and how to calculate redress where due. It specified cases for automatic review, together with a timetable for carrying out the task.

That means that those people concerned who fall within the priority groups identified by the SIB will have their cases looked at again to see whether they have suffered loss as a result of bad advice. The priority groups are those who have started to draw their pensions; men aged 55 or more and women aged 50 or more at the time of the transfer; and those who have died. People who are not in the priority group but have transferred into a personal pension can also ask to have their cases looked at again. Where loss is found to have resulted from bad advice, whoever is responsible for giving that advice will have to offer appropriate redress. This may mean reinstatement into the occupational scheme where that is possible, or a top-up of the personal pension plan.

By requiring firms to review past business, SIB has sought to remove the need for individual investors to spend time and money on legal proceedings. Where investors nevertheless seek to pursue their claims through the courts, I understand the noble Lord's anxieties about time barring. But I believe that these are misplaced. Under the Latent Damage Act 1986, investors have three years from the date on which they receive the relevant facts in which to bring a claim. The review timetable set down by SIB should therefore mean that there are few, if any, cases where time barring is an issue. If such cases should arise, SIB and the other regulators will consider whether further action is necessary to protect investors. The Personal Investment Authority said on 22nd February that firms should complete reviews in all circumstances where they had reason to believe that a relevant limitation period might be about to expire. If such a period was exceeded, an investor would still be entitled to lodge a complaint with the ombudsman. I understand that the ombudsman would be likely to exercise his discretion in favour of investors whose rights had become time barred because of delays engendered by the review process itself.

The Government's first priority in financial services regulation remains investor protection. The action taken by SIB and the PIA is an example of how the regulators can act to ensure that people are properly protected.

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I hope that with my explanation of how we envisage that the procedures will work, together with my assurance that there are safeguards—in case anybody decides to drag this out —the noble Lord will appreciate that his amendment is unnecessary and will withdraw it. I am, however, glad to have the opportunity to place on record again exactly those procedures which have been set out to deal with this problem.

Lord Haskel: My Lords, I thank the Minister for his reassurance. I am sure that people who have any doubt about whether their claims can be time-barred will be gratified by his reply. In view of the very strong reassurance that he has given, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 5 [Amendments relating to Part III]:

Lord Lucas moved Amendments Nos. 209 and 210:

Page 121, leave out lines 12 and 13.
Page 123, line 7, leave out paragraph 16 and insert:
(". Section 24 (sufficiency of resources) is repealed.
. In section 25 (conditions as to investments, etc.)—
(a) subsections (1) and (3) are repealed, and
(b) for subsection (2) there is substituted—
"(2) A salary related contracted-out scheme must, in relation to any earner's service before the principal appointed day, comply with any requirements prescribed for the purpose of securing that—
(a) the Secretary of State is kept informed about any matters affecting the security of the minimum pensions guaranteed under the scheme, and
(b) the resources of the scheme are brought to and are maintained at a level satisfactory to the Secretary of State.".").

The noble Lord said: My Lords, I spoke to Amendments Nos. 209 and 210 together with Amendment No. 197. I beg to move both amendments en bloc.

On Question, amendments agreed to.

Lord Lucas moved Amendment No. 211:

Page 125, leave out lines 20 to 22 and insert:
("( ) in subsection (1)—
(i) paragraph (a) is omitted,
(ii) in paragraph (b), for "that section" there is substituted "section 58", and
(iii) paragraph (c) is omitted,
( ) subsection (2) is omitted,
( ) in subsection (3)—
( ) paragraph (a) is omitted,").

The noble Lord said: My Lords, I beg to move Amendment No. 211. Some noble Lords may feel that this amendment comes perilously close to painting the lily or gilding refined gold. Its sole effect is to beautify the drafting of government amendments made at Committee stage.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 212:

Page 125, line 32, at end insert:
(". In section 84(5), paragraph (b) and the preceding "or" are omitted.").

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The noble Lord said: My Lords, I beg to move Amendment No. 212. The provision in the Bill to dissolve the Occupational Pensions Board has caused us to look again at the power which allows the board to approve a scheme's alternative revaluation arrangements. This power has never been used, nor is it needed.

On Question, amendment agreed to.

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