Previous Section Back to Table of Contents Lords Hansard Home Page

Viscount Ullswater: My Lords, I am delighted to reply to the noble Lord, Lord Stoddart. I remember from my early days spent in Wiltshire not far from Swindon that the noble Lord represented that proud town for such a long time. I am glad that he welcomes the Statement. It would certainly give me a little more indication of where Thamesdown is if it reverted to the name of Swindon. But that is my personal opinion. I am certain that Wiltshire will also be pleased with the decision.

I am glad that the noble Lord accepts my right honourable friend's decision about Berkshire. I know that he had a long connection with Reading and that he would indicate that a unitary authority in Reading would be the right thing.

During the course of this long-running affair the county council has changed its stance. It would be a question of changing it again if it were really going to welcome the change. Perhaps it is a little early, as it has only just heard the news, for the county council to indicate where it stands. The noble Baroness, Lady Hollis, indicated that at an earlier stage the county council supported the division into unitary authorities. On that basis there is hope that it may now also support the decision taken by my right honourable friend.

Lord Jenkin of Roding: My Lords, perhaps I may direct my noble friend's attention once again to Essex. Whereas most people accepted that Southend should have unitary government, it seems slightly bizarre that the Government should want to reopen the issue surrounding Basildon and Thurrock when 69 per cent. of the people in the area voted for a two-tier system. My noble friend Lord Aldington raised a similar point with regard to Kent. Would it not be even more bizarre if we ended up with Basildon and Thurrock being a unitary authority while a proud and historic city like Colchester would be part of a two-tier system? How is it possible to distinguish in this matter? There is a widespread feeling in Essex that the argument has gone on long enough and that Southend should have unitary government and the rest should be left as a two-tier system. That would be a very fair solution.

Viscount Ullswater: My Lords, I take note of what my noble friend has said. I shall report to my right honourable friend all the comments that have been made about the reaction to the Statement today. There is concern and there was concern in the mind of the Local Government Commission when it was considering Basildon and its boundaries. The commission will re-review Basildon and Thurrock to see whether they should have unitary status, although it will be reviewing them only on their existing boundaries. There is a good case for both. My right honourable friend has indicated that those are areas with high populations and that the Local Government Commission should be given the task of looking at them once again. As I said to my noble friend Lord Aldington, the commission will take note of public opinion.

21 Mar 1995 : Column 1153

Pensions Bill [H.L.]

4.40 p.m.

Clause 42 ["Blowing the whistle"]:

Baroness Seear moved Amendment No. 2:

Page 25, line 37, leave out ("immediately") and insert ("after informing the trustees").

The noble Baroness said: My Lords, at previous stages we made it clear from these Benches that we were not at all happy with the limited powers of the regulator and that we believed that he should be given greater powers than are afforded him under the Bill. We are particularly unhappy about the fact that the regulator is relying on whistle blowing by the actuary, auditors and members of the trustees, and that it is on their willingness to whistle blow and to draw the attention of the regulator to what they regard as irregularities or potential irregularities that the regulator must rely.

I know well what the Minister will say in reply because he said it at previous stages. I do not suppose that I have been any more successful in changing his mind on this than on any other matter with which we have dealt during the passage of the Bill. However, I should like at least to draw the attention of the House to what seems a most unsatisfactory characteristic of the policy of relying on whistle-blowers. I refer to the fact that they work for the organisation against which they have to blow the whistle. That puts them into a position of conflict of interest which, in my view, is extremely undesirable. It will surely tempt them to turn a blind eye if they possibly can. People will not want to be placed in such a position involving a conflict of interest.

It seems to me that the only way in which the auditor and actuary can honourably blow the whistle against the people for whom they are working and by whom they are paid will be if they inform those people that they are proposing to blow the whistle. I know that objections can be raised that, if they do that, steps will immediately be taken to conceal the material that might show that all is not going well. However, it is not necessarily easy to conceal such evidence. The provisions that I am suggesting would at least put the actuary and the auditor into a position that they can honourably accept so that they can work for an organisation at the same time as revealing to the regulator matters that they consider to be unsatisfactory within that organisation. I beg to move.

Lord Ezra: My Lords, I support my noble friend in this amendment, which raises a very important issue. I have been in industry all my life—for nearly 50 years—and, whether in the public or the private sector, we have employed auditors. The role of the auditor was not only to perform his audit function but also to advise us when we were doing things which were running counter to the regulations laid down in company law or in other ways. A relationship of trust is therefore built up. I have never experienced a situation in which a company in which I have served, whether publicly or privately owned, did not pay serious attention to its auditor's comments. The last thing that we ever wanted was to have an unfavourable comment when the annual accounts were presented to the shareholders.

21 Mar 1995 : Column 1154

Trustees are being asked to serve in a voluntary capacity. That is a difficult situation. If they are to be unaware of the fact that their professional advisers are likely to blow the whistle, I believe that that relationship of trust between advisers and enterprises could be seriously damaged. If the Government were to propose a similar arrangement to this whereby company auditors could whistle blow without advising their companies in advance, I would regard it as a most reprehensible step.

Like my noble friend Lady Seear, I fail to see how professional advisers can properly undertake their task of responsibility towards those whom they are advising without letting them know in advance if they are doing something which the advisers feel duty bound to refer to the regulator. Most trustees would then immediately set about correcting that difficulty. It is wrong that they should not be given such an opportunity. However, under the clause, I presume that the first the trustees would know about the apprehensions of their professional advisers would be when they received a letter from the regulator stating that he had been advised by the advisers that the trustees had gone wrong. I believe that that is the wrong way to set about this. If we want people to serve as trustees—that is, in a purely voluntary capacity—we must put them in a position of being able to develop trust between themselves and their professional advisers. Therefore, I very much hope that the Government will recognise the force of the argument and either accept the amendment today or agree that a similar amendment should be made in another place.

4.45 p.m.

Baroness Turner of Camden: My Lords, I rise briefly to say that we on these Benches support the amendment that has been moved by the noble Baroness, Lady Seear, and supported by the noble Lord, Lord Ezra. I cannot understand any basis for opposing it. It seems entirely sensible that an auditor or an actuary of any trust scheme must first, before giving a written report to the authority on any prescribed matter, inform the trustees about it. If there is to be any opposition to the amendment, I cannot understand of what it can possibly consist.

Lord Mackay of Ardbrecknish: My Lords, I have listened with interest to the arguments that have been advanced from the Benches opposite. We have discussed this matter previously and, as I have said at earlier stages, I do not consider that the amendment in the name of the noble Baroness, Lady Seear, is either necessary or wise.

Clause 42 does not actually prevent the auditor or actuary from informing the trustees that he is making a report to the authority. In fact, under the terms of engagement drawn up under Clause 41, his first duty will be to the trustees. I imagine therefore that it would be very rare for an actuary or auditor, when blowing the whistle to the authority, not to report the matter to the trustees at the same time. However, having said that, we see no case for making it a requirement. After all, it might be the trustees who are responsible for the

21 Mar 1995 : Column 1155

misdemeanour. In that case, and depending on the circumstances, it might be totally inappropriate to alert them for fear of prejudicing any investigation.

Turning to the word "immediately" which the amendment seeks to remove, I believe that the word is a necessary part of the clause. Our prime objective must be the security of members' pension entitlements. If there is any reason to believe that the statutory requirements are not being met, it is vital that reports should be made to the authority without delay. I am surprised that noble Lords opposite are suggesting that there might be such a delay. The authority can then investigate concerns at the earliest possible opportunity. Surely that is the best way to ensure that members get the protection and security that they need and deserve.

A trust board which carries out its duties properly and responds rapidly to any notification of something going wrong will have nothing to fear from the authority. It should be able to maintain a constructive relationship with the authority while putting things right, and with its auditors and actuaries, and then benefit from getting a clean bill of health from the authority at the end of the day.

I hope that in light of my explanation the noble Baroness will feel able to withdraw her amendment. However, if she does not, I hope that my noble friends will join me in the Division Lobby.

Next Section Back to Table of Contents Lords Hansard Home Page