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Baroness Hollis of Heigham: My Lords, the noble Lord asked what was the purpose of the clause. Since we are not now in the Committee stage, I can give an answer and if he has more detailed questions I may have to respond to him in correspondence.
Clause 19 corrects a defect in the legislation which governs the financing of national insurance rebates for COMPS (contracted-out occupational money purchase pension schemes). It represents a technical amendment in relation to government accounting mechanisms and does not affect individuals in or employers running occupational pension schemes.
The Pension Schemes Act 1993 should provide for COMP rebates to be funded from the National Insurance Fund and for any rebate-associated recoveries to be paid into that fund.
However, through inadvertence--possibly because the noble Lord, Lord Goodhart, was not a Member of your Lordships' House at the time--no such provisions have been made. Instead, the legislation only provides for the age-related element of COMP rebates to be paid out of money provided by Parliament. Therefore, rebates have been paid from the Consolidated Fund.
The clause corrects Section 177 of the Pension Schemes Act 1993, the section which governs the general financing arrangements for that Act, to allow COMP rebates to be funded from the National Insurance Fund and for recoveries to be made direct to the fund. It also provides for the fund to reimburse the Consolidated Fund the moneys paid out during the current tax year in respect of such rebates. For completeness, the Northern Ireland legislation is also amended correspondingly.
I hope that that answers the noble Lord's question as to the purpose of Clause 19. It is to correct the Pension Schemes Act 1993. Because this is Report stage and we therefore do not engage in debate, I should be happy to follow up in writing any queries the noble Lord may have.
Lord Skelmersdale: My Lords, before the noble Baroness sits down, perhaps in her ultimate response, which must surely be by letter at this stage, she could answer a question from me. Subsections (3) and (4) of Clause 19 make it clear that repayment from the National Insurance Fund into the Consolidated Fund for the purposes mentioned by the Minister will be a short-term operation. The provision states:
- "during the period beginning with 1st April 1998 and ending with the passing of this Act".
Lord Higgins: My Lords, I am not sure that I am clearer than I was at the outset. Leaving to one side the broad political issues, if I understand the matter correctly, the noble Baroness does not suggest that the provision corrects something which results from the failure of the Government to agree to what was recommended by the Government Actuary. It all dates back to 1993. I am not clear what has been happening in the meantime and why the terms of the clause as it stands are so restricted in time. What has been going on between 1993 and now? If it has been all right since 1993, presumably people have not been paying out the sums without proper parliamentary authorisation. Why is it now necessary to make the change? The whole thing is a merry-go-round anyway and at the end of the day it makes no difference whether the money is paid out of the Consolidated Fund or the National Insurance Fund.
The money all comes from you and me and everyone else in the country, either by way of contributions or by way of tax. Obviously there is some case to be made for it being paid out of one fund or another and the noble Baroness would know about that. I should like to continue with the idea that there is a contributory principle, and so on, and to that extent it is best that it comes out of the National Insurance Fund. However, I really do not understand now, for one moment, what the situation is. No doubt the noble Baroness could perhaps write to us and, if necessary, we can put it on the record at Third Reading. Subject to that, I would not
wish to press the amendment, even though I am not the least bit clear as to what the consequences will be. I beg leave to withdraw the amendment.Amendment, by leave, withdrawn.
Clause 21 [Special provision for certain contracts]:
Baroness Hollis of Heigham moved Amendment No. 12:
The noble Baroness said: My Lords, in moving Amendment No. 12, I should like to speak also to Amendments Nos. 13 and 14. This is another group of technical amendments which I hope will not detain us long. I explained in Committee some of the complex contractual relationships with which we are dealing as part of the transfer of the CA to the IR. The amendments in this group deal with subsidiary contracts made under a framework agreement. Perhaps the best way of illustrating this is by an example. The department has a framework agreement with a supplier to provide desk-top computers at a set price. The department then places orders for individual computers under that agreement. This amendment simply allows those subsidiary contracts to be transferred or not, as the case may be, so that the same department, either the DSS or the Inland Revenue, holds the contracts for the whole lot. This is a straightforward and technical provision. I beg to move.
On Question, amendment agreed to.
Baroness Hollis of Heigham moved Amendments Nos. 13 and 14:
The noble Baroness said: My Lords, I beg to move these two amendments formally.
On Question, amendments agreed to.
Clause 22 [Power to transfer functions by Order in Council]:
Baroness Hollis of Heigham moved Amendment No. 15:
The noble Baroness said: My Lords, I beg to move Amendment No. 15 and at the same time speak to Amendments Nos. 16 and 17. As I said in Committee, Clause 22 is intended to allow us the flexibility in the light of operational experience to make adjustments by Order
These amendments add one small area to the scope of the clause so that it covers all the areas of contracted-out pension business. In addition to its functions under Part III of the Pension Schemes Act 1993, the contracted-out employment group of the Contributions Agency also carries out some functions under Section 7 of the Social Security Act 1986, which covers incentive payments made by the Secretary of State to pension schemes becoming contracted out between 1st January 1986 and 5th April 1993.
As drafted, Clause 22 does not cover this work and so Amendment No. 15 includes these functions in the clause and Amendment No. 17 add references to equivalent Northern Ireland legislation. Amendment No. 16 makes good the omission of Northern Ireland provisions which correspond with provisions referred to in subsection (2). I beg to move.
On Question, amendment agreed to.
Baroness Hollis of Heigham moved Amendment No. 16:
The noble Baroness said: My Lords, I beg to move Amendment No. 16 formally.
On Question, amendment agreed to.
Baroness Hollis of Heigham moved Amendment No. 17:
The noble Baroness said: My Lords, I have already spoken to this. I beg to move the amendment formally.
On Question, amendment agreed to.
Clause 23 [Corresponding provision for Northern Ireland]:
Page 10, line 25, leave out subsection (1) and insert--
("(1) This section applies to--
(a) any contract for the supply of goods or services to the Secretary of State which relates partly to functions transferred by virtue of this Act to the Board (in this section referred to as "transferred functions") and partly to functions retained by the Secretary of State (in this section referred to as "retained functions"), and
(b) any contract for the supply of goods or services to the Secretary of State which relates only to transferred functions or only to retained functions, but whose terms are wholly or partly determined in accordance with a contract falling within paragraph (a) above.").
Page 10, line 34, leave out ("functions transferred to them by virtue of this Act") and insert ("transferred functions").
Page 10, line 46, leave out ("functions transferred to them by virtue of this Act") and insert ("transferred functions").
Page 11, line 25, at end insert--
("(bb) any function under section 7 of the Social Security Act 1986 (occupational pension schemes becoming contracted-out between 1986 and 1993), so far as that section remains in force by virtue of paragraph 22 of Schedule 6 to the Pension Schemes Act 1993,").
Page 12, line 27, after ("Fund,") insert--
("( ) references to section 1(1) of the Social Security Contributions and Benefits Act 1992 and section 161(1) of the Social Security Administration Act 1992 have effect as references to section 1(1) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 and section 141(1) of the Social Security Administration (Northern Ireland) Act 1992,").
Page 12, line 27, after ("Fund,") insert--
("( ) references to section 7 of the Social Security Act 1986 and paragraph 22 of Schedule 6 to the Pension Schemes Act 1993 have effect as references to Article 9 of the Social Security (Northern Ireland) Order 1986 and paragraph 21 of Schedule 5 to the Pension Schemes (Northern Ireland) Act 1993,").
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