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Lord Paul: My Lords, I thank my noble friend on the Front Bench for repeating the Statement. The

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question of pensions is turning into a nightmare. I should declare an interest as chairman of Caparo Group Ltd, which recently has generated a certain amount of news in the press.

I welcome the Pickering report, although I have not yet had a chance to look at it in detail. It is time to clarify matters so that everyone understands the outcomes of their pension schemes rather than having different results. Indeed, it is now becoming more difficult to run a company's pension scheme than it is to run the business itself. I ask the Government to look at what they can do to simplify the system as soon as possible.

Baroness Hollis of Heigham: My Lords, clarity and simplicity were precisely the terms of reference governing the Pickering report. My right honourable friend has already made it clear that the Government are extremely supportive of all moves towards greater simplicity.

Lord Prior: My Lords, is the noble Baroness aware that the Government's arguments in favour of taxation of dividends on pension funds are now running a little thin? They must have been thought up by a wizard in the Treasury who knew very little about how management works. Is there any hard evidence to suggest that investment, in particular in manufacturing industry, has increased as a result of the Government's actions?

Baroness Hollis of Heigham: My Lords, I cannot talk specifically about the manufacturing sector because the noble Lord will know as well as I do that different sectors grow or do not grow at different rates, thus influencing issues surrounding the European currency and so forth. Thus I am not able to give him any detailed information with regard to the manufacturing industry.

However, I can tell him that I have received assurances that, as a result of the changes that we have introduced, investment in industry has increased. Perhaps I may repeat what I said earlier. Obviously pensioners would like extra money through tax privileges. However, from our point of view it is equally important that the bedrock of pensions, reflected by the health of the companies that fund them, is protected. That is best secured by ensuring that companies continue to reinvest.

I should like to make a further point. The tone of noble Lords opposite would suggest that there is no government support for private sector pensions. At present I believe that we are spending something in the order of 45 billion on the range of state sector pensions; we are supplying 11 billion in NICs contracted-out rebates that help to fund occupational pensions. In addition, a sum in the order of 14 billion of taxpayers' money goes into tax reliefs, rebates and the like, sustaining and supporting the occupational pension industry.

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I do not think that the noble Lord, Lord Prior, should regard the occupational pension industry as under-supported by the current fiscal regime, particularly given that in this country we now have one of the lowest corporation tax levels on record.

Lord Christopher: My Lords, before going on to make one or two remarks, perhaps I may ask my noble friend on the Front Bench to reconsider the response she made just now in relation to public service pensions. If I recall correctly, she said that there was nothing in the Pickering report that could affect current members of company pension schemes. I hope that my noble friend Lord Paul is not listening to this, but it seems that this report may give a number of employers many ideas. We may well see some acceleration of changes in those pension schemes currently in payment.

I turn now to the brief points that I wish to put to my noble friend. First, the Statement refers to striking a balance between "innovation, competition and simplicity". As every Chancellor of the Exchequer proves with every Budget, innovation and competition add to greater complexity. We must ensure that, so far as we are able, we move forward with simple and worthwhile schemes.

Perhaps I may presume to offer a little advice. I should imagine that all noble Lords who have spoken in our debate are concerned about the problems with regard to survivors' benefits and indexing. Were I to give any advice at all, it would be to say quickly that the Government should not be minded to accept those recommendations. The Government will receive a far more positive response in that regard, certainly from the trades unions and the TUC, if they know that those recommendations have been put out of the way.

Lastly, it is my opinion that pension provision will be one of the big issues of the next general election. There is a pensions crisis. Unusually, it is not related solely to the vast bulk of working people. I should declare an interest here, but those looking forward to an "equitable life" are finding that it will be less so. There is a real problem here. Certainly we are going to see long-term problems with regard to the concept of the stakeholder pension. To that end, would my noble friend on the Front Bench consider approaching the Trades Union Congress? Good examples can be cited from the past, in particular in Israel with Histradut; that is, to have a scheme that is effectively endorsed and run by the trade union movement as a whole, with a view to providing the kind of pension systems which are badly needed.

Baroness Hollis of Heigham: My Lords, I look forward to reading my noble friend's contribution to the consultative document. No doubt the trade union movement will be active in promoting its views through that medium.

My noble friend knows well that I shall not give any undertakings with regard to the Government's response to one or two of the proposals. However, I listened with care to his points with regard to pension schemes and pensioners. I said earlier that the

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Pickering report made it clear that it was not referring to existing pensioners. However, that is not to say that Pickering does not believe that Section 67 of the Pensions Act 1995 may need to be amended to allow for alterations to schemes for the benefit of schemes as a whole. That is one of the proposals being put to us. We will consider it and see whether the problem is the size that Pickering believes it to be.

My noble friend Lord Christopher said there was a pensions crisis. There is a problem of longevity. Every decade people live two years longer. There is the medium-term problem of the stock market. I suspect that if it were trading at 6,000 to 6,500 there would not be some of today's concerns. There is a more immediate problem of lack of confidence in the pension industry built up through years of mis-selling, together with what happened at Equitable Life and the like. We are hoping that that combination of simplification and regulation will allow us, with Myners, in co-operation with the industry to develop a range of products that people will see as safe and secure vehicles for protection against poverty in their old age. The state is a partner; employers are a partner; and the industry is a partner.

I hope that many of your Lordships who have spoken in this interesting debate will contribute to the consultative process. I do not doubt that we shall return to the issues.

Proceeds of Crime Bill

4.31 p.m.

Read a third time.

Clause 19 [Provision of information by defendant]:

The Minister of State, Home Office (Lord Falconer of Thoroton) moved Amendment No. 1:

    Page 12, line 13, at end insert—

"(4A) Subsection (4) does not affect any power of the court to deal with the defendant in respect of a failure to comply with an order under this section."

The noble and learned Lord said: My Lords, in moving the amendment, I shall speak also to Amendments Nos. 3 and 5. The amendments return us to an issue discussed briefly in Committee and on Report. I indicated on Report that we would table them.

As your Lordships will be aware, if the defendant fails to comply with the court's order to provide information, the court has the power under Clause 19(4) to draw adverse inferences from the failure. The effect of the amendments is straightforward. They make it clear that the power to draw inferences does not affect any other powers the court has to deal with the defendant in that situation; notably, the power to punish the defendant by way of contempt for failing to comply with its order.

The power to draw adverse inferences will provide sufficient inducement to the defendant to respond in many situations, but it will not be fully effective where the defendant is ordered to provide general

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information and says nothing. The amendments will help to ensure that the defendant always responds to the court's order. By making it clear that the order to provide information attracts contempt for non-compliance, we will enhance its effectiveness. I beg to move.

On Question, amendment agreed to.

Clause 76 [Exceptional legal aid]:

Lord Goodhart moved Amendment No. 2:

    Page 49, line 35, at end insert—

"( ) For the purposes of this Part, a body corporate may have a criminal lifestyle."

The noble Lord said: My Lords, in moving the amendment, I shall speak also to Amendments Nos. 4 and 6. The amendments raise a short issue that should have been raised at an earlier stage. I regret that the question did not occur to me until Report stage, when I realised that there was a problem with the definition of what constitutes a criminal lifestyle.

The question is: can a company have a criminal lifestyle? I raised this matter briefly in debate, but the Attorney-General gave an off-the-cuff response and did not have time to give a considered response. I have therefore tabled the amendments to ensure we receive a proper expression of the Government's views.

The idea of a corporation having a lifestyle is odd. "Lifestyle" is defined in the Oxford English Dictionary as,

    "a way or style of living".

A corporation is a person in law, but it cannot be said in any real sense to live. Only a living person can have a lifestyle. In deciding for the purposes of Clause 76 whether a defendant has a criminal lifestyle, "defendant" must mean a living defendant. A company cannot have a lifestyle. If that is so, there is a big hole in the Bill.

Many offences under Schedule 2—quite apart from many that are not included but could be made the basis of a criminal lifestyle—can be committed by a body corporate. In such cases, the body corporate is usually the person who makes a profit and against whom a confiscation order needs to be made if it is to be effective.

It is clear that the Government intend the Bill to cover corporations that commit crimes and not just individuals. But it is far from clear that the Bill has that effect. On Report, the Attorney-General relied on the principle that the word "person" in a statute includes a body corporate under the Interpretation Act 1978. But that is subject to a context showing a contrary intention. The reference to "lifestyle" could be read by a court as showing such a contrary intention, particularly in view of the principle that a statute that imposes penalties must be read strictly in favour of the person against whom the penalties are claimed.

The definition of criminal lifestyle does not use the word "person". It refers to the defendant who has a criminal lifestyle, not the person who has a criminal lifestyle. Therefore, in interpreting Clause 76 a court would have to proceed without relying on the definition of "person" in the Interpretation Act.

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I am aware that this is a technical and legalistic argument. But unless the Government accept the amendments, a prosecution will face this argument sooner or later and could lose it. We have always made it clear that we wish to strengthen the Bill where it needs strengthening. We believe that in this case it needs clarification to strengthen it. I beg to move.

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