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Lord Skelmersdale: The Minister invited her noble friend Lady Turner to withdraw Amendment No. 1 on the basis of what she had just said, but she did not actually answer the question to which we all seek a response; that is, are three non-executive directors plus the regulator, himself non-executive, sufficient to cover the work of both the non-executive committee and, more important, the Determinations Panel, to be established under Clause 10? There is no reason why one or two of the non-executive directors should not be appointed to that panel.
Baroness Hollis of Heigham: I am sorry, but I thought that I had made that point clear. At present OPRA has nine members precisely because it is carrying out a determinations function which, quite legitimately, creates problems as regards chinese walls and so forth. Under the Bill, the Determinations Panel will have no overlapping membership at all. Therefore the members of the panel will be over and beyond the members of the Pensions Regulator. I said that in my response, and I am sorry if I did not make myself clear.
Lord Skelmersdale: I apologise, but the Minister speaks so fast sometimes that I find it very difficult to keep up. However, my original question still stands. There is a perfectly good non-executive committee that is given all sorts of roles. Is three plus the regulator enough for that purpose? I suspect that the answer must be no, in which case I say, for totally different reasons from the noble Baroness, Lady Turner, that there should be an unequal number of individuals on the non-executive committee.
Baroness Hollis of Heigham: I do not want to be rude, but I wonder whether we are making heavy weather of the provision. We are simply talking about a minimum. I am sure that, if the need is there and the workload justifies it, the chairman and/or the chief executive would make representations to the Secretary of State to increase the membership. At present, of the five people appointed by the Secretary of State, three would be non-executive, at least two would be from the staff, and there would be two others—the chairman, who is non-executive, and the chief executive, who might be regarded as a member of staff. Therefore, we would end up with four plus three. There should not then be a problem about majorities. As I say, we are talking about a minimum, so it is open to the Secretary of State to increase the number.
Lord Oakeshott of Seagrove Bay: However fast the Minister was speaking, I did not hear her answer my question about the appointment and what the timing would be. Will she confirm whether any advertisements have appeared for non-executives to the regulator? When is that likely to happen?
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Baroness Hollis of Heigham: I sought to answer that by saying that there would be no question of advertisements for members going out until the chairman had been appointed.
Baroness Turner of Camden: I thank all Members of the Committee who have participated in the debate, which has been very interesting. I would like to consider very carefully, as I always do, what the Minister said. I note that she said that the ball game was now different from OPRA. Presumably it is not the same as the Occupational Pensions Board, of which I was a member for 17 years. In those days, there was a trade union seat on that body. I did not occupy it; I was one of the then Minister's nominees, but the TUC had a right to be nominated.
Baroness Barker: In going away to consider the matter, might the noble Baroness consider in her efforts to secure representation the potential problem of how people in such categories would be nominated? How would one ensure representation of the groups that she seeks to have on the board?
Baroness Turner of Camden: Historically the TUC has been invited to make nominations for seats on the Occupational Pensions Board, and presumably on OPRA as well. I was not a member of OPRA, but I was for a long time a member of the Occupational Pensions Board, which had a specific seat allocated. The Minister put forward nominees, as did the industry. We had a board which, as far as the Minister was concerned, was representative of all the interests involved.
Certainly, my noble friends who have attached their names to the amendment are anxious to ensure that arrangements are made for interests to be represented, as am I. It may be that the wording is not very good—there may be all kinds of other ways in which this can be expressed—but we believe that it is necessary to have some indication that there will be representation for not only the interests of employees but the interests of the other bodies referred to in the amendment.
I note with interest and welcome what the Minister said about the increase in powers of member-nominated trustees. That is obviously very important. But this is a different matter; it is not about trustees but about an overall regulator for the industry as a whole and the interests of members who hope to benefit from what the industry can offer.
We shall consider very carefully what has been said and probably come back again at Report stage with another form of wording in order to ensure that the interests for which we think it is so important to secure representation are acknowledged on the face of the Bill. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins moved Amendment No. 2:
Page 1, line 11, leave out from "the" to end of line 12 and insert "chairman and approved by the Secretary of State"
The noble Lord said: The amendment may seem excessively cynical. In effect, it seeks to change the balance in the Bill from the Secretary of State making appointments after consulting the chairman, to the chairman making appointments with the approval of the Secretary of State.
It is important that the appointments should be impartial and there is some concern that there may be a degree of cronyism in such appointments. On the other hand, the Minister may be able to reassure me as far as that is concerned. I should be further reassured if she could make it clear that, if it is to be done by the Secretary of State, he may not make an appointment under subsection (2) unless the procedures recommended by the Office of the Commissioner for Public Appointments have been followed. Perhaps she will assure me that that is so.
There are provisions in the Bill for payment of pensions to staff and so on, but I am not absolutely clear whether these are to be full-time appointments. It may emerge later, but I am not sure whether an amendment has been tabled in that regard. Again, that is not irrelevant to the people making the appointments. My feeling is that they will have considerable responsibilities—certainly much greater than OPRA.
The noble Baroness has been forthcoming to some extent about the timing of these matters: is it the intention that the chairman and others will not be appointed until after the Bill has received Royal Assent? We ran into a little problem with the Energy Bill in regard to advertisements and appointments. Of course you can advertise if a Bill has had its Second Reading in the Commons—which applies to this Bill—but employers and employees would like to know roughly what the timing will be for getting the scheme up and running. Obviously we do not want to set it up, with the corresponding costs, until we get fairly close to the implementation of the Bill. I should be grateful if the noble Baroness would clarify these points.
Lord Borrie: This seems a modest suggestion. I am not sure whether the noble Lord, Lord Higgins, has done the same for the public protection board. I have not read that far into the amendments; perhaps he has.
He is suggesting a subtle change. However, it is not desirable because the Secretary of State, while of course consulting with the chairman—and this applies whether it is the regulator or the public protection board—should be responsible for the appointments because he or she is responsible to Parliament for the functioning of the Bill and the many different parts of it that we have to discuss in Committee. It is a subtle but undesirable change.
Baroness Hollis of Heigham: Amendment No. 2 would move the primary responsibility for the appointment of the members of the regulator from the Secretary of State to the chairman of the regulator. We believe that this raises significant accountability issues,
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which was an issue of concern at Second Reading. In establishing the new Pensions Regulator, we are seeking to achieve an appropriate balance of powers and responsibilities between the sponsoring department and the regulator. In that context, the regulator will be answerable to the Secretary of State and, through him, to Parliament.
We believe that it is right for the Secretary of State to take responsibility for ensuring two things. One is that the chairman is fully consulted and involved in the process of selecting the members of the regulator. The other—which goes back to our previous discussion—is that the board fully reflects the skills, knowledge and experience needed to run this key organisation. The effect of this amendment would be that these tasks would fall primarily to the chairman rather than to the Secretary of State. It is not appropriate to delegate such key responsibilities from the Secretary of State, who is directly answerable to Parliament.
On the specific questions on public appointments, the OPCA will be fully involved, as it was for OPRA. The expectation is that appointments will not necessarily be full-time but we cannot yet confirm that. Appointments will need to be advertised, but official appointments cannot be made before Royal Assent. We will write to noble Lords when we have a clear idea of the timetable. The chief executive has already been appointed: Tony Hobman, the chief executive of OPRA, will move across to the Pensions Regulator. The chairman has not been appointed. We will need a chairman in place before the Secretary of State can consult him about the rest of the members of the board. My understanding is that his appointment cannot legally be confirmed until after Royal Assent. I hope that answers noble Lords' questions.
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