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Lord Higgins: I am not sure that I fully understand exactly what the noble Baroness said. I understand that she is referring to normal Cabinet Office guidance as regards the gratuity, pension or whatever being determined by the Secretary of State. But I do not understand, as regards paragraph (b) on page 234, that he may determine what provision he shall make. The implication seems to be that he will not fully finance whatever award he has made. This is a little inconvenient because we have to turn over from page 233 to page 234.
On the one hand, the regulator pays the amount that the Secretary of State has determined. On the other hand, the Secretary of State decides whether to pay the whole lot or not. I may be mistaken, but no doubt the noble Baroness can clarify this because it is not clear. In Amendment No. 10, we suggest deleting paragraph (b)—that is, the Secretary of State can determine how much of a provision to make. He has decided what should be paid. Then he will have a second bite of the cherry or, more accurately, not bite the cherry at all. I understand that there is slight confusion on the other side, but no doubt the noble Baroness will sort this out.
Baroness Hollis of Heigham: I was just clarifying. I think that what the noble Lord is pressing me on hinges on the word, "towards". I think that he is concerned about the weight being carried in paragraph (b), which states that,
for the payment of a pension, thus suggesting that there may be some part that is not. I think that it is the word "towards" on which the noble Lord is pressing me.
I am advised that that is the exact wording of Section 8 of Schedule 1 to the Pensions Act 1995. It is a straight lift from existing regulations in which salary, allowances, provisions and so forth made to members of the board are paid for entirely by the levy as currently exists. So no change is envisaged in the existing method of remuneration. Perhaps I may write to the noble Lord if there are any further points on this.
Lord Oakeshott of Seagrove Bay: There is one point that strikes me. Under what circumstances would pension payments be made to non-executive members? The combined code is very clear that non-executive directors' service is not pensionable. I seek clarification on that. It seems rather odd.
Baroness Hollis of Heigham: The noble Lord is right. My understanding is that we would not expect that for the run-of-the-mill non-executive directors. But, of course, the chairman is a non-executive director who would, as I understand it, be entitled to pensions and allowances. That covers that.
Lord Higgins: Well, it ought to say the chairman. I detect that in what the noble Lord, Lord Oakeshott,
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has just said, he, like me, has found that non-executive directors do not receive pensions. Suddenly, we seem to have a situation where they will. That may be in the Pensions Act 1995—which perhaps was not as closely scrutinised as we scrutinise now.
Baroness Hollis of Heigham: On the contrary, with the Opposition present, I can assure Members of the Committee that the Act was very fully scrutinised. I will check whether this is a problem. If it is, I shall either write to the noble Lord or come back to him.
Lord Higgins: The alternative is simply for the noble Baroness to put down an amendment at Report.
Baroness Hollis of Heigham: Let me first determine whether there is a problem to be addressed as opposed to whether the words might simply carry an imputation that needs to be corrected.
Lord Higgins: In the light of what the noble Baroness has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale moved Amendment No. 11:
The noble Lord said: My query is two-fold. First, under what circumstances might it be,
But my more important point is, who pays? Perhaps I can better explain that by asking out of whose budget the payment is to be made? Is it that of the Secretary of State or that of the regulator? After all, as we have been discussing in the previous amendment, it is a decision of the Secretary of State, which is made, presumably, after a discussion with the regulator. Although the Bill does not say that, surely it should be spelt out. Unless my surmise is incorrect, it would be helpful for the noble Baroness to give us an answer. I beg to move.
Baroness Hollis of Heigham: I hoped that I had covered this previously. It would be paid for by the regulator.
Lord Skelmersdale: I am grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins moved Amendment No. 12:
The noble Lord said: Amendment No. 12 raises the question of whether the Secretary of State should make available any additional staff. I think that it is also convenient to take Amendment No. 15, which states,
Since this body is effectively somewhat remote from central government, I am not clear why the question of whether it needs extra staff is to be determined by the Secretary of State.
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Earlier, we discussed the additional costs of this regulator against the present costs of OPRA. I expressed some hesitation about whether the additional costs or the increase in staff would be adequate to deal with the much heavier workload—as it seems to me—of the new regulator—certainly if it is to be proactive, focused and so forth. That might reasonably be decided by the chief executive in conjunction with other members of the regulator. Why the Secretary of State suddenly comes back into it, rather than it being done independently in the light of the workload, does not seem a very sensible way of proceeding. I beg to move.
Lord Oakeshott of Seagrove Bay: The noble Lord, Lord Higgins, makes a strong case. The Minister will need to be at her most persuasive to persuade me otherwise.
Baroness Hollis of Heigham: That sounds an irresistible invitation; I am not sure whether I shall succeed. It is custom and practice for the department to have such an arrangement. It is certainly in place with OPRA now, as empowered by the Pensions Act 1995. Schedule 1, paragraph 11(5) enables the Secretary of State to make available to OPRA additional staff, and vice versa. This secondment—that is what it is because their rations, so to speak, are paid for by their home employer and not the one to which they go—has proved useful to both the department and OPRA.
From personal experience, some of the policy briefing and some of the work on this Bill has come from OPRA staff who have been seconded to the DWP for that purpose. We would be denying ourselves a wealth of hands-on experience that is available to us. This is part of the standard workings of government departments. We second staff to appropriate bodies; they second staff back. I am used to it in other forums within the department. I should have thought that this is enriching for both sides and it is pretty standard.
Lord Higgins: Again, I am grateful to the noble Baroness. I am becoming increasingly suspicious of "pretty standard" things; not least because we were told on the previous amendment that it is what is in the 1995 Act. Now we are agreed that it needs to be looked at again. None the less, we will consider what the noble Baroness has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 13 to 15 not moved.]
Lord Higgins moved Amendment No. 16:
The noble Lord said: Amendment No. 16 concerns the Determinations Panel. This is a complicated point, which I shall seek to explain as best I may. It seems that Part 3 of Schedule 1 relates to Clause 10.
Baroness Hollis of Heigham: Is the noble Lord speaking to Amendment No. 16 together with Amendments Nos. 28 and 36 with which it is grouped?
Lord Higgins: Yes, that is right. I think that is the most convenient way to deal with this. In a sense, it is a drafting point, but it may be more substantive than that. No doubt we can establish the true position. It seems that Part 3 of Schedule 1 relates to Clause 10—"The Determinations Panel". Amendment No. 16 would leave Part 3 out of the Bill. Amendment No. 28 would reintroduce it as Schedule 1A, relating to Clause 10. That seems to be the way in which it ought to be done.
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