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Baroness Hollis of Heigham: Why?
Lord Higgins: The noble Baroness asks why. The provision does not fall appropriately in Schedule 1, which is largely related to parts of the Bill not concerned with the Determinations Panel. It is a drafting point. Perhaps I may try the argument again. Part 3 of Schedule 1 relates to Clause 10, whereas the rest of Schedule 1 does not. It relates to earlier parts of the Bill. Therefore, this group of amendments sets up a separate schedule which would relate to Clause 10. Currently, Schedule 1 deals with matters that ought to be dealt with separately. I beg to move.
The Deputy Chairman of Committees (Lord Brougham and Vaux): I remind the Committee that if Amendment No. 16 is agreed to I cannot call Amendments Nos. 17 to 24.
Lord Borrie: Part 1 of the Bill is headed, "The Pensions Regulator". Within Part 1, Clause 10 deals with the Determinations Panel. That seems to be paralleled in Schedule 1—headed, "The Pensions Regulator"—where one would expect to find details on all aspects of Part 1 of the Bill dealt with, including membership of the Determinations Panel. I am not sure what is wrong with the present drafting in that respect.
Baroness Hollis of Heigham: I see what the noble Lord seeks to do. But this part of the Bill is about "pay and rations". Throughout Schedule 1 there are references—for example, on page 242 of the Bill—to the nature of disqualification of members of the Determinations Panel. Right through the schedule there is an understanding that the Determinations Panel is part of the regulator, although there are no overlapping members between the non-executive and executive members of the regulator with the membership of the Determinations Panel. Conceptually, it is all part of the regulatory function. Therefore, throughout that schedule, there are numerous references. Obviously, we have followed the advice of parliamentary counsel that this is the appropriate place to put it, which makes perfectly
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good sense. I am not persuaded that we add anything to clarity or understanding by pulling it out into a separate schedule.
Lord Higgins: I have heard what the noble Lord, Lord Borrie, said, and I take his point. I simply refer to what extent the Determinations Panel, while under the overall aegis of the regulator, would really be a separate body. That emerged from some of the remarks made by the noble Baroness earlier. I shall think again about this and, if need be, return to it at Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins moved Amendment No. 17:
"11 The chairman of the Determination Panel must be appointed by the Regulator."
The noble Lord said: We come here to the various provisions for the Determinations Panel. It seemed to us that this would be a more appropriate way of making the appointment. I beg to move.
Baroness Hollis of Heigham: Amendment No. 17 seeks to remove the provision for an appointments panel to appoint the chairman of the Determinations Panel, and instead allow the regulator to make that appointment.
I will not go into the functions and purposes of the Determinations Panel at this stage. We have modelled our proposals on the regulatory decisions committee of the Financial Services Authority. Your Lordships will remember, although I was not a player in that Bill, that it was thought important by the House to ensure separation between investigation and decision-making. In setting up the determinations procedure, we have therefore followed the Financial Services Authority model—that means the chairman of the Regulatory Determinations Committee being appointed by the regulator on the recommendation of an independent group established by the regulator for that purpose.
Suitable people on that committee could, for example, come from the Department for Constitutional Affairs, and the Council on Tribunals, to ensure that the chairman has the appropriate decision-making skills. A non-executive member of the regulator will, as is the case with the FSA, chair that independent group on the appointment. The regulator also appoints all other members of the Determinations Panel on the recommendation of the chairman of the Determinations Panel. Again, that mirrors FSA procedures. I hope that the noble Lord will be content with that explanation.
Lord Higgins: I am grateful for that explanation, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Higgins moved Amendment No. 18:
The noble Lord said: This is almost a traditional amendment. The top of page 236 states:
"The Regulator may pay, or make provision for paying, the members of the Determinations Panel such remuneration as the Secretary of State may determine".
The implication of that seems to be that they may be amateurs rather than professionals. Therefore, it seems strange. One would have thought that the regulator must pay, or make provision for paying, the members of the Determinations Panel. We are not clear why he is apparently given discretion. No doubt the noble Baroness can tell us. I beg to move.
Baroness Hollis of Heigham: Am I right in thinking that Amendments Nos. 18 and 19 are grouped? No, it is Amendments Nos. 18 and 20. I take it that the noble Lord is also speaking to Amendment No. 20.
The amendments seek to shift responsibility for determining the appropriate provisions for paying Determinations Panel members from the Secretary of State to the regulator. That is the effect of the amendment. As I have already explained, the Determinations Panel is there to ensure an appropriate degree of independence from those who investigate and those who take decisions, to ensure that the procedures are seen as fair. It would be inconsistent with that approach for the regulator to have sole control over the pay of the Determinations Panel. It is more appropriate, following non-departmental public body guidelines as reflected in the Cabinet Office and so on, for the Secretary of State to determine the appropriate remuneration for panel members. I hope that the noble Lord will feel able to withdraw his amendment.
Lord Higgins: I think we are slightly at cross purposes. The clause as it stands states:
I assume that he will pay—indeed, he must pay—the members of the Determinations Panel, unless of course they are to be amateurs. I do not imagine that that is what the Government envisage. The reply given by the noble Baroness does not make the point.
Baroness Hollis of Heigham: The point is whether it is to be the regulator or the Secretary of State—and the Secretary of State sets levels of pay and so on for non-executives on NDPBs, following, as I said, Cabinet Office guidelines. Not all non-executive members seek, want or receive pay—but that is a subsidiary point. Basically, the Secretary of State sets the levels rather than the regulator because that is consistent across NDPBs.
Lord Oakeshott of Seagrove Bay: It may be a question of English, but I cannot see how anyone can object to saying that the regulator must pay such remunerations as the Secretary of State may determine. That seems to cover the point.
Lord Higgins: We are being rather pedantic over what is a traditional amendment. Almost every Bill I can remember has an amendment which seeks to leave
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out "may" and insert "must"; or, alternatively, leave out "must" and insert "may". However, in this case it clearly ought to be "may".
Baroness Hollis of Heigham: I agree.
Lord Higgins: Very well. After what the noble Baroness said, it seems even stranger that the Secretary of State will make provision and the regulator may pay or not as the case may be.
Baroness Hollis of Heigham: I shall have yet another go. We have provided that the regulator "may" make such payments as the Secretary of State may determine, rather than requiring the regulator to make such payments. The reason for that is that the regulator should have that slight degree of flexibility within the maxima set by the Secretary of State for NDPBs in accordance with Cabinet Office guidelines.
The Secretary of State will determine a maximum salary level for panels, but the regulator may agree with some or all members of a panel that they should work, for example, on an expenses-only basis and not receive a salary. This is similar to the way in which some noble Lords have been known not to claim their full entitlement to allowances.
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