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Lord Higgins: I am grateful for that response. Is it the case, however, that the regulator's exercise of the powers is not within the scope of the Pensions Regulator Tribunal, and so on, and not subject to any judicial oversight as to fact or law?
Baroness Hollis of Heigham: No, it certainly comes within the purview of the oversight of the pension tribunal.
Lord Higgins: We will obviously need to do further homework and, if need be, come back at Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 87 shall stand part of the Bill?
Viscount Trenchard: I have a point regarding Clause 87, which I found confusing. Subsection (1) states:
"The Regulator must determine the procedure that it proposes to follow in relation to the exercise of its regulatory functions".
That includes, as the Minister pointed out, in subsection (2)(c), "the reserved regulatory functions" reserved to the Determinations Panel. But subsection (3) states:
in respect of the exercise of those powers.
The clause seems to state that the reserved regulatory functions are determined by both the regulator and, separately, the Determinations Panel. I am still confused about whether the Determinations Panel is or is not a part of the regulator. Clause 87 seems to state that they will both draw up their own procedures.
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Baroness Hollis of Heigham: The noble Lord is right. The Determinations Panel is a subset of the regulator. That is why, under the functions listed, it is part of what the regulator does. But certain functions that the regulator does are reserved to the Determinations Panel.
As the noble Viscount will know, there is no overlapping membership whatever. That is not only to meet ECHR requirements but also to overcome a difficulty that OPRA has experienced where there is a problem about appearing to be both judge and jury on one's own issue. It is because the Determinations Panel is part of the regulator. None the less, it will determine its own procedures within its own area of activities.
Viscount Trenchard: I thank the noble Baroness for her reply. But I am still unclear, in respect of the reserved regulatory functions, whether it is the regulator or the Determinations Panel which will determine the procedures to be followed.
Baroness Hollis of Heigham: The Determinations Panel is part of the regulator. I am obviously not making myself clear. The Determinations Panel will determine its procedures. The point is that because the Determinations Panel is a subset of the regulator, Clause 87(2) gives the comprehensive listing; subsection (3) gives a further specification or a development of the points made in subsection (2). I hope that that is helpful.
Viscount Trenchard: In respect of this clause, that is helpful, but I shall have to refer back to our previous discussions about the difference between the regulator and the Determinations Panel. Would I be right in understanding that where it says "the regulator", one can understand the regulator including, if appropriate, the Determinations Panel?
Baroness Hollis of Heigham: The Determinations Panel is part of the regulator. Clause 87(3) specifies those functions that only the Determinations Panel may do. Equally, it may be that the regulator, minus the Determinations Panel, may send responsibilities across to the Determinations Panel—a one way delegation—in which case, again, the Determinations Panel would be responsible.
Clause 88 [Publication of procedure in relation to regulatory functions]:
On Question, Whether Clause 88 shall stand part of the Bill?
Lord Higgins: Again, this is a very detailed point, as indeed are all points on this section. The drafting gives rise to some confusion. I find somewhat puzzling that suddenly, under Clause 88(5),
"The Regulator must, without delay, give the Secretary of State a copy of any statement which it issues".
Do I gather that the regulator will not have consulted the Secretary of State previously and that the statement will suddenly land on the Secretary of State's desk having all been decided? If the Secretary
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of State does not like it, what can he do about it? I shall leave to one side the fact that he has to give it to the Secretary of State rather than charge him.
Baroness Hollis of Heigham: The Secretary of State will certainly not be determining what the regulator will do. The regulator will not be consulting. The Secretary of State will receive the copy from the regulator. The regulator is at arm's length from the Secretary of State, which I am sure is what we would wish.
Lord Higgins: Fine. The Secretary of State has no role in the matter at all. So why is he sent a copy?
Baroness Hollis of Heigham: It is partly a courtesy and partly—I am trying to think of an example. There might be some annual report or the sort of information that the Secretary of State may wish to know, which may influence policy development within the department and so on. It is a courtesy. But the point is that we are seeking to protect the integrity and independence of the regulator at arm's length, so that he does not have to have the approval of the Secretary of State to exercise his functions appropriately.
Lord Higgins: I do find it odd.
Clause 91 [Special procedure: applicable cases]:
Baroness Hollis of Heigham moved Amendment No. 171:
"( ) the power to make or extend a restraining order under section (Pension liberation: restraining orders);"
The noble Baroness said: This is a further consequential amendment resulting from the introduction of the new clauses to combat pensions liberation. Whenever we use the words "pensions liberation" it is in heavy inverted commas. Due to an administrative oversight the amendment was not moved in Committee on 8 July with other government amendments. It should have been and I failed to do so. So I would hope that I could move it formally. The matter is consequential and I am happy to explain at greater length, but I do not wish to take up the Committee's time unnecessarily. I beg to move.
On Question, amendment agreed to.
Lord Higgins moved Amendment No. 172:
"SECTION 35 CLEARANCE
(1) If a person is in doubt whether an act or deliberate failure to act within the meaning of section 53(4) may be such that the Regulator would consider to constitute an act or deliberate failure to act in relation to which it would be appropriate to issue a contribution notice under section 35, that person may seek a ruling from the Regulator in the prescribed manner.
(2) The Regulator shall issue a ruling within the prescribed period.
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(3) Any ruling issued by the Regulator under subsection (2) shall be binding and shall be admissible in evidence in any legal proceedings and if relevant must be taken into account in determining any question arising in the proceedings.
(4) The Secretary of State shall make regulations under this section relating to—
(a) the manner of seeking a ruling from the Regulator;
(b) the information to be provided to the Regulator;
(c) the requirement on the Regulator to keep all information provided confidential;
(d) periods within which the Regulator must respond to any request for a ruling, depending on its urgency;
(e) the manner of the Regulator's reply; and
(f) such other matters as the Secretary of State considers relevant."
The noble Lord said: This is concerned with clearance. We are suggesting that:
"If a person is in doubt whether an act or deliberate failure to act within the meaning of Section 53(4) may be such that the Regulator would consider to constitute and act or deliberate failure to act in relation to"
"it would be appropriate to issue a contribution notice under section 35, that person may seek a ruling from the Regulator in the prescribed manner".
Then the regulator can issue a ruling. I shall not burden the Committee with the remainder of the amendment. The Government indicated at Second Reading that they would look favourably on an amendment to introduce a clearance procedure. There would seem to be a clear need for such a clearance procedure in addition to the code of practice that we have been considering. It is intended that the code of practice would give sufficient guidance to a person considering a transaction to take a view on the likelihood of the regulator issuing a notice. This would, it is hoped, suffice for many transactions and ought to take away some of the workload from the regulator. None the less, there may be grey areas in relation to which it is desirable for the regulator to reach a rapid decision. In those circumstances, it would seem appropriate to have a clearance procedure. I beg to move.
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