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Lord Higgins: I am obviously somewhat surprised by the point made by the noble Baroness. Is she saying that these three clauses were introduced at a late stage of the Bill as a result of representations made by the Opposition?
Baroness Hollis of Heigham: I am informed that these three clauses were introduced on Report by the Government in response to pressure raised by the Opposition in Committee. That is my understanding. I apologise to the Committee if I have misrepresented the matter.
Lord Higgins: All I can say to that is that the draftsman has worked rapidly on this when he seems remarkably slow on some other things.
I still have concerns about the matter, on the grounds of cost among other things. Apparently, we shall now have the PPF board employing people, who are no doubt expert in medical matters, to review the pensions of everyone who took out an ill-health pension in the previous three years whenever a scheme enters into the assessment period. I find the matter very odd. I know not what views my colleagues in another place may have had—although I obviously should. None the less, the whole procedure seems extraordinarily odd.
Baroness Hollis of Heigham: Perhaps I may ask the noble Lord a question. If the PPF was up and running, such powers did not exist and it became clear years down the line—in 2007 or 2008—that an artificial manipulation was going on, and if there was an exposé in the press, the noble Lord might well ask, "Why did we not put a backstop into the Bill?" But that is what we are doing.
Lord Higgins: On the overall position of the fund, it seems unlikely that that is material. Anyway, let us leave the matter there. I am not happy about it.
Lord Oakeshott of Seagrove Bay: My instinct is that this could be a sledgehammer to crack a nut. We do not know, and it is very difficult to know. However, I am rather sympathetic to the suggestion made by the noble Lord, Lord Higgins, that the problem is probably not widespread. I must say that I also am very concerned. The Minister clearly said what the minimum period for assessment will be. It sounded to me as though it might be years and years. I worry that so many companies and pension schemes are going to be in a position of uncertainty and indeed how the PPF will work. Practically, the timescale fills me with foreboding.
Clause 132, as amended, agreed to.
Clause 133 [Effect of a review]:
Baroness Hollis of Heigham moved Amendment No. 202A:
On Question, amendment agreed to.
7 Sept 2004 : Column GC166
Clause 133, as amended, agreed to.
Clause 134 [Sections 132 and 133: interpretation]:
Baroness Hollis of Heigham moved Amendments Nos. 202B and 202C:
""pensionable service" is to be construed in accordance with Schedule 7;"
Page 93, leave out line 5.
On Question, amendments agreed to.
Clause 134, as amended, agreed to.
Clause 135 [Board's obligation to obtain valuation of assets and protected liabilities]:
Baroness Hollis of Heigham moved Amendment No. 203:
(i) a person with prescribed qualifications or experience, or
(ii) a person approved by the Secretary of State"
The noble Baroness said: I beg to move.
Lord Skelmersdale moved, as an amendment to Amendment No. 203, Amendment No. 203ZA:
The noble Lord said: I understand that government Amendment No. 203 is intended to be helpful. On page 93, line 34, it leaves out the words,
So far, so good. The hackles of any Member of a responsible Opposition would immediately rise when he saw the continuation of this particular formation—
That could happen to anybody. He or she need not necessarily have the prescribed qualifications or experience. I would readily understand and accept the words, "and approved by the Secretary of State", but as it stands I am, to say the least, unhappy. I await the Minister's explanation thereof. I beg to move.
Baroness Hollis of Heigham: We debated, and I had hoped that I had explained to the Committee, exactly the same issue in relation to Clause 103. We have already gone over this. The noble Lord may not have been present at that debate, and I fully accept that the Bill is complicated.
The noble Lord is absolutely right that in most cases an actuary will fall under the "prescribed qualifications or experience" category. That will include members of the Faculty of Actuaries and the Institute of Actuaries. The faculty and institute have signed mutual recognition agreements with several actuarial organisations throughout the world. However, where there is no mutual recognition agreement between the Faculty of Actuaries, the Institute of Actuaries and bodies in other countries, a person may apply to the Secretary of State for approval to undertake actuarial work.
7 Sept 2004 : Column GC167
Although we expect the Secretary of State to approve very few individuals in this manner, the provision is necessary to ensure appropriately competent individuals are not inadvertently excluded.
As I have mentioned, it is intended that the regulations will cover the vast majority of actuaries, and that approval by the Secretary of State would be sought only in exceptional circumstances. We intend to prescribe that an actuary must be a member of either the Faculty of Actuaries or the Institute of Actuaries, although we hope to be able to consult with the faculty and the institute in the near future on the exact wording of the regulations.
The procedure is absolutely standard. It follows the Occupational Pension Schemes (Scheme Administration) Regulations 1996, which allow schemes to appoint actuaries who have suitable qualifications from abroad but who are not currently a fellow of either the faculty or the institute or do not have reciprocal arrangements.
We will fully consult with the profession. That has been the standard practice in previous pension Bills and we have of course debated the issue earlier. With that explanation, I hope that the noble Lord's hackles will be smoothed down again.
Lord Skelmersdale: They have descended somewhat. I take the point that if unnecessary and inappropriate intentions are revealed by the regulations prescribing such things, we can have another go at the issue. So, for the moment I am happy to let the matter rest. However, the noble Baroness talked about Clause 103, which is a paving clause for Schedule 5.
Baroness Hollis of Heigham: I have the amendment numbers that we referred to on the matter. They are government Amendments Nos. 183, 203, 212, 213, 263 and 311. I can assure the noble Lord that we had this debate. I remember saying exactly this because similar alarms were quite properly addressed at the time. I believe that I was able to assure the Committee that the power recognised qualifications where there was no reciprocal agreement; that we would do it in consultation with the Faculty of Actuaries and Institute of Actuaries; and that, for example, we were following conventional practice already established under the Pensions Act 1995.
Lord Skelmersdale: I can assure the noble Baroness that I was not disbelieving her. I must have misheard her. I thought she said that the debates were under Clause 103. Clause 103 is a non-clause because it is a paving clause for Schedule 5. I do not think that there is any point in pursuing this.
Baroness Hollis of Heigham: I would just quote from the noble Lord, Lord Higgins. On Amendment No. 183 to page 260, line 18, he said:
"I am not clear why the provision was not in the Bill originally. What the noble Baroness says seems eminently reasonable, but we will need to think about it and consult outside, as actuarial bodies may have a view on the matter".—[Official Report, 15/7/04; col. 343.]
So it is entirely appropriate. As I say, I had hoped that I persuaded the noble Lord, Lord Higgins, and I hope that I have now persuaded the noble Lord, Lord Skelmersdale.
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