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Lord Craig of Radley: My Lords, I thank all noble Lords who supported or spoke to Amendment No. 7. I suppose a nyet on my amendment has been balanced by a da for Amendment No. 14, and one da a day is better than nothing. However, I am left more than a little confused. Once again, we have had assertions that costs will be very significant, without any indication of cost. I do not find that acceptable. I hope that, when we return to the matter at Third Reading, it will not simply be said again that costs are very significant, as it is difficult to make any assessment of the real position when faced with that assertion.

I was interested when the Minister said that, for some of the issues on widows, primary legislation would not be required to help them, and that help could be given through secondary legislation. I shall read carefully what he said; I am not quite sure that I followed him clearly.

I am more than a little confused still about the £500 million. We have Sir Humphrey-speak here, dealing with internal bookkeeping between the Treasury and the Ministry of Defence, which does not seem to speak very highly for joined-up government. Again, I should like to read what the Minister said on that. I am delighted about Amendment No. 14, but I beg leave to withdraw Amendment No. 7.

Amendment, by leave, withdrawn.

Lord Hodgson of Astley Abbotts moved Amendment No. 8:

The Secretary of State shall ensure that the pension and compensation schemes for armed and reserve forces comply with the relevant provisions of codes of practice published by the Pensions Regulator."

The noble Lord said: My Lords, for those noble Lords who have not attended the Committee on the Pensions Bill or did not attend the Committee on this Bill, I should say that the Pensions Bill is a massive piece of work in two volumes. It establishes a Pensions Regulator who has four clear objectives; namely, to protect the benefits of occupational schemes, to protect the benefits of personal pension schemes, to reduce the risks of situations where payouts might
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have come from the Pension Protection Fund, and—last but by no means least—to promote an improved understanding of the good administration of work-based pension schemes.

Those functions have important relevance so far as the Armed Forces are concerned, although obviously not the third of them—the risk of a payout from the Pension Protection Fund—as the Armed Forces pension scheme is a government-backed scheme. The Pensions Bill is a framework Bill being discussed at length in the Moses Room in Grand Committee, and we await large chunks of guidance notes and regulations to fill in the gaps. They will have an important read-across to this Bill for the Armed Forces.

When I introduced a similar amendment in Grand Committee, the Minister rightly chided me by saying that not all the regulations and guidance notes produced by the Pensions Regulator would apply to the Armed Forces. In that sense, the new clause that I had tabled then was deficient. I have now retabled it to insert the words, "the relevant provisions", so that it applies only so far as matters that are of importance and relevance to the Armed Forces.

I do not want to weary the House with the very special position of the Armed Forces; we have tramped that ground a good many times. The problem is not simply the danger or the conditions of service, which may require servicemen to be away from their families. It is not simply the very different career structure, whereby people tend to retire much earlier than from civilian roles. It is not even that there are three very different services carrying out three very different roles. It is, as I think that the noble Baroness, Lady Dean, said at one of our meetings, that they are broken up into small groups of people who are spread far and wide—to the four corners of the globe, a phrase which the noble Lord, Lord Morris, used earlier this afternoon. So it is critical, given the nature and structure of the careers of members of the Armed Forces, that we ensure that pension practice for the Armed Forces will be of the highest standard and therefore complies with the standards that the Government think should be applied in the private sector.

The importance of the amendment can be tested under three yardsticks. First, we had an important discussion on Amendment No. 2, tabled by my noble friend Lord Astor of Hever, which the Government rejected, about the need for an affirmative resolution for major changes to pension funds. They said that they did not want that written on the face of the Bill but that they would simply consult.

The second matter is that there are several important legacy issues in place, particularly regarding the pensions trough. If the consequences of the actions being taken had previously been properly explained, the bitterness and damage might have been avoided or at least minimised. I have received a letter from someone affected by the pensions trough which alleges that there is evidence of a deliberate attempt to keep the consequences hidden. That is somewhat parallel
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with the current pension mis-selling scandal and the penalties now suffered by Equitable Life policy holders. What legacy issues are we creating today and what requirement is there to spell out the full implications of what is being proposed?

The third yardstick is the government Front Bench's repeated assertions that we should have no concerns about those omissions. The noble Baroness, Lady Crawley said:

—that is, the Pensions Regulator's—

She repeated that in remarks earlier this afternoon.

Along with other noble Lords, I had a most helpful letter from the noble Lord, Lord Bach, dated 4 July in which he said:

I do not doubt the sincerity or integrity of the two Ministers, but Acts of Parliament last a long time and Ministers come and go. Governments also come and go. I see no reason why there should be any risk in making explicit the requirement for compliance in the Pensions Regulator's relevant provisions. The Government simply cannot legally impose a series of regulations on the private sector while not accepting formally and legally a similar provision for public sector pensions. I beg to move.

Lord Astor of Hever: My Lords, I support the amendment. My noble friend Lord Hodgson has argued his case comprehensively. Essentially it is an issue of best practice. If we are to have a new Pensions Regulator under the Pensions Bill to ensure minimum standards and requirements for occupational pensions in the private sector, why should we not put a duty on the Secretary of State to ensure that the new Armed Forces Pension Scheme must also comply? The Minister may assure us that there is no need to enforce a read-across from the private sector to the Armed Forces Pension Scheme because both will be working to the same best practice model. But that has not been the case in the past. Indeed, the Armed Forces Pension Scheme has fallen short of best practice elsewhere in the pensions industry. If the Bill were to state explicitly that there will be compliance with the new Pensions Regulator it would set many minds at rest.

Lord Redesdale: My Lords, I support the amendment. It was useful that the noble Lord, Lord Hodgson, was able to sit through the proceedings on both this Bill and the Pensions Bill, with its large amount of paperwork. It is also worth noting that best practice should spread across all sectors, public and private, because we only have to look back a couple of years to realise that Crown immunity—once one of the cornerstones that allowed death in service not to be
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covered by certain other aspects, which led to abuse—had to be abolished because it was seen as inequitable in today's society. The amendment contains much sense.

Baroness Crawley: My Lords, I thank noble Lords for their interventions, and the noble Lord, Lord Hodgson of Astley Abbotts, has argued a characteristically robust case. He is amazingly cheerful, having sat through this Bill and the Pensions Bill. However, I have to tell him that I shall continue to resist his amendment.

The new Pensions Regulator will not be established until April 2005, subject to the passage of the necessary primary legislation. The regulator will issue codes of practice, some of which will be mandatory, to help pension fund trustees and other professionals understand how to comply with pensions legislation. I have noted and listened carefully to the noble Lord in his experienced observations regarding those who have fallen victim to certain pension regimes over the years and those who are bitter as a result of it. However, where the codes impact on the Armed Forces Pension Scheme, new and current, I can assure the House that the MoD will comply with their requirements. I see, still, no need to write such a requirement into primary legislation.

The various codes will provide pension schemes with the regulator's interpretation of pension law, thus assisting in improving compliance and encouraging best practice, as the noble Lord has said. Codes of practice enable legislation to be less prescriptive, while at the same time providing guidance and certainty for scheme professionals. This means that the regulatory approach is more flexible and scheme professionals will have more room to exercise their professional judgment in some areas of scheme administration. This approach responds directly to recommendations made by Alan Pickering in the Pickering report. I hope that the noble Lord, Lord Hodgson, will feel reassured enough to withdraw the amendment.

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