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Baroness Hollis of Heigham: As it stands, the amendment would impose an obligation to consult in the instance of any reduction in contributions. Our phrasing is "significant" reductions, so the noble Baroness would agree that the Government's position is not unreasonable. But the thrust of her amendments is, as she says, to probe what we mean by "consultation".

The regulations, which will be drawn up in partnership with the CBI, the trade union movement and so on, will explain who must be consulted. The employers must, for example, consult a recognised trade union or a recognised I&C member from April 2005. The regulations will give the timescale for representations to be made, during which the employer must "consider". If there is no trade union or I&C member, those recommendations must go directly to the employees. The regulations will be based on consultation but they will lay down a proper process and an appropriate timescale for sending it out, receiving back representations and considering those. So this would not be merely a perfunctory activity in which the consultation has had no capacity to change the outcome of any decision that the employer might make.

I do not know whether that gives my noble friend sufficient assurances. If she wishes to push me further, I would invite her to do so, because I do not know whether I have given her enough comfort. But I believe that the regulations will address the issues she has raised to ensure that the consultation is meaningful. It does not mean that the consultation itself produces a veto on what the employer has done. I was at pains to establish that that would not be the case.

Baroness Dean of Thornton-le-Fylde: This is the difficulty that we always have when we have a Bill that
 
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will probably be on the statute book by the time that we finish the regulations. At the moment, if there is one area where there is much suspicion, it is pensions. I hear what the Minister says, and we can always return to this on Report if we wish. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 249 agreed to.

Clause 250 [Further provisions about regulations relating to consultation]:

[Amendments Nos. 308A to 310 not moved.]

On Question, Whether Clause 250 shall stand part of the Bill?

Baroness Barker: I apologise for not having been present in the Committee for most of this afternoon. I had good reasons for being elsewhere. However, since I have been here I have listened extremely closely to the exchanges, particularly on the previous few groups of amendments. I refer to a situation that I know only too well, working for an employer who has just consulted on closure of a DB scheme. Therefore, I took to heart much of what the Minister said about consultation and the requirement for it.

We on these Benches are reaching the view that pensions form a substantial element of overall remuneration packages and therefore it is increasingly right to treat pensions as one would treat other forms of remuneration. I was most interested to hear all that the noble Baroness said. However, Clause 250(2)(g) appears to enable the regulator to waive or relax all the regulations relating to consultation, which appears to constitute a power to drive a coach and horses through all the good practice that the noble Baroness discussed. Perhaps there is a good reason for the measure. I should be delighted to know what that is. If there is no good reason for it, I question why it is there. Why would the regulator wish to have the power to tell people to override good practice?

Baroness Hollis of Heigham: I have obtained advice on under what circumstances Clause 250(2)(g) might come into play. One example is where a company ceases trading when winding-up is taking place. Any requirements for consultation imposed by the regulations would obviously be waived under those circumstances. It is an obvious point but I rather agree with the noble Baroness that it could be expressed differently.

Baroness Barker: I rather wish that it were. As the noble Baroness knows, I am at the moment fascinated by insolvency. I quite understand that that is exactly what happens in those circumstances. If that is what the measure is intended to provide, it should say so rather than constituting such an open provision.

Baroness Hollis of Heigham: The regulations will spell it all out. As I say, those regulations will be based on consultation with all the relevant parties. The officials have heard this discussion and they are
 
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drawing up the regulations. I shall do my best to encourage them to ensure that there is as much transparency as possible.

Clause 250 agreed to.

Clause 251 [Modification of subsisting rights]:

[Amendment No. 310A had been withdrawn from the Marshalled List.]

Baroness Hollis of Heigham moved Amendment No. 310AA:

Page 173, line 17, leave out "other entitlement to benefits" and insert "entitlement to the present payment of a pension or other benefit"

The noble Baroness said: The amendments in this group are extremely technical. I shall speak to them briefly but if any of your Lordships want fuller information I shall be happy to circulate additional information.

This group of amendments is needed in order to bring clarity to the provisions in Clause 251. Amendments Nos. 310AA—it sounds like a shoe size—and 310AB clarify the meaning of the term "subsisting rights" at New Section 67A.

Amendments Nos. 310D, 310E and 310F clarify the provisions in new Section 67B(5). New Section 67B sets out the requirements that must be satisfied when a modification is to be made with the consent of each of the affected members.

Amendment No. 312ZA amends the new Section 67E(2), which covers the action the trustees must have taken before they can agree or consent to a modification being made.

I hope that your Lordships will accept these amendments. I beg to move.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendments Nos. 310AB to 311:

Page 173, line 23, at end insert—

"( ) At any time when the pensionable service of a member of an occupational pension scheme is continuing, his subsisting rights are to be determined as if he had opted, immediately before that time, to terminate that service."
Page 173, line 25, leave out from "as" to end of line 36 and insert "overridden by a relevant legislative provision,
(b) the relevant legislative provisions, to the extent that they have effect in relation to the scheme and are not reflected in the rules of the scheme, and"
Page 173, line 41, at end insert—
"(7A) For the purposes of subsection (7)—
(a) "relevant legislative provision" means any provision contained in any of the following provisions—
(i) Schedule 5 to the Social Security Act 1989 (equal treatment for men and women);
(ii) Chapters 2 to 5 of Part 4 of the Pension Schemes Act 1993 (certain protection for early leavers) or regulations made under any of those Chapters;
 
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(iii) Part 4A of that Act (requirements relating to pension credit benefit) or regulations made under that Part;
(iv) section 110(1) of that Act (requirement as to resources for annual increase of guaranteed minimum pensions);
(v) this Part of this Act (occupational pensions) or subordinate legislation made or having effect as if made under this Part;
(vi) section 31 of the Welfare Reform and Pensions Act 1999 (pension debits: reduction of benefit);
(vii) any provision mentioned in section 292(2) of the Pensions Act 2004;
(b) a relevant legislative provision is to be taken to override any of the provisions of the scheme if, and only if, it does so by virtue of any of the following provisions—
(i) paragraph 3 of Schedule 5 to the Social Security Act 1989;
(ii) section 129(1) of the Pension Schemes Act 1993;
(iii) section 117(1) of this Act;
(iv) section 31(4) of the Welfare Reform and Pensions Act 1999;
(v) section 292(1) of the Pensions Act 2004."
Page 174, line 37, leave out from beginning to "if" in line 40 and insert—
"(5) If—
(a) the modification is not a protected modification, and
(b) before the modification is made the trustees notify an affected member in writing that—
(i) "
Page 174, line 43, leave out "(b)" and insert "(ii)"
Page 174, line 44, at end insert—
"the trustees are to be taken to have complied with subsection (4)(a)(iv) in respect of him."
Page 175, line 43, leave out "of a prescribed description" and insert "with prescribed qualifications or experience or who is approved by the Secretary of State"

On Question, amendments agreed to.

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