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Lord Higgins: It may be helpful if I first make some general remarks about the way in which the Government propose to take action with regard to the European pensions directive, covered by Clauses 275 to 281. As the noble Baroness has pointed out, we start with a series of government amendments.
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At the very beginning of our discussions in this House, the noble Baroness kindly provided a comprehensive statement about the problems associated with this area, and has again provided us with more extended speaking notes than she used today. That being so, I do not propose to go into it in enormous detail at this moment, but to ask whether arrangements could be made for those particularly involved with these matters, either those with multinational schemes or companies providing such services across European borders, could be issued with something approximating to the extremely helpful notes distributed to us, and perhaps also drawing on the remarks made by the noble Baroness today.

Back in the 1970s, I well remember that those in the pension and insurance industries would remark on what a fantastic opportunity the EC was because we were so competitive. Alas, I am afraid that it was noted in the information that the noble Baroness provided to us that the measure is really the first step in going ahead in this direction, so far as occupational schemes are concerned. In the mean time, the UK insurance industry has shrunk very considerably. At all events, we must certainly do everything that we can to take the opportunities presented to us. As I understand it, that is effectively what the clauses seek to do.

It is also clear, however, that agreement has still not been reached with regard to a number of definitional problems. Consequently, the Government have to resort to leaving scope to agree to whatever definitions are eventually agreed by statutory instrument. It is very sad that, in the course of the lengthy negotiations, so many issues are not covered. Even the definition of what is meant by a European employer is outstanding. One would have thought by now at least that that could have been agreed. It is very important that we get universal definitions so far as possible if confusion and perhaps subsequent litigation are not to take place.

Generally, the clauses distinguish between the regulator giving authorisation in a general sense and approval of a particular arrangement. However, Clause 276, I think, suggests that in between that there will be a process of accreditation. I am not clear how that takes place. Perhaps we could be told something more about that, at whatever the noble Baroness regards as the appropriate moment.

I mentioned earlier that the provisions are concerned with multinational companies and those providing services across borders. As a Unilever pensioner, I suppose that I ought to declare an interest—although not in a very large pension, I regret to say. None the less, it is one that is of some relevance to me. I imagine that there have been great consultations with all the major multinational companies on the matters.

There also seems to be some confusion about the definition of a home member state and a host member state. Although the clauses seek to give definitions of them, the actual terms seem wholly interchangeable. That is not very satisfactory but, given that
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negotiations have been going on, I imagine that they have at least been agreed as terms of art, so will provide a reasonable basis for discussing the matter.

Overall, we welcome the clauses. We hope that rapid progress can be made and that, as a result, as the noble Baroness said, there will be opportunities for those in this country who operate in the particular markets. It is not quite true to say that there is a European market; we are talking about something rather different from that, with individual companies or sponsors dealing with particular cases. None the less, the clauses are helpful and we do not have any particular points on them, given the extremely helpful notes and explanations that the noble Baroness has given us, to pursue. However, we will look carefully at the more elaborate notes that she has given us and, if necessary, return to matters on Report. My initial impression is that, so far as things go—they have still not gone as far as one would like—the arrangement is reasonable.

Lord Oakeshott of Seagrove Bay: We also have no argument with the broad thrust of the amendments and the clauses, which seem sensible. Will the noble Baroness simply reassure us that the Government have consulted widely the relevant organisations and pension funds in the area and share with us concerns that have been raised, if there are any? We are happy to work on the principle of reading the speaking notes. However, having flicked through them quickly, I am disappointed that we have not had the opportunity to hear her telling us, from page 27, about the "cantonnement" and what my excellent German research assistant, Oliver Hartwich, who although having two degrees has never heard the word, assures me should be called ein separater Abrechnungsverband. Apart from that, we have no comments.

Baroness Hollis of Heigham: Perhaps I should say to Hansard, "Good luck".

I am grateful to the Committee for its welcome for these clauses. I am grateful also that it understands why we cannot yet go into any further detail. We are dependent on bringing other countries into a common understanding and a common vocabulary in regard to what we are doing.

I shall be very happy, again, to ensure that these notes are circulated to all companies and organisations which have an interest. Our officials are working with them all the time. That is why we are getting the steer that we are. If any noble Lords have any concerns that any company or possible player is being overlooked, please let me know and I shall ensure that they are included. But certainly all the major companies of which I am aware—both companies which may have schemes, such as the oil companies, and possible players in the market place who are pension providers—have been actively involved, and we are grateful for that.

Finally, the noble Lord, Lord Higgins, asked what "accreditation" might mean. This is one of our words rather than a European word. It simply refers to the total process within which there are two steps:
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authorisation and approval. Accreditation simply encompasses the whole regime. With that, I hope very much that the Committee will accept the amendment.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 323:

On Question, amendment agreed to.

Clause 275, as amended, agreed to.

Clause 276 [General authorisation to accept contributions from European employers]:

Baroness Hollis of Heigham moved Amendments Nos. 324 and 325:

"(1A) On receipt of the application, the Regulator must—
(a) where the Regulator is satisfied that the applicant meets prescribed conditions, grant the authorisation, and
(b) in any other case, refuse the authorisation."
Page 210, line 8, leave out "grant or"

On Question, amendments agreed to.

Clause 276, as amended, agreed to.

Clause 277 agreed to.

Clause 278 [Notification of legal requirements of host member State outside United Kingdom]:

Baroness Hollis of Heigham moved Amendments Nos. 326 and 327:

"( ) Where—
(a) the trustees or managers of an occupational pension scheme are approved under section 277 in relation to a European employer, and
(b) in pursuance of Article 20(8) of the Directive the Regulator receives information ("the new information") from the competent authority of the host member State as to changes affecting any information previously forwarded under subsection (1),
the Regulator must as soon as reasonably practicable forward the new information to the trustees or managers."

On Question, amendments agreed to.

Clause 278, as amended, agreed to.

Clause 279 agreed to.

Baroness Hollis of Heigham moved Amendment No. 328:

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