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Lord Higgins: My Lords, I listened with great interest to what the noble Baroness said, but I am somewhat puzzled by the initial part of her remarks. They seemed to be based on the assumption that the Government won the last vote, and that is not so.

Baroness Hollis of Heigham: My Lords, there has been a misunderstanding, which is why I was talking about chasms between two noble Lords opposite on what the last vote did. Instead of saying that the initial period would last about a year, which was the Government's intent, the amendment puts a date of 31 March 2006 on it. So when the Bill receives Royal Assent and comes into force, we hope, from the beginning of April 2005, there will be one year for a flat-rate scheme for everybody. That was what the last vote did.

Lord Higgins: My Lords, that was the result of the vote on Amendment No. 208, but we have voted on
 
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another amendment since then. That said that the levy should be a flat-rate levy and have a risk-based element as well. In a sense, this debate is a consequence of the vote we have just had; namely, that there should be both a scheme-based levy and a risk-based levy, and that the proportion between the two is such that the risk-based element should be at least 80 per cent. This is what we are saying.

Baroness Hollis of Heigham: My Lords, that is not what the noble Lord, Lord Oakeshott, said. He talked about not wanting a flat-rate levy, about it being all or nothing, so to speak—you cannot have some companies included and some not—and about wanting the risk-based levy virtually immediately. That was what I was arguing against.

Lord Oakeshott of Seagrove Bay: My Lords, I said that after a year it should be 80 per cent risk based. That is the key.

Baroness Hollis of Heigham: Forgive me, my Lords, I know this is not Committee, but we are not arguing about the year. The difference between us is whether, after that year has elapsed, companies go immediately on to the risk-based levy or whether they do so as they see fit.

Lord Higgins: Again, my Lords, that is what we debated on the previous amendment, which was carried. We are effectively debating a consequential proposal; namely, if we go after the initial period to a system, one component of which is scheme-based and the other risk-based, then the proportion between the two is such that the risk-based element should not be less than 80 per cent. That is what this amendment is about.

The other thing that puzzled me in the noble Baroness's remarks was that she quoted the NAPF as being against Amendment No. 217A, which we believe to be superior to Amendment No. 212. However, my understanding is that the NAPF is entirely in favour of what is suggested in Amendment No. 217A.

Lord Oakeshott of Seagrove Bay: Absolutely, my Lords.

Lord Higgins: My Lords, that view is confirmed by the noble Lord, Lord Oakeshott.

We listened with interest to what the noble Baroness said, but we are not persuaded, for the reasons which I have just mentioned, and hope to take the opinion of the House.

Lord Lea of Crondall: My Lords, before the noble Lord sits down, I do not hear him respond to the point that this is a major responsibility of the board. However one does this, its responsibility is to make an assessment based on what I think my noble friend
 
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described as a zero sum game. I do not think that the noble Lord has answered that point about the board's responsibility.

Lord Higgins: My Lords, we are seeking to set out what seems to us a reasonable basis on which to set up the situation in the relationship between the Government and the board. That is what we have done. I beg to take the view of the House.

The Deputy Speaker (Lord Lyell): My Lords, the Question is that Amendment No. 212—

Lord Higgins: My Lords, I am sorry. I wish to withdraw the amendment which, as I indicated earlier I think is inferior to Amendment No. 217A, and to vote in due course on Amendment No. 217A.

The Deputy Speaker: My Lords, I am much obliged to the noble Lord.

Lord Higgins: My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 213 to 216 not moved.]

Clause 175 [Amounts to be raised by the pension protection levies]:

[Amendment No. 217 not moved.]

Lord Higgins moved Amendment No. 217A:


"AMOUNTS TO BE RAISED BY THE PENSION PROTECTION LEVIES
(1) Before determining the pension protection levies for any financial year after the initial period, the Board must estimate an amount which will reimburse as nearly as possible its total costs of administration and must determine the rate of scheme-based pension protection levy to raise that amount.
(2) The Board must also estimate the further amount to be raised by the risk-based pension protection levy it intends to impose.
(3) The Board must impose levies for a financial year in a form which it estimates will raise an amount not exceeding the levy ceiling for the financial year.
(4) The risk-based pension protection levy must amount to at least 80% of the total amounts estimated to be raised by both levies.
(5) The Board must notify the Secretary of State of its estimates and the levies it intends to impose at least three months before the beginning of each financial year in which those levies are to be imposed.
(6) In order to vary these proposed levies, the Secretary of State must lay regulations before Parliament before the start of the relevant financial year.
(7) For the first financial year after the initial period, regulations may modify subsection (3) so as to provide that the reference to the levy ceiling for the financial year is to be read as a reference to such lower amount as is prescribed.
(8) For the second year after the initial period and for any subsequent financial year, the Board must impose pension protection levies in a form which it estimates will raise an amount
 
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which does not exceed by more than 25% the aggregate of the amounts estimated under subsections (1) and (2) in respect of the pension protection levies imposed for the previous financial year.
(9) The Secretary of State may by order substitute a different percentage for the percentage for the time being specified in subsection (8).
(10) Before making an order under subsection (9) the Secretary of State must consult such persons as he considers appropriate.
(11) Regulations under subsection (7), or an order under subsection (9), may be made only with the approval of the Treasury.
(12) In this section "risk-based pension protection levy" and "scheme-based pension protection levy" are to be construed in accordance with section 173."

The noble Lord said: My Lords, as I indicated a moment ago, I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 217A) shall be agreed to?

Their Lordships divided: Contents, 136; Not-Contents, 106.


Division No. 4


CONTENTS

Addington, L.
Allenby of Megiddo, V.
Alliance, L.
Ampthill, L.
Anelay of St Johns, B.
Attlee, E.
Avebury, L.
Barker, B.
Beaumont of Whitley, L.
Bonham-Carter of Yarnbury, B.
Bradshaw, L.
Bridgeman, V.
Brookeborough, V.
Brougham and Vaux, L.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Carlisle of Bucklow, L.
Chadlington, L.
Clement-Jones, L.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Craigavon, V.
Dean of Harptree, L.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Dykes, L.
Elliott of Morpeth, L.
Elton, L.
Erroll, E.
Ezra, L.
Falkland, V.
Falkner of Margravine, B.
Feldman, L.
Finlay of Llandaff, B.
Fookes, B.
Fowler, L.
Garden, L.
Gardner of Parkes, B.
Garel-Jones, L.
Geddes, L.
Goodhart, L.
Greaves, L.
Hamwee, B.
Hanham, B.
Harris of Richmond, B.
Hayhoe, L.
Higgins, L.
Hodgson of Astley Abbotts, L.
Holme of Cheltenham, L.
Hooper, B.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Hunt of Wirral, L.
Jacobs, L.
Jenkin of Roding, L.
Knight of Collingtree, B.
Linklater of Butterstone, B.
Liverpool, E.
Livsey of Talgarth, L.
Lucas, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
McNally, L.
Maddock, B.
Mar and Kellie, E.
Marlesford, L.
Marsh, L.
Mayhew of Twysden, L.
Methuen, L.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Monro of Langholm, L.
Monson, L.
Montrose, D.
Mowbray and Stourton, L.
Moynihan, L.
Murton of Lindisfarne, L.
Naseby, L.
Neuberger, B.
Newby, L.
Newton of Braintree, L.
Noakes, B.
Northover, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
Onslow, E.
Park of Monmouth, B.
Perry of Southwark, B.
Phillips of Sudbury, L.
Pilkington of Oxenford, L.
Platt of Writtle, B.
Plummer of St. Marylebone, L.
Razzall, L.
Redesdale, L.
Rees, L.
Rennard, L.
Renton, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Roper, L. [Teller]
Sandberg, L.
Sanderson of Bowden, L.
Scott of Needham Market, B.
Seccombe, B.
Sharman, L.
Sharp of Guildford, B.
Shaw of Northstead, L.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Steel of Aikwood, L.
Taverne, L.
Tebbit, L.
Thomas of Gresford, L.
Thomas of Swynnerton, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Tope, L.
Trumpington, B.
Vallance of Tummel, L.
Waddington, L.
Wakeham, L.
Wallace of Saltaire, L.
Walmsley, B.
Walpole, L.
Williams of Crosby, B.
Williamson of Horton, L.
Windlesham, L.

NOT-CONTENTS

Acton, L.
Ahmed, L.
Alli, L.
Amos, B. (Lord President of the Council)
Archer of Sandwell, L.
Ashton of Upholland, B.
Bassam of Brighton, L.
Bernstein of Craigweil, L.
Bhattacharyya, L.
Borrie, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Carter, L.
Christopher, L.
Clarke of Hampstead, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Davies of Oldham, L. [Teller]
Drayson, L.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L. (Lord Chancellor)
Farrington of Ribbleton, B.
Fitt, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Giddens, L.
Goldsmith, L.
Gould of Potternewton, B.
Graham of Edmonton, L.
Greengross, B.
Griffiths of Burry Port, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayman, B.
Henig, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Jay of Paddington, B.
Jordan, L.
Kirkhill, L.
Lea of Crondall, L.
Leitch, L.
Lipsey, L.
Lockwood, B.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Massey of Darwen, B.
Maxton, L.
Merlyn-Rees, L.
Mishcon, L.
Mitchell, L.
Morgan of Drefelin, B.
Morris of Aberavon, L.
Morris of Manchester, L.
Pendry, L.
Pitkeathley, B.
Ponsonby of Shulbrede, L.
Rea, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Royall of Blaisdon, B.
Sewel, L.
Sheldon, L.
Simon, V.
Snape, L.
Stone of Blackheath, L.
Strabolgi, L.
Taylor of Blackburn, L.
Thornton, B.
Tomlinson, L.
Triesman, L.
Truscott, L.
Tunnicliffe, L.
Turner of Camden, B.
Uddin, B.
Wall of New Barnet, B.
Warner, L.
Weatherill, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Wilson of Dinton, L.
Winston, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.


Resolved in the affirmative, and amendment agreed to accordingly.


 
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Clause 177 [Valuations to determine scheme underfunding]:


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