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Lord Higgins: My Lords, is it still 50 per cent?

Baroness Hollis of Heigham: My Lords, we are still holding to 50 per cent. But I made it very clear that we will go to that over time and following consultation. I am not saying that this will be the case, but it could be that it will be banded by size of company. There could be a whole range of ways in which it is introduced. We are not trying to use a shotgun approach to small companies that are not equipped yet to do that. But over time we will move in that direction and expect to see 50 per cent of member-nominated trustees—leaving aside the point about an independent trustee possibly.

That will enrich the quality of the board and ensure that employees have on their radar screens, if they do not already, the significance and importance of pension provision and will own the problems, the risks, the challenges and the solutions that go with being trustees of that board. So I hope that Members will accept the amendment.

Baroness Wall of New Barnet: My Lords, may I share—

Noble Lords: Order!

Baroness Hollis of Heigham: My Lords, I apologise to my noble friend but I am afraid that when I wind up on a government amendment on Report, that is supposed to be the end of the matter. My noble friend can always say, "Before my noble friend sits down", and offer a brief intervention if she so wishes.

Lord Higgins: My Lords, before the noble Baroness sits down, I should like to be clear about the chairman's casting vote.

Baroness Hollis of Heigham: My Lords, that will be for the rules of the scheme.

Baroness Wall of New Barnet: My Lords, before my noble friend sits down, may I elaborate on the experience that I have already shared with your Lordships?

Baroness Hollis of Heigham: My Lords, my noble friend must ask a question, starting with, for example, "am I aware".

Baroness Wall of New Barnet: My Lords, is my noble friend aware that experience in industry is such, as the noble Lord said, that the management of the board of trustees wants employee representatives to be trained and to understand what they have to do? In a way, the proposal formalises what already happens. For example, a trade union pension expert may, by invitation from the management, advise members on issues. The reservation being felt may be unjustified when the intention of the provision is to ensure that those who participate can do so in a concentrated way.
 
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Baroness Hollis of Heigham: My Lords, I thank my noble friend for that intervention. As a result, I hope that your Lordships will accept the government amendments.

On Question, Whether the said amendment (No. 237) shall be agreed to?

Their Lordships divided: Contents, 102; Not-Contents, 96.

Division No. 5

CONTENTS
Acton, L.
Ahmed, L.
Allenby of Megiddo, V.
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.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Carter, L.
Chelmsford, Bp.
Christopher, L.
Clarke of Hampstead, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
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.
Gilbert, L.
Goldsmith, L.
Gould of Potternewton, 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.
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.
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.
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.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Winston, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.

NOT-CONTENTS
Addington, L.
Alliance, L.
Anelay of St Johns, B.
Attlee, E.
Avebury, L.
Baker of Dorking, L.
Barker, B. [Teller]
Blatch, B.
Bonham-Carter of Yarnbury, B.
Bradshaw, L.
Bridgeman, V.
Brookeborough, V.
Brougham and Vaux, L.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Chadlington, L.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Dean of Harptree, L.
Dholakia, L.
Dixon-Smith, L.
Dundee, E.
Dykes, L.
Elton, L.
Falkland, V.
Falkner of Margravine, B.
Finlay of Llandaff, B.
Fookes, B.
Fowler, L.
Garden, L.
Garel-Jones, L.
Geddes, L.
Greaves, L.
Hamwee, B.
Hanham, B.
Harris of Richmond, B.
Higgins, L.
Hodgson of Astley Abbotts, L.
Holme of Cheltenham, L.
Hooper, B.
Howe, E.
Howe of Aberavon, L.
Jacobs, L.
Jenkin of Roding, L.
Knight of Collingtree, B.
Liverpool, E.
Lucas, L.
Luke, L.
McColl of Dulwich, L.
MacGregor of Pulham Market, L.
McNally, L.
Maddock, B.
Marlesford, L.
Marsh, L.
Mayhew of Twysden, L.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Montrose, D.
Naseby, L.
Neuberger, B.
Newton of Braintree, L.
Noakes, B.
Northover, B.
Norton of Louth, L.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
Park of Monmouth, B.
Pearson of Rannoch, L.
Platt of Writtle, B.
Razzall, L.
Redesdale, L.
Rees, L.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Roper, L.
Sandberg, L.
Scott of Needham Market, B.
Seccombe, B.
Sharman, L.
Sharp of Guildford, B.
Skelmersdale, L.
Smith of Clifton, L.
Steel of Aikwood, L.
Taverne, L.
Taylor of Warwick, L.
Tebbit, L.
Thomas of Gresford, L.
Thomas of Swynnerton, L.
Thomas of Walliswood, B.
Tope, L.
Wakeham, L.
Wallace of Saltaire, L.
Walmsley, B.
Williams of Crosby, B.
Williamson of Horton, L.


Resolved in the affirmative, and amendment agreed to accordingly.

 
4 Nov 2004 : Column 522
 

Baroness Hollis of Heigham moved Amendment No. 238:

Page 178, line 17, after "240" insert "(including any of the provisions mentioned in subsection (A1))"

On Question, amendment agreed to.

Clause 255 [Conditions of pension protection]:

Lord Skelmersdale moved Amendment No. 239:

Page 187, line 22, leave out from "if" to end of line 23 and insert "the benefits are provided under a money-purchase scheme"

The noble Lord said: My Lords, we now move on to what I hope are less controversial matters. Clause 255 covers the conditions for pension protection when an employee transfers from one firm to another within the same group or, indeed, the company is taken over and the employee transfers to the new company under
 
4 Nov 2004 : Column 523
 
what is probably its own scheme but, possibly, maintaining the old scheme depending on the conditions of the takeover. This amendment seeks to ensure that the condition that the transferor contributes to the scheme is restricted to money purchase schemes.

As currently drafted, there are two conditions in Clause 255(2). The first is that the person is an active member—a person in pensionable service. It would apply to a defined benefit scheme, a money purchase scheme or a hybrid scheme. The second condition is that where any of the benefits under the scheme are money-purchase benefits, the employer must have been required to pay contributions in respect of the employee or has done so. In a situation where the scheme is a defined benefits one, but the member pays voluntary contributions applied on a money purchase basis, I believe that the employer is not required to pay contributions in respect of that member as an individual. An employer is only required to contribute to the funding of the scheme as a whole.

In my view there is a danger that defined benefit schemes are thereby excluded from pension protection. I hope the noble Baroness will tell me this is incorrect. However, on the basis that it is correct, for it to be otherwise, surely it would be logical that the phrase "in respect of the employee" would have to cover an obligation to contribute to the common fund. I would very much like this clarified. I beg to move.

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