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Lord Skelmersdale: The Grand Committee—if that is what we are still calling it, somewhat wrongly—will be grateful to the Minister for the very clear way in which he has explained the order. I find it ironic that, the day after I congratulate the Minister on his
 
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appointment, the Merits of Statutory Instruments Committee publishes a demerit on what I believe is the first order that he has laid before a Grand Committee. That said, I have no doubt that the recipients of these payments will be extremely grateful to the Government for anything that can be done to alleviate the effects of the huge amount of council tax that they have to pay for the upkeep of their local communities, and the many duties that the Government have heaped on them over the years. And, of course, on a rather different level, the top-up of pension credit for those aged over 70.

I find it curious that only in 2004, as the Minister has said, we passed the Age-related Payments Act, and, when the order implementing the order came through, we were told that it was a one-off. Well, now it is a "two-off", and beginning to look like a regular top-up of pensioners' incomes.

Of course the Minister will tell me that there is no current intention to repeat them. As a regular Government-watcher over the past seven years, I assume that that means until we near the next general election. That is no way to run a social security system. Indeed, both payments are completely unrelated to the tax and benefits system.

That said, the fact is that, welcome as they are, these soi disant one-off payments do not solve the problem, which is one of the Government piling duties on local authorities without—and this is the point—providing sufficient resources from central taxation. While I accept that local authorities vary in their efficiency, on average they are under-financed by central government. Local government finance is in a mess. What plans do the Government, in the shape of the Deputy Prime Minister, intend to implement? Local taxpayers' patience is running out. Was not my party right to say earlier this year that payments by pensioners should be capped? This holding position cannot and must not last. For the OPDM website to claim, as the Minister did today, that high council tax increases are a thing of the past is ludicrous.

The OPDM review of the subject appears to have had no other result but to require another inquiry chaired by Sir Michael Lyons. Now that the general election is out of the way, the Government should get on with it and not take the lackadaisical approach that they are with pensions. But that is for another debate.

Lord Oakeshott of Seagrove Bay: I welcome the noble Lord, Lord Hunt of Kings Heath, to his new responsibilities, but say that we miss him as chairman of the Merits of Statutory Instruments Committee. For reasons which I am sure that noble Lords will understand, I did not arrive at the House quite as early as I intended today. I was concerned to read and see the report literally coming out from the Merits of Statutory Instruments Committee on the day that we are due to discuss the order. Luckily I am a speed reader—I suppose we all have to be in this House. It makes some serious points. The noble Lord has dealt with the specific point it makes, but I think the general point is that, if the Government are to achieve their
 
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objective of making statutory instruments more accessible to the lay reader, the Explanatory Notes should be clear and should not assume previous knowledge of the subject. That point should be well taken and a little more starting from the ground up in the Explanatory Notes would be welcome.

I turn to the substance of the regulations. Our position is that this is not the right way to deal with the obvious and acknowledged problems of poverty and old age, and, in particular, difficulties with council tax payments. I am afraid that these measures that we get year after year are classic Gordon Brown. What we get is a raft of fiddly individual payments, almost as though the Chancellor is going around like Lady Bountiful at Christmas handing out turkeys to the grateful retainers on the estate, instead of actually paying them a proper wage in that sense or a proper pension all year. I shall make it quite clear that although we welcome, or would not oppose, any help of that kind, we believe that it is totally unsatisfactory and quite the wrong way to deal with the sustained, very serious problem of pensioner poverty.

The extract from the Chancellor's Budget Statement, for sheer bold effrontery, took the biscuit. The Chancellor said:

"I can announce that we will pay to every pensioner household, 65 and over, paying council tax, a refund not of £50 but a council tax refund of £200—a measure that is fairer and worth more to more pensioners than all other proposed schemes".—[Official Report, Commons, 16/3/05; col. 269.]

Proposed by whom? That is patent nonsense. How on earth can that be fairer than our policy, which is to abolish council tax altogether and relate it entirely to ability to pay through a local income tax? With those specific questions, I welcome any assurance that we can be given—I appreciate that this is not now his responsibility, but perhaps I can make the point—that reports from the Merits of Statutory Instruments Committee should give a little more time for consideration before these matters are considered. I look forward to the Minister's reply.

3 pm

Lord Hunt of Kings Heath: I thank noble Lords for what I detected in their speeches, notes of constructive welcome at least for the payments to older people. First, I shall deal with the question raised by most noble Lords on the Merits Committee. Noble Lords will know that I take this very seriously. If I may modestly say so, the Merits Committee has made at least a modest contribution to improving the quality of the explanatory memorandum, which has also been introduced for negative SIs. I certainly take the point that the whole purpose is to make it clear, both to Members of the House and to outsiders, exactly the purpose of statutory instruments. I very much take to heart the comments made by noble Lords on this matter, and, of course, we shall ensure that the department learns a lesson from that and that in future the explanatory memorandums are as clear as they possibly can be.

The noble Lord, Lord Skelmersdale, welcomed the contribution of payments. I thought he made a rather unworthy remark about general elections, to which I
 
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am sure he would not want me to respond. On the general point that he makes about local government finance, and on the comments made by the noble Lord, Lord Oakeshott, as Members will know, we have the Lyons review which will look carefully at some of the points that both noble Lords have raised. Therefore, I do not believe that I am in a position to comment further on those points, save to say that as someone who, like the noble Lord, started life in local government a long time ago now, I find that in local government finance, while it is easy to come up with radical suggestions, there are often great difficulties with whatever proposal is made. I do not believe that there is a simple answer to some of the points raised about the overall issue of local government financing.

On the other debate, which I suppose is about targeted payments, as opposed to universal benefits, that too is a matter which has been well aired in the House over many years. I believe that there are considerable benefits in some targeted payments. Those particular payments have been widely welcomed and I commend them to the Grand Committee—if that is how we should describe it, as the noble Lord, Lord Skelmersdale, suggests.

On Question, Motion agreed to.

Pension Protection Fund (Investigation by PPF Ombudsman of Complaints of Maladministration) Regulations 2005

3.4 pm

Lord Hunt of Kings Heath rose to move, That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Investigation by PPF Ombudsman of Complaints of Maladministration) Regulations 2005.

The noble Lord said: In moving the Motion, I shall speak also to the Pension Protection Fund (Reference of Reviewable Matters to the PPF Ombudsman) Regulations 2005 and the Pension Protection Fund (PPF Ombudsman) Amendment Order 2005. All these orders were laid before the House on 29 June. I understand that the Merits Committee has not sought to comment on these regulations, I am glad to say.

These statutory instruments are needed to give detailed effect to the important roles and responsibilities of the Pension Protection Fund Ombudsman—the PPF Ombudsman, as he is commonly known. Your Lordships will be aware that the Government introduced a number of measures to protect better the interests of members of occupational pension schemes in the Pensions Act 2004. The key part of the Government's approach has been the establishment of the Pension Protection Fund—the PPF. So on 6 April this year, if a company with a defined-benefit scheme becomes insolvent and its pension fund is insufficiently funded to pay the PPF levels of benefit, members can be assured that they will still receive a meaningful level of income in retirement.

I have no doubt that the PPF will aim to reach all of its decisions correctly. However, as we all know only too well, mistakes can arise in any organisation. So in
 
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establishing the PPF we have been mindful of the need to deal fairly with any problems or disputes that may arise in the course of its business. A list of the reviewable matters is therefore set out in Schedule 9 to the Pensions Act 2004. We have provided for a two-stage internal dispute process which allows those affected by the decision to dispute it. The first regulations already provide that the PPF board must review its decisions when requested. Secondly, it must reconsider those reviews if further requested. The board may also review and reconsider decisions of its own volition. Complaints of maladministration may also be referred to the board and regulations have established the procedure in this respect. If, after the internal two-stage process, a party is still not content with the outcome of the review, he may refer the matter onwards to the independent PPF Ombudsman.

As for the sets of regulations, these are for the PPF Ombudsman's investigation of reviewable matters and of complaints of maladministration that are referred to him. Given that the procedure set out in the two sets of regulations is broadly similar, I shall discuss them together. These regulations deal with applications to the PPF Ombudsman, investigations by the PPF Ombudsman and determinations made by the PPF Ombudsman. Some of the detail set out in these regulations is similar to those governing the work of the Office of the Pensions Ombudsman, which has been in existence since 1991.

There are, however, some differences between the two roles. First, the Pensions Ombudsman deals with complaints and disputes regarding pension schemes. The PPF Ombudsman deals entirely with complaints and disputes arising from the Pension Protection Fund. Secondly, the PPF Ombudsman will deal with class actions, whereas the Pensions Ombudsman does not. This means that when carrying out an investigation the PPF Ombudsman will need to notify others who he thinks may be significantly adversely affected by his determination and he must notify them that an application has been made. This is so that they may make representations if they so wish. Finally, these regulations include a prescribed time limit for the PPF Ombudsman to reach a determination, whereas the Pensions Ombudsman has no time limits on reaching a determination.

On the timings for people to make a reference and for the PPF Ombudsman to investigate and determine any such reference, the detailed regulations set those out, but provisions have also been made so that the PPF Ombudsman can in most cases accept a late reference where this is appropriate. The PPF Ombudsman has a duty to investigate a reference duly made to him. He may choose to hold an oral hearing or he may decide to carry out an investigation based on the paperwork before him. It is anticipated that most references will be paper-based, and that will be for the PPF Ombudsman to determine. At the request of the Council on Tribunals, there is the right for a party to a reference to request an oral hearing, and the ombudsman must consider such requests and explain in writing if he decides not to grant them. As part of his investigation, the PPF Ombudsman may consider
 
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evidence that was not available to the board of the PPF or to the committee of the board that undertook the second stage internal consideration of the issue.

The PPF Ombudsman can also accept at any time supplementary statements in respect of a reference, and the regulations provide for the PPF Ombudsman to make a decision not to investigate in some cases. For example, he can make a decision not to investigate if a party makes a late application to him. Where the PPF Ombudsman decides to hold an oral hearing, he must fix an appropriate time and place and notify all the relevant parties providing details of where the hearing will be heard, the purpose of the hearing, and the rights of the parties. For the reaching and giving of determinations, provisions in the regulations give the PPF Ombudsman the power to direct the board to take any action including the payment of any compensation he considers appropriate.

When the PPF Ombudsman makes determinations and gives directions, he must include a statement of the reasons for them. He must notify the referring party, the PPF board and people who were notified early on—those whom the ombudsman considered might be significantly adversely affected. The PPF Ombudsman may deal together with references that are the same or of similar content. He may also identify one particular person to exemplify the issues arising from the number of references. He has powers to make a single determination covering both a reviewable matter and a complaint of maladministration. The ombudsman must make available for inspection the reference and any document in respect of the reference, and, as a corollary, the regulations restrict the use of such documents and information.

There are some differences between the two sets of regulations which stem from the different sorts of issues that will arise between maladministration complaints and reviews of PPF board decisions. For example, since primary legislation requires the Council on Tribunals to have oversight of the procedural rules for reviewable matters, the instrument includes provisions that relate to the council. Because some PPF board decisions need to become binding as quickly as appropriate, the time limits for some requests for reviewable matters cannot be extended. A third example is that, by their nature, provisions for determinations consequential directions are more complex for reviewable matters than for complaints of maladministration by their nature.

I now come to the Pension Protection Fund (PPF Ombudsman) Amendment Order 2005. When we were making the detailed provisions in these regulations, we realised that we would need to extend the provision in Article 7 of the principal PPF Order, which was made on 15 March. That order makes provision for the ombudsman remuneration, compensation for loss of office and pension, the staff of the PPF Ombudsman, the delegation of functions, the power to obtain information and for restrictions on the disclosure of information. The provisions in the amending order deal with the restrictions on the disclosure of
 
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information. We need to permit disclosure by the PPF Ombudsman during the course of his investigations in specific circumstances.

Essentially, the order enables the ombudsman to disclose information to the Council on Tribunals so that the council can exercise its functions effectively. The provisions in the order are drawn tightly, which is appropriate, but they would preclude the ombudsman from giving the council information. The council has oversight of procedure rules in the reviewal matters regulations, and has the right to attend oral hearings and sit in on any deliberations straight after a normal hearing. This is an appropriate use of the disclosure power. The amendment order also provides for people to whom the ombudsman may disclose information if he considers it necessary. That is so that he can carry out his own functions as ombudsman effectively. Without the amendment order, he would otherwise not have the power to disclose information on people who were notified of a reference. They are essentially the people whom the ombudsman considers may be significantly adversely affected by his determination. Finally, the new order makes provision for disclosure to a person providing an expert opinion or other evidence and extends the powers of disclosure to the PPF board and to the person making the reference and to a representative. In conclusion, I am satisfied that the orders are compatible with the European Convention on Human Rights, and I commend them to the committee. I beg to move.

Moved, That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Investigation by PPF Ombudsman of Complaints of Maladministration) Regulations 2005.—(Lord Hunt of King's Heath.)

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