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Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005

Lord Hunt of Kings Heath rose to move, That the draft regulations laid before the House on 26 October be approved. [7th Report from the Joint Committee and 13th Report from the Merits Committee].

The noble Lord said: My Lords, in moving the Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005, I shall speak also to the Financial Assistance Scheme (Appeals) Regulations 2005.

Noble Lords will no doubt recall that in July we saw the introduction of the Financial Assistance Scheme (Appeals) Regulations, which allow someone who is dissatisfied with a review decision from the FAS scheme manager also to request an appeal against that review decision. The regulations set out the detail of the appeals process and appoint the Pension Protection Fund—PPF—ombudsman and the deputy PPF ombudsmen to hear appeals against internal review decisions that have been made by the scheme manager of the FAS. The persons who may appeal to the ombudsman are specified within these regulations. These are any interested persons to whom a notice of a review decision or subsequent review decision has been given by the FAS scheme manager under regulation 16 of the internal review regulations. "Interested persons" are defined as anyone who can apply under regulation 6 for a review of a reviewable determination under the internal review regulations, such as beneficiaries or potential beneficiaries, trustees, or those persons' representatives.

The regulations also set out the time limits for appealing and the information that must be contained in the notice of the appeal. The regulations set out the procedures that must be followed by the ombudsman when he receives notice of an appeal. He must send an acknowledgment of the notice of appeal to each party to the appeal or that party's representative. Where the appeal relates to a scheme notification of scheme eligibility decision, there is a requirement for the ombudsman to take reasonable steps to publicise to all other interested persons in relation to the appeal the fact that an appeal has been made.

Where two or more appeals are received in respect of the same matter relating to scheme notification or scheme eligibility, and those appeals are made on the same or broadly the same grounds, the ombudsman may make a single determination in respect of them all. That should speed up the time taken to reach a determination in some cases, and it will reduce the overall costs. Provisions are also contained in these regulations to provide for the ombudsman to convene an oral hearing where appropriate. The ombudsman can request an expert opinion on an appeal in respect of the FAS. If the ombudsman has given prior approval, he may pay costs and expenses incurred by parties to the appeal, witnesses who have been requested to attend an oral hearing, and any person he has appointed as a representative of a party.
 
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The FAS (Modifications and Miscellaneous) Regulations 2005 set out the modifications that are required to the Pensions Act 2004 for the PPF ombudsman to carry out his duties in respect of the FAS appeals scheme. The regulations also include some amendments to the FAS Regulations 2005, the FAS (Internal Review) Regulations 2005 and the FAS (Provision of Information and Administration of Payments) Regulations 2005.

Noble Lords will be aware how important the need was to get the FAS up and running so that members could receive assistance as soon as possible. Through these amendments essential clarification is provided on certain aspects of the FAS scheme. When developing the appeals regulations we identified the need to clarify some definitions to ensure there was consistency. Other areas of work were also identified as requiring specific amendments to ensure that the policy intention was reflected clearly.

These regulations have been introduced to provide for modifications that are required to the Pensions Act 2004 in order for the PPF ombudsman to carry out his duties in respect of FAS appeals and to allow for necessary amendments to be made to existing regulations. These amendments will provide clarification on aspects of the FAS and, importantly, provide for initial payments to be made to survivors of qualifying members.

There is a requirement for the PPF ombudsman to provide the Secretary of State with a separate report on the duties he has carried out in connection with FAS appeals for each financial year. This is achieved through a modification to the section of the Pensions Act 2004 dealing with the PPF ombudsman's duty to prepare an annual report. This will now include a requirement for a separate report on the ombudsman's functions to be prepared in relation to the FAS. The modifications also provide the power that enables the making of the provision in the appeals regulations to meet costs and expenses.

These regulations allow the ombudsman to refer a question of law arising from the investigation of a FAS appeal to the High Court in England and Wales or in Northern Ireland, or the Court of Sessions in Scotland. Amendments have also been made to the FAS Regulations 2005 (S.I. 2005/1986) by substituting regulation 18 of those regulations and by making other consequential and minor amendments.

Moving now to the amendments to the FAS (Internal Review) Regulations 2005 (S.I.2005/1994), most are minor but I must draw noble Lords' attention to one amendment to the internal review regulations, which relates to the time limits for requesting a review. There is currently no time limit set for members to request a review of member eligibility or member assessment decisions. This amendment imposes a one month time limit and the policy intention is that it should be able to be extended to 12 months at the Secretary of State's decision.

I should draw noble Lords' attention to one aspect of the amendment. I regret that there is a typographical error in regulation 5(7)(c). This is the
 
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regulation which deals with the time for making an application for a review of a reviewable determination. At the end of that sub-paragraph it will be noted that current wording is "insert 'or (b)'". This should instead read "insert 'or (c)'". The current wording has the effect of allowing the scheme manager to extend the existing timescale in which to request a review of member-related decisions to 12 months where he considers that there are reasonable grounds for doing so. As there is currently no timescale in which to request a review, the scheme manager would be extending an already unlimited timescale by 12 months.

The explanatory memorandum for this instrument made clear that the intention was to introduce a one month time limit with discretion to extend that new timescale to 12 months. As drafted, the regulation allows for the one month time limit but not the extension. I apologise to the House for that and it is my intention that this will be amended at the earliest opportunity.

Minor amendments have also been made to the Financial Assistance Scheme (Provision of Information and Administration of Payments) Regulations 2005. They are necessary either to clarify existing definitions or to clarify certain requirements.

I should inform the House that the FAS operational unit which opened for business on 1 September has been receiving notification details from affected schemes and will do so until the end of the notification period on 28 February 2006. The operational unit has also begun making decisions on scheme qualifications, with the first decisions being made on 25 October. Affected schemes can refer to the DWP website, which is regularly updated for further information. I beg to move.

Moved, That the draft regulations laid before the House on 26 October be approved [7th Report from the Joint Committee and 13th Report from the Merits Committee].—(Lord Hunt of Kings Heath.)

Lord Oakeshott of Seagrove Bay: My Lords, when I met the noble Lord, Lord Skelmersdale, earlier, he suggested that he would prefer to hold his fire until I had shot my bolt; so I am happy to start. I thank the Minister for his explanation of these regulations and for having the courtesy to write to me in advance with the apology for the correction that he has just mentioned. I am happy to accept that.

When we last debated a statutory instrument on the FAS, I drew attention to the estimated £16 million running cost of the scheme over its first three years of operation, including setting up costs. Can the Minister give us his latest estimate of those costs over the three years, bearing in mind that no robbed pensioner has had even the tiniest taste of a payment from this pitiful little pretence of a rescue fund? I should put clearly on the record from these Benches, as the spokesman for my party in this House, that government financial compensation payable under the financial assistance scheme should be on the same terms as those payable by the Pension Protection Fund.
 
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I must press the Minister to reply to the serious concerns raised by the Merits of Statutory Instruments Committee. I was slightly surprised that he did not refer to those in his opening remarks. It stated:

It stated in Paragraph 11 of its report:

The committee stated in Paragraph 13:

Well, join the club. Amen to that. Not to put too fine a point on it, policy is being made on the hoof.

Turning to the details of the regulations, we broadly support them as being necessary to enable the FAS to do its job. I accept that the Minister is new, but I am bound to put again, as we did during the passage of the Pensions Bill, that it is a waste of time and money to have set up the FAS completely separately from the Pension Protection Fund, rather than let the scheme operate under the PPF umbrella. Clearly, this is a duplication of functions.


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