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The noble Lord said: I would like to return to the issue of the extent of the powers being given to the

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Pensions Regulator by this chapter. Actually it is another chapter—but never mind, we will forget about that for the moment. Clause 44 amends the Pensions Act 2004 to extend the regulator’s powers to enter premises to investigate compliance with this Bill.

I accept that this clause does not actually add significant new powers to the regulator, because in the 2004 Act the regulator can enter premises to investigate compliance with the Welfare Reform and Pensions Act 1999, particularly the duty of employers to facilitate access to stakeholder pension schemes. Why that was not thought of originally in 1999, I have no idea, but I suspect that the noble Lord does not either. Clause 44 just allows them to enter to investigate compliance with relevant parts of this Bill.

This seems a good opportunity to probe how the Government intend the regulator to police employers’ compliance. Do they expect the majority of investigations to be sparked by jobholder complaints or, perhaps, rather ominously, by Her Majesty’s Customs and Revenue? How many investigators does the Pensions Regulator have now and how many extra does the Minister anticipate will be necessary to ensure compliance with auto-enrolment? I beg to move.

Lord Oakeshott of Seagrove Bay: In this context, can the Minister confirm that “premises” will mean only business premises and not someone’s home?

7.15 pm

Lord Tunnicliffe: Where the regulator is of the opinion that an employer is not or may not be complying with its new duties under Chapter 1 of the Bill, it will need the power to conduct further investigations. It is important that regulators in whatever field have the power to conduct necessary investigative work. For example, HMRC’s inspectors have the power under Section 14 of the National Minimum Wage Act to require employers to produce records and to enter employers’ premises where necessary in the course of their investigation.

Section 74 of the Pensions Act 2004 gives an inspector appointed by the regulator the power to enter premises for the purpose of investigating whether an employer is complying with certain legal obligations relating to pension provisions. Clause 44 extends Section 74 of the 2004 Act to give an inspector the power to enter premises to investigate whether the employer is complying with the new legal obligations the Bill creates in Chapter 1, Part 1.

The noble Lord’s amendment would leave inspectors with the power to enter premises in the course of investigating, say, apparent irregularities of payments to pension schemes—the 2004 Act gives them that power—but to deny them that power in relation to the new duties created in the Bill, matters such as the requirements to automatically enrol eligible jobholders and calculate contributions accurately, and so on. That would seem a serious omission given the importance that we attach to saving for retirement and our commitment to helping low and medium-earning workers to provide for their old age.

I do not expect the power to enter premises to be used lightly. We expect the great majority of employers to comply fully with the new requirements, and many,

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if not most, of those who do not will have done so inadvertently and will put matters right as soon as their errors are pointed out. However, there may well be cases in which workers have raised concerns about the employer’s behaviour or its administration of the scheme, or where an inspector had good reason to suspect that an employer may be giving false or misleading information. In those circumstances a visit by an inspector may be necessary to resolve any concerns.

We are aware that some employers operate their business from their home address, and we expect that inspectors will take this into account when they plan to visit employers’ premises. The power of inspection will not apply where a dwelling house is not used for the purpose of trade or business. I hope the noble Lord is reassured by those explanations.

As for the general procedures by which compliance with the Act will be verified, the Act gives the regulator power to have large amounts of information, for example from HMRC. That sort of information will carry the great burden of ensuring compliance, and the power to inspect premises will rarely be used.

Lord Skelmersdale: It seems that I am not the only one whose attention slips during a long and warm afternoon. I asked the Minister whether he expected the majority of investigations to be sparked by the jobholder or by HMRC. He did not tell me which he thought was the most likely. Secondly, I asked how many investigators the Pensions Regulator has now and how many extra he expects the regulator to need. I think that those are perfectly reasonable and sensible questions.

Lord Tunnicliffe: They may be perfectly reasonable and sensible questions but they are not in my brief. I am being briefed to react to the issue of entering premises and using investigative powers. We anticipate that the investigation of premises by the regulator will arise primarily from whistleblowing complaints; that is, where an individual has alerted the regulator to a potential instance of non-compliance.

Lord Skelmersdale: I am reminded of a late noble Lord who was on the opposite Front Bench for some years. He had a cleft palate and was wont to say, “Not in my bweef, my Lords”, which is exactly the same response as we have had from the noble Lord, Lord Tunnicliffe. At some point, please may I have a letter from one Minister or the other to say how many investigators the Pensions Regulator has now? I still think that that is a perfectly reasonable question but it is quite clear that I will not get an answer tonight so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Tunnicliffe moved Amendment No. 99ZA:

(a) any provision of, or of regulations under, Chapter 1 of Part 1, or section 49 or (Inducements), of the Pensions Act 2008, or(b) any corresponding provision in force in Northern Ireland,”

On Question, amendment agreed to.

[Amendments Nos. 99A and 99B had been withdrawn from the Marshalled List.]



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Lord Tunnicliffe moved Amendment No. 100:

On Question, amendment agreed to.

Lord Tunnicliffe moved Amendment No. 100A:

The noble Lord said: I have tabled government amendments to Clause 44 to create consistency between the entry and inspection powers in the Bill and the corresponding provisions in the Pensions Act 2004.

Section 74 of the 2004 Act gives an inspector appointed by the regulator the power to enter premises, liable to inspection, for the purpose of investigating whether an employer has complied with the stakeholder pension requirements under the Welfare Reform and Pensions Act 1999 or any corresponding provision in force in Northern Ireland.

The Bill puts in place new duties on employers, and we may expect that from time to time inspectors will need to enter and inspect premises to ensure that employers are complying with the requirements. Amendments Nos. 100A and 101AA will allow an inspector to enter premises to check whether an employer is complying with the duties in Chapter 1 or with the corresponding Northern Ireland legislation, or both.

Again, with a view to ensuring consistency between certain clauses of the Bill and other legislation to which they relate, I have introduced amendments to Clause 121. This clause extends Chapters 4 and 5 to Northern Ireland. The first amendment extends the interpretations of terms defined in Clause 86 to Northern Ireland where the terms relate to Chapters 4 and 5 of the Bill. The second amends the extent provision in this Bill to recognise that Clauses 46 and 47 and paragraph 9 of Schedule 8 have the extent specified within them. I beg to move.

Lord Skelmersdale: When I was a junior Minister in the Northern Ireland department, it was made clear to me that the Province was very keen to hang on to its own statute book. That also applied to some social security legislation, which, although it paralleled what was going on in the rest of the country, was not absolutely identical. It occurs to me to ask the Minister whether this position still exists or whether some sort of Northern Ireland order will accompany this legislation, when enacted.

Lord Tunnicliffe: I am sorry; I do not have the answer to that question and it would be wrong of me to try to guess it.

On Question, amendment agreed to.

Lord Tunnicliffe moved Amendment No. 101:

On Question, amendment agreed to.

[Amendment No. 101A had been withdrawn from the Marshalled List.]

Lord Tunnicliffe moved Amendment No. 101AA:

On Question, amendment agreed to.

Clause 44, as amended, agreed to.

Lord Tunnicliffe moved Amendment No. 101B:

On Question, amendment agreed to.

Clause 45 [Disclosure of tax information etc]:

Lord Skelmersdale moved Amendment No. 102:

The noble Lord said: I hope that the Minister—whichever one is to answer—will regard this as a simple probing amendment. Its intention is to establish what sort of co-operation the new subsection at lines 30 to 33 on page 21 will establish. In what circumstances will Her Majesty’s Revenue and Customs provide information to the regulator? Will the regulator have to ask specifically if there is evidence of an employer avoiding other obligations, such as compliance with the national minimum wage, or will HMRC spontaneously offer up names of employers whom they consider worth investigating? I note what the Minister said earlier about complaints coming from both HMRC and jobholders, although the majority would appear to be from jobholders.

If HMRC spontaneously offers up these names, will there be clear guidance on when information should be offered or will it be entirely ad hoc and dependent on individual HMRC officers who remember that another government body may be able to use the information?

I should also like to explore the effectiveness of these growing interorganisational relationships. I recently discussed a similar partnership between HMRC and the Child Support Agency, where a plan to allow for the secondment of officials between bodies looked worthwhile on paper but entirely failed to reached its potential in practice. Is anything similar planned in this instance and, if so, what steps will the Government take to ensure that these secondments are more effective? I beg to move.

Lord McKenzie of Luton: This amendment would disable the new provision for HMRC to share information with the Pensions Regulator for compliance purposes and it would eliminate existing data-sharing arrangements between the two. I understand that that is not the import of the amendment but I thank the noble Lord, Lord Skelmersdale, for giving us the opportunity to discuss this matter.

I am aware that lapses in data security in recent months have rightly caused great anxiety and wish to reassure noble Lords that we share that concern. I should like to explain why the data-sharing provided for in Clause 45 is vital and outline the steps that we are taking to ensure that the transfer and storage processes will be protected by the highest standards of data security.

HMRC, through its PAYE responsibilities, is the only holder of a comprehensive UK employer database. These data will allow the regulator to communicate with employers about their new duties and to run a

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registration process requiring employers to state how they will meet their new responsibilities. Without registration, compliance with the employer duties would be much lower, and millions could be denied access to pension saving. In addition, this subsection is designed to allow HMRC to share information about non-compliance which it has collected through tax and national minimum wage activities. This will help the Pensions Regulator to identify which employers are more likely not to comply with their new duties. Finally, the clause replaces the regulator’s existing gateway to exchange data with HMRC, which is crucial to the regulator’s ability to deliver its existing functions.

It is of course vital to ensure that data are transferred safely and securely. The Bill, and Clause 47 in particular, strengthens the legal safeguards of data shared by HMRC by increasing the maximum sentence that a magistrate can impose on Pensions Regulator staff who unlawfully disclose restricted data. This sanction also applies to anyone who unlawfully discloses restricted data which they have received from the Pensions Regulator.

The noble Lord referred to secondments or transfers between departments, which we discussed to some extent during the passage of the Child Maintenance and Other Payments Bill. There may well be arrangements for people to be seconded from one department to another, but when individuals arrive in a transferee department, they will be subject to the same procedures, processes and systems as any other employee in that department. The fact that they may have come from another department does not matter. They may bring expertise and experience with them, but this is not meant to be a loop round what should be a formal gateway.

The noble Lord also asked how the arrangement will work, particularly in relation to information related to non-compliance with the national minimum wage. The data-sharing arrangements have yet to be operationally finalised, but the clause will allow HMRC to provide the regulator with information regularly about employers who are not complying with other legislation. That could be at the request of the regulator or on HMRC’s initiative. Clearly, this needs to be formalised and procedures need to be set up. The key point is that that information flows on a structured basis and that it is protected. I hope that enables the noble Lord to withdraw his amendment.

7.30 pm

Lord Skelmersdale: This is obviously a recurring theme of mine. I am worried that to a great extent transferees have to have a form of amnesia as regards their previous employment. However, I shall not go into that matter tonight.

Lord McKenzie of Luton: I do not think that was what I said. That misunderstanding may be running over from the previous legislation that we discussed. Transferring individuals between departments does not mean that they do not bring with them their expertise, knowledge and experience, which could well be brought to bear and made good use of. My point was that, simply because they come from another

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department, there should not be informal transfers of information and loops back to that department. The gateways are there on a statutory basis for very good reasons. Transferees or secondees, just like any other employee of the Pensions Regulator, will be subject to the same processes and procedures.

Lord Skelmersdale: By using the word “amnesia” I meant that, if a particular individual who has just been transferred from Revenue and Customs has been looking at an employer’s account and it needs to be looked at again, he has to go back through the proper channels to be effective. I will not get into that argument now. I am grateful to the Minister because I think I have had an answer to my question, which is the spontaneous offering-up of names by HMRC. Of course it has the biggest database, if it does not lose it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 agreed to.

Lord McKenzie of Luton moved Amendment No. 102A:

On Question, amendment agreed to.

Lord Tunnicliffe: I beg to move that the House do now resume. In moving the Motion, I suggest that the Committee stage begin again not before 8.33 pm.

Moved accordingly, and, on Question, Motion agreed to.

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