Personal accounts delivery authority
Mr. Waterson: I beg to move amendment No. 81, in clause 18, page 20, line 31, leave out subsection (2).
Clause stand part.
Amendment No. 8, in schedule 6, page 55, line 1, after a, insert lay.
Amendment No. 41, in schedule 6, page 55, line 1, leave out chairman and insert
lay chair who is not perceived to have a conflict of interest with regard to the financial services industry, but is there to represent the views and look after the interests of scheme members and prospective scheme members,.
Amendment No. 9, in schedule 6, page 55, line 2, after members, insert
(of which two shall be appointed to represent the interests of consumers).
Amendment No. 42, in schedule 6, page 55, line 2, after members, insert
, of which at least two out of nine members will be non-executive consumer directors who represent scheme members and prospective scheme members and are recognised professionally by consumer groups,.
Amendment No. 10, in schedule 6, page 55, line 3, leave out or (3) and insert , (3) or (3A).
Amendment No. 11, in schedule 6, page 55, line 8, at end insert
(3A) Before appointing, or approving the appointment of, any member representing the interests of consumers for the purposes of sub-paragraph (1)(b), the Secretary of State must consult such organisations as appear to him to represent the interests of consumers..
Amendment No. 44, in schedule 6, page 55, line 8, at end insert
(3A) Any consumer appointments for the purposes of sub-sub-paragraph (1)(b) must be discussed with consumer groups prior to appointment and the said consumer groups will have the right to comment on the said appointments..
Amendment No. 12, in schedule 6, page 55, line 11, at end insert
1A Before appointing any member of the Authority under sub-paragraph 1(1) the Secretary of State must
(a) conduct and open recruitment competition inviting applications from individuals with extensive knowledge, experience and expertise in the fields of pensions or financial marketing or both;
(b) consult organisations which appear to him to represent key groups of stakeholders;
(c) have regard to the desirability of appointing a group of members whose expertise collectively spans all aspects of occupational and personal pension provision and financial marketing..
Amendment No. 13, in schedule 6, page 55, line 11, at end insert
1A In appointing members the Secretary of State shall have regard to the desirability of recruiting a group of members so that there is a balance as the Secretary of State considers appropriate between
(a) members with knowledge and experience of consumers pension needs;
(b) members with knowledge and experience of employers involvement in pensions;
(c) members with knowledge and experience of pensions from the pension providers;
(d) members with knowledge and experience of pensions from the relevant regulators..
Amendment No. 15, in schedule 6, page 55, line 30, leave out or other.
Amendment No. 82, in schedule 6, page 56, line 26, leave out sub-paragraph (2).
Amendment No. 45, in schedule 6, page 59, line 7, at end insert
(2) The Authority shall establish a committee for the purpose of representing scheme member and prospective scheme member interests, which shall be chaired by a consumer representative..
Amendment No. 14, in schedule 6, page 59, line 20, at end insert
10A (1) The Authority must establish a committee for the purpose of representing the interests of scheme members and prospective scheme members.
(2) The chairman of the committee must be a consumer representative appointed under paragraphs 1(1)(b) and 1(3A)..
That schedule 6 be the Sixth schedule to the Bill.
New clause 5Application of Freedom of Information Act to Personal Accounts Delivery Authority
(1) The Freedom of Information Act 2000 (c. 36) is amended as follows.
(2) In section 35 (formulation of government policy etc.) insert after subsection (2)
(2A) Information held by or provided by the Personal Accounts Delivery Authority is not to be regarded
(a) for the purposes of subsection (1)(a), as relating to the formulation or development of government policy, or
(b) for the purposes of subsection (1)(b), as relating to Ministerial communications.
(3) In section 36 (prejudice to effective conduct of public affairs) insert after subsection (2)
(2A) Information held by or provided by the Personal Accounts Delivery Authority is not be to regarded
(a) for the purposes of subsection (2)(a), as relating to the maintenance of the convention of the collective responsibility of Ministers of the Crown, or
(b) for the purposes of subsection (2)(b), as relating to the free and frank provision of advice, or the free and frank exchange of views for the purposes of deliberation; or
(c) for the purposes of subsection (2)(c), as relating to the effective conduct of public affairs...
Mr. Waterson: I feel quite weak, Mr. Gale, faced with such a large group of amendments and new clauses, but I shall try to rise to the occasion. Unfortunately, I cannot promise to be brief on this group, particularly as it includes clause stand part.
We have now moved on to the next important part of the Bill. It deals with the system for personal accounts. It is worth setting out a few parameters for the debate before I go through the various amendments and new clauses, particularly as it includes clause stand part.
I was interested, as all members of the Committee were, to receive the Ministers letter of yesterday, which I thought had a hint of nervousness about it, and I shall explain why. Our suspicion has always been that the reaction of Ministers to this set of amendments would be that they were all matters for the next Bill, which will come up next year.
Mr. Waterson: The Minister says, right on cue, that they are. Well, we beg to disagree. Of course, there are areas of detail about personal accounts that it is inappropriate to go into here, Mr. Gale, as I am sure that you would be the first to remind us. However, we fear that there is a temptation into which Ministers are
As I said, I thought that the letter of 31 January betrayed a certain nervousness on the part of the Minister. In the second paragraph, it says that
delivering and managing a major occupational pension scheme such as personal accounts... should not be a task for government.
The answer to that, as I have tried to indicate, is yes and no. Of course, they are right, as the Minister goes on to say:
We therefore propose to bring in experts to help develop and deliver the personal accounts scheme.
He goes on to talk about the second pensions Bill later this year, and to stress the advisory nature of the delivery authority. That is all well and good, but to take one clear example before I move onto the weight of the amendments, he talks about
advising on the design of the commercial strategy.
As I have made clear in more than one speech, the Opposition hope that personal accounts will be a success, not only because they are the right approach to take to such a massive change in our systems, but because we may be the ones to inherit their implementation. We think that personal accounts have got to have the right shape, in a very general sense. I do not want the Minister to get too worried; we do not want to be too prescriptive, but we need to feel that the system is going to work. If it fails, and the accounts are not sufficiently attractive to the target audiencewe shall come later to issues about whether the target group has changedwe want to do what we can to try to put that right now.
James Purnell: I want to correct any impression that we were nervous; it is more that we were confused by the number of amendments, given that we think that they pertain to the White Paper consultation and the next potential Bill. I refer the hon. Gentleman to clause 19(2), which makes it clear that this is all about advice on
proposals by the Secretary of State.
There will not be an organisation taking decisions; there will be an organisation advising the Secretary of State. That is the hon. Gentlemans grab handle if he is worried about our falling off the cliff and giving it all to another body to make the decisions. They will be decisions by the Secretary of State, not by the authority.
Mr. Waterson: I take the Ministers point, but I would say two things. First, the body itself will probably benefit from some sort of steer from the Committee as
I now turn to annexe Arather bizarrely, there is no annexe Bto the Ministers letter, in which he says:
The Delivery Authority will be led by a Chair and Chief Executive with the right skills and expertise...supported by appropriate legal, commercial operational, business and financial expertise.
That is the kind of issue that we want to explore in more detail. Crucially, he moves on to marketing and communications. We think that marketing is a crucial part of selling personal accounts; people will have to want to buy them. I will also talk about that in more detail.
The annexe to the Ministers letter then refers to the role of the personal accounts board, which
will be responsible for the management, rather than the delivery, of the personal accounts scheme.
That is an important distinction. We are concerned that the delivery authority should be set up. Although in law the authority and the board are separate entities, we are worried that the Government want to see one morph into the other. Each requires a wholly different skills set for the introduction and delivery of the concept. The Minister recognises that by saying:
There is a clear distinction between the work of the Delivery Authority and the personal accounts board.
We want to underline that in these debates.
I shall assist the Committee by pointing out that clause 18, along with schedule 6, is about pay and rations, as it were, or the nuts and bolts. Clause 19 is about the wider issuesthe purpose and scope of personal accounts, the authoritys relationship with its successor body and the definition of success or failure. There I fear that we may bump up against the limits of consensus, but we will see where the discussion takes us.
I shall move rapidly on to the large group of amendments, beginning with amendment No. 81, which is a probing amendment that will allow me to raise a couple of concerns. Subsection (2) makes it clear that:
The Authority is not to be regarded as the servant or agent of the Crown
and therefore does not enjoy Crown immunity or any claims. That raises an important issue, which arises in the context of the European Court proceedings that have just been concluded against the Government and the High Court proceedings that have been brought by pensioners groups, which are due to be heard on 7 February.
Whoever the Government are and however the architecture ends up, there should be distance between the Government and issues such as investment policy. I do not think that the Government should be in the business dealing with that sort of thing; they should be in the business of minimising as far as possible the
Let me move on. A cluster of amendments have been fomented, encouraged and supplied by Which?, formerly the Consumers Association, and have its seal of good housekeeping. The hon. Member for Yeovil occupies an interesting parallel dimension, because in most if not all cases, his amendments are identical to mine. I take it as praise indeed.
The first set of amendments includes amendment No. 8, which is ours, and amendment No. 41, which is the hon. Gentlemans. Amendment No. 8 would put lay in schedule 6. Its purpose is to ensure that all chairs do not have any perceived conflict of interest with regard to the financial services industry, and that they look after the interests and represent the views of scheme members and of prospective scheme members. It is a probing amendment. Lay is a difficult word, and some definitions in other legislation are not directly comparable. However, it is important that the Minister understands our drift. The theme of many of the twinned amendments is to ensure that the interests of consumers and of potential consumers are at the heart of the way in which the authority undertakes its business.
Likewise, amendments Nos. 9 and 42 are again Conservative and Liberal Democrat. The Bill does not state that there should be mandatory consumer representation on the delivery authority. Which? is keen to ensure that there is a focus on the best deal for scheme members and for prospective scheme members. The amendments call for two mandatory non-executive consumer directors who would be recognised in a professional capacity by those stakeholder consumer groups that have an active interest in the subject. Which? has been energetic in attending many of those marvellous seminars, discussing with usand, I am sure, other partiesits concerns as time has gone on. Emma Higginson, in particular, has been extremely helpful in briefing on the concerns that it and its members have.
Which? takes the view, and I am sure that there is a lot in what it says, that
consumer representation is fundamental if trust and confidence in personal accounts is to be upheld.
It has carried out its own research. Which? has consistently demonstrated that consumers trust an independent board to administer their pensions. They want directors who will provide expertise and knowledge of consumer issues, who will represent the diverse needs and aspirations of consumers, and who will ensure that mis-selling scandals are avoided.
Amendment No. 11, and amendment No. 44 tabled by the hon. Member for Yeovil, would require the Secretary of State to consult such organisations as appear to him to represent the interests of consumers before appointing or approving the appointment of any member representing the interests of consumers. It is important that the Secretary of States definition of a
Amendments Nos. 14 and 45 say that the authority must establish a committee. There is provision for setting up any number of committees under the delivery authority, but there should be a committee for the purpose of representing the interests of scheme members and of prospective scheme members. Again, a consumer committee could serve as a sounding board for personal accounts issues, and for policy decisions in particular, given the impact that they will have on the consumer. A committee would provide extra scrutiny and advice to ensure the direct involvement of key representatives and stakeholders, and, I hope, to improve the quality of decision making. Amendment No. 10 is a consequential amendment.
Amendment No. 12 is, I hope, reasonably clear in its intention. It specifies that before appointing any member of the authority the Secretary of State must conduct an open recruitment competition inviting applications from individuals with the relevant qualifications, consult organisations representing key groups of stakeholders and
have regard to the desirability of appointing a group of members whose expertise collectively spans all aspects of occupational and personal pension provision and financial marketing.
Those last three words are important for reasons that I have already mentioned. Whoever takes on this job must have a marketing background or at least have people around them who do. Ultimately personal accounts may stand or fall on the success of the marketing campaign and therefore that is a particularly important provision in this Bill. The National Association of Pension Funds has indicated its support for amendment No. 12. It says that it wants to see members with the relevant experience and knowledge, particularly of occupational pensions. We agree with that.
We want to tease out from the Minister the kind of people he has in mind. What kind of people will or are being recruited? I hope that he can share with us the extent to which the Government are already seeking recruits for these positions. There is always this slightly delicate issue of what a Government can do before a piece of legislation receives Royal Assent. I seem to remember that on the 2004 Act there was a bit of an up and downer about hiring the head of the Pension Protection Fund before the Bill had gone through all its stages. I do not want to get too formal about it, but it behoves the Minister to tell us what is happening. Has the Secretary of State appointed a firm of headhunters to beat the bushes in the financial services and other sectors? If so, what criteria are being given to the headhunters in that search? It is only fair that the Committee be put in the picture.
Amendment No. 13 states:
The Secretary of State shall have regard to the desirability of recruiting a group of members so that there is a balance as the Secretary of State considers appropriate between(a) members with knowledge and experience of consumers pension needs; (b) members with knowledge and experience of employers
I would hope, again on the basis of this probing amendment, that the Minister will feel able to say that these are all criteria that he is already operating. That would be very reassuring. I can almost hear his argument coming that these are not matters that should be on the face of the Bill. But in the light of reasonable assurances from the Minister, I am sure that we can come to some accommodation on that.
Amendment No. 15 is to schedule 6. It relates to paragraph 2(6) about conflicts of interest, which reads:
In this paragraph and paragraph 3 conflict of interest, in relation to a person, means a financial or other interest which is likely to affect prejudicially the discharge by him of his functions as a member of the Authority.
It would obviously be wrong if someone with a clear financial interest was involved because there would be a conflict of interest. But what wealth of potential problems is contained in the otherwise innocent words or other? What kind of situation or conflict do the Government have in mind? Would the Minister mind sharing that with us?
On amendment No. 82
Mr. Laws: Does the hon. Gentleman agree that amendment No. 82 removes a paragraph that allows the Secretary of State to pay pensions, allowances or gratuities to the chairman and the non-executive members of the authority at his discretion?
Mr. Waterson: That is a helpful intervention for which I am most grateful, and the hon. Gentleman is right. This is a probing amendment, because I am a bit puzzled as to why the delivery authority, which will have a short existence, should be in the business of paying pensions, allowances or gratuitiesI do not know what that would mean. Would the members be given a couple of quid in their hands for turning up to a meeting? Paragraph 4(1) reasonably makes it clear that they should get remuneration and allowances. That is perfectly proper and is to be expected. However, I am not entirely convinced about where pensions, allowances and gratuities would come in.
Amendment No. 14 exactly parallels amendment No. 45 from the Liberal Democrats. That, I understand; it is about representing the interests of scheme members in a committee.
I think that the last issue that I need to deal with in this group is new clause 5, which concerns freedom of information. The Personal Accounts Delivery Authority will be subject to the Freedom of Information Act 2000, but the Act exempts information relating to the formulation of Government policy and the free and frank provision of advice. Those provisions are intended to protect the confidentiality of advice given by officials to Ministers and internal discussions within Government. However, we would want to underline the fact that the delivery authority will be independent from Government, not part of it, and I am sure that the Minister will be eager to say that, too. We are supported by the Association of British Insurers, among others, in thinking that it is important to make it clear that the advice tendered by the delivery authority about the best way to run personal
Although I am always open to criticisms of my drafting, I think that the new clause achieves that purpose. It is designed to ensure that members of the public and others are able to make applications under the 2000 Act in respect of the delivery authority, and that there will not be any bar to that on the basis set out in the clause.
I hope that I have dealt adequately with the new clause and all the amendments, even those that were not tabled by my party, and I hope that there is something in there that the Minister might accept.
The Chairman: I have no desire to curtail the right of any hon. Member to make whatever in-order comment he or she wishes. However, it has not escaped my notice that the provenance of some of the amendments seems to be remarkably similar. It is therefore likely that the arguments might be remarkably similar, so in order to expedite matters I should be grateful if hon. Members would eschew repetition.
Mr. Laws: I am grateful not only for that advice, Mr. Gale, but for the fact that you did not look me directly in the eye when giving it. It is clearly designed for all members of the Committee. I did not, as you know, speak to clause 17 because the passport for that seemed to be having a joke about Calvin Coolidge. As I did not have one, I felt it was not appropriate for me to contribute. However, I agree that these amendments look rather similar. We are discussing a shadow delivery authority and have eight amendments shadowing each otherprobably, I fear, in the wrong direction from my perspective, but arguably so closely that we will not split hairs.
Amendment No. 8, as you rightly say, Mr. Gale, shadows amendment No. 41, amendment No. 9 shadows amendment No. 42, amendment no. 11 shadows amendment no. 44 and amendment No. 14 shadows amendment No. 45. They all come from Which? so the hon. Member for Eastbourne and I will be happy for it to have the full credit for them. It is quite right to say that I have, essentially, been able to contract out the selling of these fine amendments to the hon. Gentleman, who has done a magnificent job in setting them out.
All I really need add, then, is that these amendments clearly demonstrate the importance of this body having consumer interests at its heart and not just being a sort of industry-Government fix. I need add nothing else.
James Purnell: Now there is a practice that we should continue in future, Mr. Gale; but I do not want to give you advice, as I am surely not allowed to do so. I am tempted to agree with the spirit behind all these amendments, and leave it at that. We do, however, have a disagreement of substance on the one about freedom of information, so I shall come to that. Yet people would feel short-changed if we did not set out, on the record, a little response to the desire for our thinking to be teased out. So, I will go through the amendments as requested.
First, when the delivery authority takes on its next incarnationif Parliament is willing to give us another Bill next yearthen it will, we hope, move from being an advisory body to a genuine delivery authority. At that stage it will be important for this House to make it clear that the delivery authority should have genuine independenceboth on investments and operationallyand the ability to recruit the skills that it needs. Personally, I think that an important point within that will be for us to establish clearly that it should make investment decisions on behalf of its members and with their interests at heart, rather than under political direction. That will be an important precedent to set.
However, that is not the delivery authority that we are discussing today. As I said earlier, the one under discussion is one that is advising the Secretary of State on the proposals that he will be making. So, the bedrock of parliamentary accountability hereand the answer to the questions set out by the hon. Member for Eastbourne at the start of his speechis that it will not be going off to make a whole bunch of decisions for which Parliament cannot hold it to account. It will be advising the Secretary of State, whom Parliament can hold accountable during this period of its operation in exactly the normal way.
On the detail of process in the amendments, I also want to echo what has been said about Which? and the important role that it has played throughout the process of developing these policies, while representing in particular the interests of consumers and members. Which? has much influenced our proposals, and all parties have welcomed that. Its central pointthat members and consumers should be absolutely at the heart of personal accountsis right, and we indeed intend to reflect that in our proposals following the White Paper that we published in December.
An open question in the White Paper asks people to come forward with suggestions on how members should be represented, involved and consulted. We have a genuinely clear and open mind on that area, and are keen to have suggestions; we look forward to what the Work and Pensions Committee says on that as well. In making personal accounts work, it will be important both that the criterion for the authoritys decision making is clearly established to be the interests of its membersas it is their pensions that we are talking aboutand that the members themselves feel confident that they have appropriate representation and influence over the decisions being made on their behalf.
We will be discussing those items in the light of the response that we get to our consultation, which bore in mind the work of the Work and Pensions Committee. We will publish our response to that Committee, which hon. Members will have a chance to scrutinise over the next few months. Those are the general issues that we will be able to discuss, but the amendments that we are talking about todayto which I now want to turnare much more specific.
Clause 18 establishes a Personal Accounts Delivery Authority, which we want to give independent advice to Government while using the professional expertise and knowledge that exist in the private sector. The establishment of such an authority has generally been welcomed by stakeholders, both those in financial services and representatives of consumers and trade
Schedule 6 covers the membership, proceedings and organisational parameters within which the delivery authority must operate. We envisage the authority operating on the basis of a small board, with executive and non-executive members, supported by staff and specialist committees. Initially, under the provisions set out in the Bill, the delivery authority will provide advice, supporting the Government in understanding the operational and commercial implications of policy options. It will also advise on the design of the commercial strategy, including the financial, technical and commercial analysis needed for policy development. That is the general approach. I will now turn to specific amendments.
On Crown immunity, I understand that the intention of the hon. Member for Eastbourne is not to give the organisation Crown immunity, but to test whether we believe that it should be subject to judicial procedures in the normal way, as any organisation advising on policy in this way should be. That is our intention. If he wanted to press his amendment, we would resist, but I hope that gives him the comfort that he wants. If people feel that they need judicial recourse against the authority, they will be able to resort to it in the normal way.
Mr. Waterson: I do not want to labour the point, but it seems odd to envisage legal claims against the delivery authority rather than the board in due course. I wonder what kind of claims the Minister envisages being made. Is any provision made for possible claims in the amount set out in the regulatory impact assessment, which is £21 million for the delivery authority up to the second Bill being dealt with by Parliament?
James Purnell: If people wanted judicial recourse against the authority, they would sue the Secretary of State in the normal way. They would have judicial review of the Secretary of State. I hope that that gives the hon. Gentleman the assurance that he wants. If there was a feeling that the authority had acted in a way that needed judicial review, that would be possible.
Mr. Waterson: So, I assume that in due course the board would have a different set-up? That body, once it is up and running, is envisaged as the one to be sued, rather than the Secretary of State.
James Purnell: That is absolutely right. In the authoritys next incarnation, when not giving advice but actually making proposals, then it would obviously be subject to normal judicial review and other legal proceedings.
On freedom of information, I am just not sure that I agree with the hon. Gentleman. I can see the desire for transparency. However, in the same way as civil servants give advice to Ministers, which they would sometimes not be comfortable having in the public domain, so is the role of the delivery authority in giving advice to the Secretary of State, where the analogy would apply as well.
There are some side effects of his amendment that I think the hon. Gentleman would not want, such as anybody applying for an interview being able to ask for the questions that they were going to be asked in advance, or so I am told. Apparently anyone wanting to get into the authoritys IT system could ask for the passwords. I know that that is not the amendments intention. On the basis of wanting effective policy-making at this stage it would be better for the Freedom of Information Act to apply to Departments, as it does now. That is why we will resist the amendment if the hon. Gentleman divides the Committee on the proposal. We do not propose to exempt the authority from protection for policy and advice because it would not be conducive to their giving frank and impartial guidance, which is exactly why Parliament put those provisions into the Freedom of Information Act in the first place.
On amendments Nos. 12 and 13, I reassure the hon. Gentleman and the hon. Member for Yeovil that as with all other public bodies, when appointing non-executives we are required to follow the code of practice of the Office of the Commissioner for Public Appointments for ministerial appointments to public bodies, which is a guide to the steps that must be followed to ensure a fair, open and transparent appointments process. Independent scrutiny is a mandatory element of the process and no appointment may be made unless an independent assessor has been involved. In appointing initial executive members we will follow an open and transparent process that follows best practice and standard employment procedures.
The hon. Member for Eastbourne wanted to know whether we had started recruiting. I can tell him that we engaged headhunters on Monday and we plan to start the recruitment process in February. If he knows of anyone who may want to apply, he can refer them to a firm called Egon Zehnder. I hope that that gives the hon. Gentleman the information that he wanted.
Two questions arise from what the Minister said: first, will he share with the Committee the job descriptions of the positions of chairman and chief executive that he has given to Egon Zehnder, a reputable and well-known firm in the field? Secondly, what is the Cabinet Office or other rule about recruiting people and spending money when the Bill has barely scratched the surface of its parliamentary process? These people do not work for charitable purposes.
James Purnell: I think the rule is that the process can start after Second Reading. We will be careful to follow the application procedure in keeping with Cabinet Office and Treasury guidance on the spending of public money under this Bill.
The hon. Gentleman asked whether we would want specific marketing expertise and we are happy to discuss that with him and with stakeholders.
James Purnell: I probably have. [Interruption.] We are happy to share that with the hon. Gentleman. We want to discuss it with our headhunters first, as their expertise is in formulating all that. If the hon. Gentleman wants to make any suggestions we will be happy to consider them and we will happily commit to sharing the job description with him. The process can begin after Second Reading but the appointment will be after Royal Assent.
We did not envisage requiring marketing expertise to be specified in legislation. It will be for the chairman and the chief executive to decide the expertise that they want on that issue. However, we do not want to put that in the Bill, as we want a nimble organisation that can be flexible in deciding whom it recruits.
As I was saying, independent scrutiny will be a mandatory element in the process and no appointment will be made without an independent assessor. We recognise the importance of ensuring that the board contains individuals with a breadth of knowledge and experience from a range of backgrounds. At the initial stage of delivery, it will be small, so it will be particularly important to ensure that we have the right skills and expertise in place.
Amendments Nos. 8, 9, 10, 11, 41, 42, 44, 14 and 45 relate to the important issue of consumer representation. The principle that consumer involvement and expertise is vital to the work of the delivery authority is recognised by all parties. However, at this stage I am wary of starting to mandate individuals on boards to represent individual stakeholder groups. We might end up with stakeholders in the financial services industry, stakeholders among employers providing schemes and stakeholders in trade unions, and we would be in danger of creating the sense that certain people on the board had responsibility for one particular section or interest rather than for the effectiveness of personal accounts as a whole. Like the BBC and Ofcom, which do not have people representing specific interests, we want the board as a whole to be responsible for the whole success of personal accounts. That means representing consumers and performing the other duties that, initially, the personal accounts board and the delivery authority will have.
While supporting the principle that consumers and people with expertise in consumer issues should have appropriate involvement in personal accounts, we are reluctant to legislate specifically for that.
Mr. Laws: Has the Minister had a chance to meet the most prominent consumer organisations to think about how he might satisfy their concerns within the context of those reservations? Would he be willing to do so if they wished to take him up on it before the measure is taken further?
James Purnell: We met with them a number of times in the run-up to publication of the White Paper, and will be happy to do so again. In fact, we had one running meetingthe Division bell rang half way through and we continued it while running to the Division Lobby. The issue is not new, and the views of
As for the calls for a lay chair, all members of the delivery authority board will be expected to act in the interests of all prospective scheme members in performing their roles. That duty will apply to everyone. Given that we are trying to create an organisation with a relatively small board, we do not want to specify backgrounds that would not be suitable for particular jobs. We recognise that those interests will have to be taken into account, and that people with expertise in those issues will have to be involved in personal accounts, but we may come to regret disqualifying anybody with a financial services background from chairing the authority if the best person to do so happens to have that background. In that, we disagree with the thrust of the amendment. We want the delivery authority to have the flexibility to recruit the best people for the job, and we do not want to tie their hands. With that, I shall move on from consumer representation, unless hon. Members have any burning issues to raise.
Amendment No.15 relates to conflict of interest. There is nothing hugely mysterious about it. Most conflicts of interest would be financial, but it possible to envisage a conflict of interest that was not directly financial. For example, a member of someones family might run a company that could be affected by the introduction of personal accounts, or there might be other non-financial conflicts of interest. The only reason for having the words and other interests is to give the Secretary of State the flexibility to deal with any potential non-financial conflicts, having regard to legal advice as necessary.
As for amendment No. 82, again there is no great mystery here. We are replicating the financial remuneration framework that applies to non-departmental public bodies, which gives the Secretary of State, should he so determine, the flexibility to pay or make provision for payment of pensions, allowances or gratuities to non-executive members or their dependants, survivors, spouses or children. There is nothing new about that; that is how we remunerate people generally, and we will consider the exact remuneration package at a later stage.
I hope that I have given the hon. Member for Eastbourne the information that he wanted, and that I have dealt with all the amendments that we are discussing with the clause. I thank hon. Members for tabling the amendments; it is important that we have had a chance to discuss them, and I hope that we have been able to allay any concerns. As I say, we support the general thrust behind most of the amendments. We want hon. Members involved at the very heart of personal accounts; their support and confidence in the organisation will be central to making it a success. They have asked genuinely open-minded questions about how that should be done in the next phase of personal accounts. In this phase there will be a nimble, small body that gives us advice based on the best financial, consumer and other expertise. I urge hon. Members to withdraw their amendments.
Mr. Waterson: I am grateful to the Minister for going through all the amendments in such detail. Let me try to pick up some of those points as briefly as I am able, given the size of the group of amendmentsthe largest group that the Committee has considered so far.
I am grateful for the clarification on Crown immunity. I was genuinely puzzled by that, and I am now clear that the legal situation in terms of the claims of the delivery authority will be quite different from that of the board in due course. It is important that there is in due course a separation between the body that is delivering personal accounts in the long term and the Government of the day.
I am disappointed by the Ministers reaction on freedom of information. I suppose that all Ministers develop in that way eventually, and it is rather upsetting to see this Minister, who is so young, succumbing to what the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) calls ministeritis in his excellent book, How to be a Minister, the third edition of which has just come out and which I commend to the Minister. Again, this is not just some mad Tory obsession, or even a mad Liberal Democrat obsession. It is a point initially raised by the Association of British Insurers, which has a legitimate interest on behalf of its many members. In a way, it suggests to me that the Government are now stepping back.
We have all immensely enjoyed the succession of seminars, where there has been cross-fertilisation between Ministers, officials, the industry and others. It seems as if we are now going to take a step backwards. Given that the body will be primarily delivering advice to Ministers about the future shape of personal accounts, I cannot believe that it can claim a monopoly of wisdom, expertise and experience in those matters. I think that it is important that bodies such as the ABI and its members, and many others such as Which? or any body with an interest, should have access to the documents. As for the ludicrous examples givenwith due respect to the MinisterI do not know whether he has ever tried to make a freedom of information application under this Government, but the notion that someone going for an interview could get the questions in advance by putting in a freedom of information application is just risible. I forget what the other example was.
Mr. Waterson: Yes, gaining access to the IT system. I am sure that some exclusion can be crafted to put the Minister at ease on that. All that we are talking about is people with a legitimate interest and genuine expertise and knowledge of these matters having access to the advice tendered to Ministers. My intentionI am not quite sure where it comes in our deliberations, Mr. Galeis to press new clause 5 to a vote. I urge Opposition Members to join me on that.
James Purnell: I give the hon. Gentleman an assurance that we want the authority to be open and consultative in everything that it does. There may well be occasions when it wants to give advice in confidence. I am sure that he can imagine circumstances in which it would want to do that. That is why we think that freedom of information should apply to this body in the same way that it applies to other Government bodies.
Mr. Waterson: I see that. I do not suggest that this is the beginning of some slippery slope to a police state, any more than we have one at the moment but without the police, but there is a genuine issue here. I hope that whoever runs this body will have the good sense to meet regularly with us. If consensus is to mean anything, it needs to be a continuing process. I regard the position on freedom of information as being counter consensual in that sense.
I hope that we can get round that by having regular meetings with this bod or bods who will tell us their troubles. We do not want to sweep into office in two or three years time to find that they have been advising Ministers that this whole thing is doomed to fail miserably. We will keep coming to the seminars, because we are sad people with nothing else to do, but also because they can be quite interesting. But I urge the Minister to reconsider that point.
I am grateful for the Ministers openness on the appointment procedures. I am delighted to hear that he has Egon Zehnder on the case. I shall be interested to see what comes from his discussions with that firm. I assume that the usual rules about political affiliation will be observed. I was grateful for his confirmation that the appointment can be made only after Royal Assent. I suppose that any money can be spent only then too. I hope that Egon Zehnder is aware of that.
There is a serious point about marketing experience. David Norgrove or Laurence Churchill are both excellent and incredibly able and competent men, but a different animal is needed here. I am not suggesting PY Gerbeau, but we are looking for someone with a bit of pizzazz and salesmanship and a marketing strength which is not required in something like the Pension Protection Fund, which in effect has a captive audience. That is the point that I was trying to make, if I can put it in a nutshell.
I think that I am happy with the Ministers assurances about consumer representation. He clearly stated that
I mentioned earlier the £21 million which, according to the RIA, has been budgeted for the delivery authority between now and the next Bill. I should have done so earlier, but let me say that I shall be immensely grateful if the Minister will write to us with a breakdown of how that figure was reached.
I was satisfied by what the Minister had to say on conflict of interesthe confirmed what he had had in mind. However, as he says, the great bulk of such potential cases would be based on a financial conflict of interest.
I am happy not to pursue any of the amendments tabled in my name; of course, I cannot speak for the Liberal Democrats. However, I would like to vote at the appropriate moment on new clause 5.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 ordered to stand part of the Bill.
The Chairman: We have had the substantive debate on the principle behind schedule 6, but we are yet to debate two groups of amendments to it.
Further consideration adjourned.[Mr. Heppell.]
Adjourned accordingly at sixteen minutes past Three oclock till Tuesday 6 February at half-past Ten oclock.
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