Clause
20
Management
of the
authority
Mr.
Waterson:
I beg to move amendment No. 79, in
clause 20, page 21, line 36, leave
out ‘the Authority thinks appropriate’ and insert
‘shall be specified in
regulations’.
The
Chairman:
With this it will be convenient to discuss
amendment No. 80, in clause 20, page 21, line 38, leave out subsection
(2).
Mr.
Waterson:
This is a short, pithy clause, but it does not
give much away. It is about how the authority is going to manage itself
during its short life. Amendment No. 79 would take out the words
‘the Authority thinks appropriate’ and
insert
“shall be
specified in regulations”.
There is a general point to be made here.
In his rather chirpy letter at the beginning of the Committee stage,
the Minister talked about producing draft regulations during the
Committee stage. Unless I have missed them, I have not seen any, and it
would be interesting to know whether we shall see any such regulations
for any clause of the Bill before we finish on Thursday this
week.
We think that
the wording should be made a bit clearer and more obvious. We have said
that regulation would be one way of dealing with what the general
guidance might be. It seems that the authority would be able to pick
and choose, as it thinks appropriate according to the way that the
clause is worded, what general guidance it will be subject to and what
not.
The second part
of that subsection talks about generally accepted principles of good
corporate governance, and who can argue with that? However, we then
have subsection (2), which we would remove in its entirety by means of
amendment No. 80, and which qualifies even that expression. So there is
that obligation to follow “good corporate governance”
principles, but that obligation is
“subject to guidance falling
within subsection (1)(a),
and”—
this is the
really interesting bit, Mr.
Gale—
“applies
only to the extent that the principles in question may reasonably be
regarded as applicable in relation to a statutory
corporation.”
Even if I
were not a lawyer, I think that I would recognise a wholly circular
argument when I saw one, and I shall be grateful if the Minister will
try to explain to us precisely what that gobbledegook means, or whether
he agrees with me that we could do a certain amount of judicious
pruning of clause 20.
James
Purnell:
I shall try to reassure the hon.
Gentleman. We are trying to replicate the arrangements that have been
made for other bodies such as the Office of the Commissioner for Public
Appointments, a precedent that he helpfully cited earlier. It is normal
in legislation to ask an organisation to have regard both to general
principles of good governance—the Higgs report and so
on—and to specific guidance set out by Government. The piece of
gobbledegook, as the hon. Gentleman called it, is intended to state
that where governmental guidance conflicts with corporate governance
guidance or sets a higher standard of behaviour, the authority should
follow the rules appropriate to non-departmental public bodies rather
than the softer test of good corporate practice. I hope that that gives
the hon. Gentleman the reassurance that he
wants.
The general
guidance in question is the extensive guidance issued by the Cabinet
Office, the Treasury and the OCPA, which is intended to cover all
eventualities for every type of public body. Principles of good
corporate governance, on the other hand, include those outlined in the
Financial Reporting Council’s combined code, which is based on
the Higgs report. It is aimed more widely to include private sector
organisations. Both sets of guidance outline extensive standards and
practices, many of which will be appropriate to the delivery
authority.
As I have
said, in some instances the principles of good corporate governance are
less strict than the guidance specifically for public bodies. An
example that comes to mind is the recruitment process for members of
the board. I understand that the combined code states that in certain
circumstances there need be no external publication of vacancies,
whereas the OCPA’s code of practice requires all vacancies to be
advertised externally. The clause sets out the fact that the board will
have to obey the stricter test rather than the more general one of good
corporate
governance.
Putting
the general guidelines into regulations would achieve nothing more than
the clause as it stands. Additionally, whenever the guidance was
changed we would have to haul the hon. Member for Eastbourne up to a
Committee Room and pass more regulations, which he would be able to
debate. That might give him a different incentive from that which it
gives the hon. Member for Yeovil, but I argue that it is not necessary.
I hope that I have reassured him that there is a proper control
framework, and that he will not press the
amendments.
Mr.
Waterson:
I am most grateful. I am completely
reassured—I am reassured out, in fact. I do not know why I had
the temerity to table the amendments in the first place. I beg to ask
leave to withdraw the
amendment.
Amendment,
by leave,
withdrawn.
Clause
20 ordered to stand part of the
Bill.
Clause
21
Winding
up of the
Authority
Question
proposed, That the clause stand part of the
Bill.
The
Chairman:
With this it will be convenient to discuss new
clause 4— Winding up of Personal Accounts Delivery
Authority—
‘The
Authority shall be wound up as soon as the chairman has certified that
the Authority has completed the task of setting up the structure for
administering personal accounts, and in any event no later than April
2012, and the criteria for such certification shall be specified in
regulations.’.
12.45
pm
Mr.
Waterson:
I wish to raise a specific matter on new clause
4, and some interesting issues arise from the mere existence of clause
21. I shall turn to them in a
moment.
New clause 4
is, in a sense, the stake through heart of the delivery authority. It
may be overkill, which I am sure is what the Minister will say. It is
intended to ensure that there will be a moment when the delivery
authority stops and the board starts. I have made the point in other
contexts that we want to be sure that the delivery authority will not
slowly morph into the personal accounts board. The two bodies must
tackle distinct issues, different skill sets are needed and they will
have completely different roles. One will produce advice and consider
the whole design of the scheme and how it will be set up, and the other
will be in the business of running it capably and efficiently and
meeting the criteria that will presumably be stamped in the next Bill.
That was what we wished to deal with in amendment No.
21.
This is to make it
absolutely clear that the delivery authority will be wound up as soon
as its task has been performed, and no later than April 2012 in any
event. Prior to that, the chairman can certify that it has completed
its task and its role is at an end. That was in new clause 4.
Clause 21 is interesting in
that it is based on meeting the condition in subsection (3), which is
that
“as a result of the
abandonment or modification of any relevant proposals about personal
accounts, it appears to the Secretary of State that it is no longer
necessary for the Authority to continue to
exist.”
That has the feel
of some serious cold feet on the part of the Department. To go to such
lengths in a long clause to ensure that the concept of personal
accounts can be abandoned at some point in the
future—[Interruption.] It is a very important clause. I
am keen to draw out from the Minister why the Government are being so
ultra-cautious.
To
push the issue of consensus drivers back to the Minister, it is
important that we should all try to present an image of confidence and
enthusiasm about the future of personal accounts if we are to
engagethe target audience—or even the vast majority of
the population, as the Government now seem to be doing—in them.
What have they in mind in using the words abandonment or modification?
It would have to be a pretty significant modification to require the
winding up of the delivery authority. Do they intend that it should be
taken over by some other body? Is it another example of the
Treasury’s final control over whether this goes ahead? There
have been rumours for some time that the current Chancellor is less
than enthusiastic about personal accounts and might take a different
line as and when he becomes Prime Minister. I do not expect the
Minister to comment on that, but it is
important that he tell the Committee what the concerns are. Which issues
created the lack of confidence that produced subsection
(3)?
James
Purnell:
The hon. Gentleman really does not need to worry.
The subsection is there only out of respect for the Opposition, in that
they might not support the personal accounts Bill that we are hoping to
introduce. If that Bill did not command the support of Parliament, we
would need to wind up the delivery authority, so this represents
prudence. We are not taking Parliament for granted—which, as he
knows, we do not like to do—but are including the measure so
that we will not have to legislate again in order to get rid of the
delivery authority.
I
do not know whether that gives the hon. Gentleman sufficient
reassurance. He also made a more general point about the phasing of the
delivery authority. He and I might have slightly different views about
how the process will work, so let me set out how we see it. The first
of the three stages will be the advisory delivery authority, the second
will be for it to have the power of executive authority over certain
matters to be described and decided in the next Bill, and then we will
go over to the personal accounts board. As we said in the White Paper,
we do not plan to wind up the delivery authority until its job is done.
There might be some overlap between the authority and the personal
accounts board. It would be sensible to expect a large degree of
continuity between the delivery authority and the personal accounts
board. That does not mean that everybody who works for the authority
would work for the board, as different skills might be needed, but we
are keen to maintain the expertise of the authority during the
transition to the board. That might give it a good incentive to provide
us with
advice.
Mr.
Waterson:
I can see the argument for some overlap. After
the previous legislation, however, I remember that people who worked
for the old pensions regulator and moved to the new regulator found
that a different culture had been introduced through the 2004 Act. Does
the Minister envisage that employees of the new authority will be
TUPE’d across to the board? In the instance to which I just
referred, there were concerns about people who had worked for the old
regulator having an approach that was different from what was needed
for the new, more aggressive
regulator.
James
Purnell:
I think that that issue will be addressed on a
case-by-case basis, but there should be some continuity between the
authority and the board. We will have plenty of opportunity to debate
the arrangement as part of the next Bill that we hope for.
I hope that I have set out the
three stages that we expect. It is important that the Secretary of
State should wind up the authority, rather than the chairman having the
power to wind it up, as we are not sure that that would be the right
approach. I hope that that gives the hon. Gentleman the comfort that he
needs on that
amendment.
Mr.
Waterson:
I am comforted by that.
Question put and agreed
to.
Clause 21
ordered to stand part of the
Bill.
Clauses
22 and 23 ordered to stand part of the
Bill.
Clause
24
Consequential
etc. provision, repeals and
revocations
Amendment
made: No. 56, in clause 24, page 23,line 25, leave out
subsection (3) and
insert—
‘(3) The following
repeals have effect at the end of the period of 2 months beginning with
the day on which this Act is
passed—
(a) the repeals
in Part 2 of Schedule 7 of the provisions of the Pensions Act 1995
(c. 26) other than paragraphs 19 and 20 of Schedule 4 to that
Act;
(b) the repeal in Part 2
of Schedule 7 of paragraph 36 of Schedule 24 to the Civil Partnership
Act 2004 (c. 33);
(c)
the repeals in Part 3A of Schedule 7.’.—[James
Purnell.]
Clause
24, as amended, ordered to stand part of the
Bill.
Schedule
7
Repeals
and
revocations
Amendment
made: No. 60, in schedule 7, page 66, line 8, at end
insert—
‘Part
3A Additional pension: simplified accrual
rates
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Social
Security Contributions and Benefits
Act 1992
(c. 4)
|
In
section 39— (a) the words “and
Schedule 4A” wherever
occurring; (b) subsection
(3).
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In
Schedule 4A, in paragraph 1(2)
“39(1),”.
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Child
Support, Pensions and Social Security
Act 2000
(c. 19)
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Section
35(3).’.
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—[James
Purnell.]
Schedule
7, as amended, agreed
to.
Clauses 25
to 29 ordered to stand part of the
Bill.
Further
consideration adjourned.—[Mr.
Heppell.]
Adjourned
accordingly at six minutes to One o’clock till this day at Four
o’clock.
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