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Earl Howe: My Lords, the noble Lord refers to Elizabeth I and Sir Francis Drake. But his memory is rather short. As he well knows, the industry itself has been pressing us to increase the funds available for decommissioning. Noble Lords from all sides of the House pressed me on that point during the passage of the Sea Fish (Conservation Act) 1992. The key point is that, with more decommissioning money and therefore fewer vessels, the remaining fleet will be more competitive. That will help to ensure the long-term

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efficiency and viability of our industry. It is important that those measures are enforced. We believe that adequate arrangements will be in place to do just that.

Lord Wyatt of Weeford: My Lords, is the Minister aware that the Spaniards wrecked their own fishing grounds by cheating on their quotas and propose to do exactly the same in this country? A few Royal Naval vessels will be unable to prevent them. Therefore will he advise the Government to turn a Nelsonian blind eye to the Devon and Cornish fishermen as they seek to sink the larger Spanish ships—which they will succeed in so doing if they are not interfered with?

Earl Howe: My Lords, I share the noble Lord's concern to see the arrangements fairly implemented. There are two important safeguards for effective enforcement. At the December Fisheries Council it was agreed that additional control measures should be adopted for western waters. Those include provisions which will require vessels entering and leaving defined areas, including the Irish Box, to hail in and out to the coastal state as well as to their own flag state. That procedure will enable us to keep track of Spanish fishing activity in our waters. In addition to that, the location of fishing vessels in western waters will be monitored through aerial surveillance. That is a very effective means of identifying what vessels are in a given area at any one time.

Viscount Mountgarret: My Lords, is my noble friend at all worried at the thought of one possible scenario: if the Cornish fishermen took action to repel the forthcoming Spanish armada, members of the Royal Navy might be asked to turn on their own countrymen?

Earl Howe: My Lords, we very much hope that that situation will not arise. I do not believe that it will because we have undertaken to ensure that enforcement is adequate. The rules must be implemented fairly for all member states in western waters.

Lord Carter: My Lords, the Spanish fleet now has access to parts of the Irish Box and, thanks to swops with France and Belgium, it has access to several new fishing areas. How does that all square with the statement by the Minister of State, Mr. Michael Jack, and his department in October 1993 that Spanish and Portuguese fishing vessels should be confined as closely as possible to their historic fishing patterns and should have no access to the Irish Box?

Earl Howe: My Lords, there are several key points which I welcome the chance to put on the record. Nothing in the agreed deal causes British fishermen to lose quotas. Our fishermen continue to have far more quotas in western waters than the Spanish do. The aggregate catch available to member states in western waters will be no greater from next year than it is at the moment. All that will change is that the Spanish will fish with a part of their fleet over a somewhat wider area than they do at present.

Lord Bruce of Donington: My Lords, the noble Earl spoke of quotas. Is he aware that as regards the United Kingdom there are 52 inspectors available at all the

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local British ports—they do their job thoroughly—whereas in the case of Spain there are only 12 inspectors who are quartered not at the ports but in Madrid?

Earl Howe: My Lords, the noble Lord is a little out of date. There are 49 inspectors in Madrid and we understand that the number will rise to 65. Enforcement in Spain amounts to more than people just sitting in Madrid. It consists of officials from the various regional governments and maritime authorities and coastguards as well.

Lord Geddes: My Lords, in his original Answer to my noble friend Lord Caldecote the Minister referred to there being nine vessels available. But am I right in thinking that in his supplementary answer he then alluded to a possible increase in those nine? Can he expand on that?

Earl Howe: My Lords, I cannot expand on that at the moment. We are trying to assess how many more vessels, if any, will be required. We have just under a year in which to do that and I am sure that if we decide that more vessels are required they will be brought in.

Lord Cledwyn of Penrhos: My Lords, can the noble Earl say how far south British vessels are allowed to go on the present understanding? Are they allowed to fish in the whole of the Bay of Biscay?

Earl Howe: My Lords, in relation to the Irish Box, UK vessels already have unlimited access, subject to the quotas in each individual area. I should need advice on the Bay of Biscay.

Sexual Offences (Amendment) Bill [H.L.]

3.3 p.m.

Lord Hylton: My Lords, I beg to introduce a Bill to extend the jurisdiction of United Kingdom courts to try sexual offences against children committed overseas. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Hylton.)

On Question, Bill read a first time, and to be printed.

London Local Authorities (No. 2) Bill [H.L.]

Read a third time, and passed, and sent to the Commons.

Business of the House: Motions, 9th February

The Lord Privy Seal (Viscount Cranborne): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That Standing Order 38 (Arrangement of the Order Paper) be dispensed with on Thursday 9th February to enable the Motion standing in the name of the Lord Swinfen to be taken before the Motions standing in the name of the Lord Mackay of Ardbrecknish.—(Viscount Cranborne.)

On Question, Motion agreed to.

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Central European Time Bill [H.L.]

Viscount Mountgarret: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.—(Viscount Mountgarret.)

On Question, Motion agreed to.

National Health Patient Accommodation Bill [H.L.]

Lord Stoddart of Swindon: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved, That the order of commitment be discharged.—(Lord Stoddart of Swindon.)

On Question, Motion agreed to.

Pensions Bill [H.L.]

3.5 p.m.

Lord Mackay of Ardbrecknish: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Mackay of Ardbrecknish.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

Clause 1 [The new authority]:

Baroness Hollis of Heigham moved Amendment No. 1:


Page 1, line 9, at end insert:
("( ) The Authority shall exercise general supervision over occupational pension schemes and shall in particular—
(a) register schemes, such registration to be a prerequisite of Inland Revenue approval;
(b) monitor schemes, and enforce compliance with legal requirements, including rules relating to trustees, minimum solvency and disclosure;
(c) intervene in scheme administration where the scheme assets appear to the Authority to be in jeopardy;
(d) receive and investigate complaints of impropriety in the management of pension schemes or the composition or conduct of the trustees;
(e) disqualify from acting in the management of an occupational pension scheme those who have shown themselves unfit to act and who are not automatically disqualified under section 24, and maintain a public register of those so disqualified;
(f) in defined circumstances, monitor schemes that are being wound up or require them to be wound up;
(g) give information and advice to the Secretary of State when so requested;

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(h) disseminate information and advice to the public about pension schemes and their administration, pensions legislation and other matters within the scope of the Authority's statutory functions;
(i) issue or approve standards and codes of practice.
( ) In the carrying out of its functions, the Authority must ensure that it—
(a) has made adequate arrangements for the effective monitoring and enforcement of occupational pension schemes' compliance with their statutory obligations;
(b) has made effective arrangements for the investigation of complaints concerning occupational pension schemes; and
(c) is able and willing to promote high standards of integrity and practice in occupational pension schemes.").

The noble Baroness said: The purpose of the Bill is to secure occupational pensions, the funding of pensions and to stop fraud. In other words, it is to deliver, as Goode proposed, the pension promised. To deliver that pension promised, three conditions must be fulfilled: first, that schemes are properly funded; secondly, that schemes are overseen by trustees who are trained, independent and fully representative of all interests, aided by professional advisers; and, thirdly, that they, in turn, are overseen by a regulator.

As we argued at Second Reading, our belief is that the Government have weakened all three planks. They have greatly weakened the solvency of schemes—an issue to which we shall return on the third day of Committee. The Government have, to a degree, weakened the necessary balance of trustees—a theme to which we shall seek to return on the second Committee day. Today's issue is our belief that the Government have substantially weakened the role of the regulator.

Today's amendments cluster around the role, function, membership, funding, powers and liabilities of the regulator. We on these Benches admit without embarrassment that our amendment seeks in almost every case to align the regulator in the Government's Bill with the regulator of the Goode Report—the regulator from which, in our view, the Government have retreated. Virtually all our amendments, therefore, seek to reinstate Goode.

We on these Benches have been criticised for not trying to go even further than Goode for, as The Times newspaper argued, if anything, Goode erred on the side of employers. However, in a phrase which I am sure will echo and re-echo throughout our debates, as regards the regulator we believe that Goode got the balance about right.

What did Goode say? I quote from paragraph 4.19.22 of the Goode Report:


    "A major weakness of the present law governing occupational pension schemes is that there is no statutory authority with overall responsibility for their supervision and for enforcement of the legal responsibilities [governing them] ... The new legal framework we have recommended depends for its effectiveness on proper supervisory and enforcement machinery. We therefore recommend that the Pensions Regulator should have wide-ranging functions and powers".

Quite so, my Lords. Surely, no one can doubt that a strong and effective regulator is crucial, if we are to police abuse, restore confidence in occupational pensions and deliver that pension promise.

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The Maxwell scandal and many others have shown that the traditional combination of trust law, Inland Revenue rules and scraps of social security law all jumbled together have so far not always delivered that promise. So this Bill is about how we regulate, not whether we do. It is not about regulation as against deregulation, but about devising effective regulatory structures that secure the interests of scheme members without overburdening everybody with unnecessary bureaucracy. The regulator is the linchpin. Yet—and this is the purpose of this amendment—we do not yet know what it does. We know that it is a long-stop, able to intervene when things have clearly already gone wrong. But it does not yet have a general responsibility to ensure that things do not go wrong in the first place. The Government's regulator is a fire fighter. The regulator as defined by the Goode Report sought to prevent fires blowing up. That is what we seek to do with this amendment.

The amendment is not out of line with what the Government have done on similar Bills in the past. Other Bills establishing regulatory authorities—for example, the Financial Services Act 1986 and the regulators of the utilities such as gas and electricity—have spelt out in the Bill the power, duties and functions of the regulator. To give an example (and the nearest analogy I can find) Clause 48 of the Financial Services Act 1986 sets out very clearly in 12 subsections the rules and regulations regarding the regulator and the conduct of investment business by authorised persons other than financial bodies. Clause 48 lists 12 prospective rules or duties, precisely as this amendment asks. In other words, this amendment follows the Government's own precedent. It is quite extraordinary that the Government should not have done so in the Bill. The regulator will have to keep thumbing through the Act to see whether he has the power to do something which, as all of us would agree, is self-evidently sensible.

The powers that the Government have specified in the Act are inadequate. There are powers to report to the Secretary of State; to remove and replace trustees; to wind up the schemes; to ensure that employers pay over to trustees the benefits that they have collected from members. In other words, there are powers to deal with the transgressions of statutory duties. But what about other powers—such as a power for the regulator to investigate as he sees fit; to secure research—the substance of a later amendment; to spot check; to issue codes of guidance; or to give advice to the public? It really is extraordinary—is it not?—to set up a new regulatory body, the linchpin of this Bill, without setting out in the Bill the duties and the terms of reference of the regulator for all clearly to see.

We know that regulation in the field of finance is not easy. The evidence of personal pensions is there to the knowledge of all of us. We know about the difficulties that the Personal Investment Authority now faces when companies refuse to comply with it. But regulation is easier and far more effective when all parties know where they stand. They are entitled to know what the regulator must do and can do. This amendment

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simultaneously empowers the regulator and makes his duties, powers and responsibilities clear to those bodies that he regulates.

So far as I am aware, the CBI and the National Association of Pension Funds have no objection to this amendment. Consumer bodies, from the Consumers' Association and Age Concern to bodies representing scheme members such as the TUC, very much want that clarification. As the National Association of Pension Funds has said, it would like to see far more clarification of the thinking behind the role that the regulatory authority will play. I hope that the Government agree and that they will accept this amendment. I beg to move.

3.15 p.m.

Lord Mackay of Ardbrecknish: As the noble Baroness, Lady Hollis, said in her introduction, the new regulatory authority is the key element in the reforms to the pension industry that are set out in this Bill. Taken together with the other measures in the Bill to improve the administration and security of occupational pension schemes, it presents a formidable barrier against dishonesty and negligence. It will be an independent statutory body, fully accountable to Parliament. It will have all the powers necessary to enforce compliance with the law. It will act swiftly and incisively to protect scheme members and to sanction or remove wrongdoers. And it will have a wide range of investigatory powers to act wherever it has reason to suspect that something is amiss, even where no formal report has been made.

I share the desire of the noble Baroness to give the new authority a comprehensive range of properly targeted duties and responsibilities. The Bill does exactly that, and we shall come to them clause by clause as we examine the Bill. It places clear obligations on pension schemes and gives the authority a range of well-defined powers to enforce them.

But it is neither practical nor desirable for the authority to supervise and regularly monitor over 150,000 pension schemes, most of which are perfectly well run. That would certainly be a recipe for a very bureaucratic and possibly interfering body. It would also add greatly to the cost—cost which has to be passed on to employers via the levy—and it would require, for example, the authority to enforce obligations which are already enforceable under other enactments, including trust law. I do not believe that that would be sensible.

Some of the responsibilities that are outlined in the noble Baroness's amendment would make the authority into an advice and information bureau, which would be a wasteful duplication of the excellent services provided by the Occupational Pensions Advisory Service, and it would describe the authority's responsibilities in such general terms as to open them up to ambiguity and doubt.

In short, the Committee must not be misled into believing that, because it is called OPRA, this authority should, can be or will be some sort of all-singing, all-dancing act. It will be, to employ words that were used at Second Reading, very much there to take on the role of the person who comes in when the whistle has

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been blown, or, as I said earlier in my remarks, even when there has been no formal complaint, where it feels that there is something upon which it ought to act.

The authority, OPRA, will be robust and effective, and it will have the powers and duties that it needs to protect the security of occupational pension schemes. While I very much appreciate the noble Baroness's desire to help us in our task of making sure that another Robert Maxwell incident does not occur, I do not believe that we need the additions to this clause that are in the noble Baroness's amendment.


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