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Lord Mackay of Ardbrecknish: I am not entirely sure that the noble Lord is not coming to this from the opposite direction. He was talking about an employer wanting to wind up the scheme under the feet of the scheme members, with them having no say in the

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matter. I think that is what he was saying. We are actually discussing who can make an application to the authority to wind up the scheme. The noble Baroness is asking me to consider adding scheme members to the list. That is a different argument from the one suggested by the noble Lord.

My response to the noble Baroness stands. If the noble Lord was suggesting that an application from, say, an employer would be automatic, and that the scheme members would have no say in the matter, I can assure him that an application is not automatic. The authority can accept the request and proceed with wind-up, or it can refuse any application for wind-up. I hope that answers the noble Lord and helps him with the problem that he raised.

Baroness Dean of Thornton-le-Fylde: The Minister is correct in his interpretation of what we intend with the amendment: it is to include the scheme members. My concern with the Bill is that we talk about trustees, professional advisers and employers, but we sometimes tend to forget the persons whom it is really all about; that is, individual members of the scheme who invest in it a considerable amount of their hard-earned income.

In going through the Bill, we must ensure that individual scheme members have control and authority, and are rightly able to seek accountability from the people who run and organise the scheme. Therefore any measures in regard to pension funds should de facto include the rights of individuals within the scheme—the scheme members. I hear what the Minister said and I shall read in Hansard and consider whether we should come back at a later stage. At this point, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 50:

Page 5, line 11, at end insert:
("( ) The winding up of a scheme in pursuance of an order of the Authority under this section is as effective in law as if it had been made under powers conferred by or under the scheme.
( ) An order under this section may be made and complied with in relation to a scheme—
(a) in spite of any enactment or rule of law, or any rule of the scheme, which would otherwise operate to prevent the winding up, or
(b) without regard to any such enactment, rule of law or rule of the scheme as would otherwise require, or might otherwise be taken to require, the implementation of any procedure or the obtaining of any consent, with a view to the winding up.").

The noble Lord said: I spoke to this amendment with Amendment No. 44. I beg to move.

On Question, amendment agreed to.

Clause 10, as amended, agreed to.

Clause 11 [Injunctions and interdicts]:

Baroness Turner of Camden moved Amendment No. 51:

Page 5, line 21, at end insert ("and the costs of such court action, and any costs incurred in preparing cases under this section, shall fall on the Secretary of State.").

The noble Baroness said: I shall speak also to Amendment No. 57. Amendment No. 51 addresses the problem that it would be for the regulatory authority to

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prove reasonable likelihood of misappropriation to a court. That could be an expensive exercise. The authority needs resources to investigate possible cases. The budget allocated to the regulator may be insufficient to sustain many cases. The idea of the amendment is to ensure that the DSS or the Government will provide sufficient resources.

It is worth mentioning that Clause 87 provides very wide-ranging powers both for the authority to make application to the courts and for aggrieved individuals to make application for judicial review. In these circumstances, it becomes necessary to ensure that the authority has the resources available to it. If the authority wishes to make application to the court under Clause 11, which deals with the important question of a possible misappropriation, the Government should stand behind it to ensure that the necessary costs are met. That would be in the public interest.

Amendment No. 57 also deals with references to a court and Clause 87 relates to references to a court by the authority. Where it is deemed appropriate to refer any question of law to the court the authority must tell the applicant where this arises from an application being made to the authority and, in any case, to such persons as appear to it to be concerned with the question. Again, it says little about scheme members and the beneficiaries.

The intention of the amendment is to make it obligatory for the authority also to notify any independent trade union, recognised to any extent for the representation of members of the scheme, and any organisation appearing to be representative of pensioners or beneficiaries of the pension scheme concerned. It is surely appropriate for the scheme members, through whatever organisation they choose to represent them, to be involved if there are references to a court about their scheme. After all, they are the people who are most concerned—a point made most strongly by my noble friend Lady Dean. I hope that the Minister will regard these two relatively minor amendments as entirely reasonable. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, these two amendments concern the arrangements for taking court action. I am not happy about them because they would impose additional costs on the taxpayer. We believe that it is fundamentally correct that the costs of regulation should fall on those who set up and run pension schemes. We had a major debate about that earlier today. For this reason, I cannot accept Amendment No. 51, which provides for the costs of court injunctions granted on application by the authority to be met by the Secretary of State.

I believe that Amendment No. 57 is unnecessary. The effect of this amendment is to require the authority to give written notice to specified parties of its intention to refer a case to the court on a point of law. However, Clause 87(2)(b) already gives the authority a wide permissive power which would enable it to do this. The authority will be well equipped to decide which groups may have an interest in a given case. Clause 87(2) states:

    "If the Authority determine in accordance with subsection (1) to refer any question of law to the court, they must give notice in writing of their intention to do so—

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(a) in a case where the question arises on an application made to the Authority, to the applicant, and
(b) in any case to such persons as appear to them to be concerned with the question". I believe that the authority will be well able to judge who is concerned with the question. It seems to me unnecessarily prescriptive and bureaucratic to require the authority to notify such organisations in all cases, even where not all of the groups might have a specific interest.

This amendment would also insert a power to allow the authority to meet the court costs of scheme members or those organisations representing them, with or without a court order requiring them to do so. Clause 87(7) already provides for the court to order the authority to pay the costs of any other person if it considers it appropriate. Whether or not the decision is in that other person's favour and whether or not the authority appears on the reference or the appeal the court may order the authority to pay the costs, or in Scotland the expenses, of any other person. It is surely the court which will be best placed to decide in what circumstances it would be right for the authority to meet such costs.

Extending the circumstances under which the authority would pay costs would increase the costs of the authority and would be asking all pension schemes to meet the legal costs of persons involved in a case which might concern only one specific scheme and where the groups specified in the amendment might have only a marginal interest in the question referred. I believe that this amendment is unnecessary and the costs and the way they are imposed are wrong and contradict the points that I made earlier. I hope, with that explanation, the noble Baroness will feel able to withdraw her amendments.

Baroness Turner of Camden: I thank the Minister for his response to the amendments. I am not entirely surprised at his response to Amendment No. 51, but I think it would be unsatisfactory if the regulatory authority found that it did not have sufficient funds available to take appropriate cases to the courts where a case of misappropriation was involved. It surely would not be in the public interest for that to happen. That was why we felt that the Government ought to be prepared to stand behind the regulator if that were the case. However, I am not surprised, in view of the Minister's general attitude to funding as regards the authority, that he has not felt it appropriate to accept Amendment No. 51. We shall look carefully at what he said in Hansard and see whether there is any way in which we can return to the matter on Report.

With regard to Amendment No. 57, I note what the Minister had to say about it being unnecessary and about the provisions of Clause 87. However, I still feel that independent trade unions recognised to any extent for the representation of members in a scheme, or an organisation representative of pensioners or beneficiaries, ought to have some status and ought to have some rights in regard to consultation. It may well be that our wording here is not appropriate—I am quite willing to accept that—but I think that organisations of that kind have a role and have a right of consultation. It

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would be a good idea for that right to be written into the Bill. I shall not press either of these amendments at this point in time, but certainly I shall look very closely at the response, particularly to Amendment No. 57, to see whether we can return with a different sort of wording on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 agreed to.

Clause 12 [Restitution]:

[Amendment No. 52 not moved.]

Clause 12 agreed to.

Clause 13 [Directions]:

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