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Lord Mackay of Ardbrecknish: I fully appreciate that the matter is serious. The noble Baroness started to make a point, but she did not really advance the argument. Perhaps she did not wish to stray into other fields with which we shall deal later. The question of an appeal has been one of the difficult issues with the Child Support Agency.

Here we are dealing with a regulatory authority with a statutory duty to carry out all the work we have laid down. I was accused earlier in the day of proposing a regulator who was weak and might be ineffectual. I am now saying: "Let's keep it firm by not allowing people to appeal against decisions which would prevent the regulator from acting quickly and efficiently", and I am now being—I shall not say attacked, but asked rather gently whether I will do something to put in an appeals procedure. There is already provision in the Bill to go to the courts on a point of law.

I shall carefully consider what the noble Baroness said because I appreciate that sometimes it is important to have the safety valve of an appeals system. I hope that she will agree with me that the provision would have to be extremely narrowly drawn and not in any way prevent the regulatory authority from being able to act quickly and efficiently to prevent any further damage to an already damaged scheme. I shall go so far as to say that I shall consider what has been said, but I should have to be more convinced than I am before I could go

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down the road of introducing an appeals procedure. It might weaken the immediate impact which the regulator might need in certain cases.

Baroness Hollis of Heigham: I thank the Minister for that reply. The reason I did not pursue the example of the Child Support Agency is that I did not wish to embarrass him. Members on this side of the Committee called for an appeals system there and the Minister refused it. Two years later, the Minister has had to accept a system, acquiesce in it and introduce it in the light of public protest. I thought that perhaps the Minister would have learnt from that and was ascertaining whether we could establish common ground between us.

Perhaps the Minister could take on board the anxiety here. We are not sure that the proposal is the right way to handle it, but there ought to be a final reviewing agency above and beyond the regulatory authority. However, in the light of the Minister's assurances that he will consider the matter —I shall not say reconsider it—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 55 not moved.]

Clause 86 agreed to.

Clause 87 [References and appeals from the Authority]:

Baroness Seear moved Amendment No. 56:


Page 50, line 19, leave out ("if the Authority think fit").

The noble Baroness said: This amendment is very much a continuation of the discussions we have just had. In the light of what he has just said, the Minister will probably tell me that the question has been answered. However, the point of the amendment is to ensure that the legal advantages are not all in favour of the authority as against the members requiring legal protection. The phrase:


    "if the Authority think fit",

seems to imply that the authority has a right to go to law or not to do so as it sees fit. The Minister will probably say that the members are equally protected under subsection (3) (b) because they can appeal to the law. However, I should like that to be confirmed. It is the same point as the one made by the noble Baroness. We wish to be certain that the authority does not have arbitrary power and that at the end of the day appeal to the law is available for all interested parties, not only the authority. I beg to move.

9.45 p.m.

Lord Mackay of Ardbrecknish: As the noble Baroness, Lady Seear, explained, this amendment removes the specific reference to the authority from Clause 87(1), which sets out the powers to refer questions to the court on a point of law. The effect of the amendment would be to make it unclear who is to refer questions that arise under Clause 87(1).

The power to refer cases is intended to allow the authority, in its regulatory and enforcement role, to seek clarification from the courts where it believes that the

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law is not sufficiently clear for it to reach a decision on a matter arising under Part I of this Bill or on a matter arising on review.

Adequate provision is made elsewhere in this clause for others to take questions to the court. Where any person is aggrieved by a decision of the authority on review, including any refusal of the authority to review a decision, provision is made under Clause 87(3) for that person to appeal to the court on a point of law. I will not read out the subsection, but it states quite clearly that any person who is aggrieved, where the determination involves a question of law, may on that question appeal from the determination to the court.

On a general point, it is of course open to any group or organisation wishing to seek clarification on a specific area of the law to take up a suitable test case. Sitting in the Department of Social Security, I can say that that path seems to be pretty well-worn by many bodies. I therefore do not believe that it would be wise, as this amendment seeks, to make Clause 87(1) less clear. The fear that the noble Baroness has about other people's rights to go to court on a point of law is dealt with by Clause 87(3).

Baroness Seear: I am grateful to the noble Lord for that reply. I am very anxious to have confirmation from the Minister on the record so that we can be absolutely clear that there is the same right of appeal to the law for all the interested parties and that there is no preferential position, as it were, for the authority. In the light of what the Minister said, I am very glad to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 57 and 58 not moved.]

Clause 87 agreed to.

Clause 88 [Provision of information]:

Lord Haskel moved Amendment No. 59:


Page 51, line 9, after ("writing") insert ("and, in the case of information under subsection (4) below, in any event without being so required").

The noble Lord said: In speaking to this amendment, I also speak to Amendments Nos. 60, 71, 80 and 84.

The purpose of this amendment is to implement the sound business practices recommended in the Goode Report; namely, that there should be the discipline of an annual return to the regulator. These amendments draw on my experience of business in the United States, where annual returns are obligatory. The Department of Labor there has developed standard computer programs which highlight key ratios and other data, and that is how the majority of tip-offs occur. In addition, in the United States, under the Freedom of Information Act, scheme members are able to inspect the returns of their own employers, and that is an important contribution to informed regulation.

In the US, where the annual returns are disclosed to all scheme members, the Department of Labor receives more useful information in feedback from scheme members and learns a lot more about which schemes need investigating than it does from its own

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investigations. Once again, this proves the value of openness. This amendment is designed to ensure a full disclosure of information.

Mr. Andrew Large, the director of the Securities and Investments Board, recently sent me a copy of a speech that he had made in which he made clear that the regulatory burden could be lifted,


    "only if the personal financial services sector was more open with its customers".

This amendment will encourage that. I beg to move.

Lord Mackay of Ardbrecknish: The noble Lord has clearly explained the purpose of his amendments. I am sorry to tell him that I believe they would make some unacceptable changes to the way in which the authority would operate, and in particular to its powers to investigate schemes. In fact, we partly discussed the issue earlier when a noble Lord opposite—it is so long ago I cannot remember who it was—proposed an amendment to Clause 1 on similar lines with regard to the 150,000 pension schemes. I do not share the noble Lord's experiences of the United States of America, but it may help the case that I am about to make to tell the Committee that the Department of Labor's returns run to some 50 pages of detailed questions. There are 150,000 pension schemes and it is late at night. It is an awful lot of pages.

In addition, in the United States interestingly enough, there is a substantial level of failure to return information. The Department of Labor has a substantial backlog of work. I do not believe that it is the best model for an effective regulator. As I said earlier, the last thing we want is for the regulatory authority to become bogged down in administering the returns, making sure that it receives them in the form that it wants and storing them. That would take its eye off the main task we are giving it in the Bill; namely, to investigate schemes about which there is some suspicion—schemes which have been drawn to its attention. We do not want it to spend a great deal of time, energy and money looking at schemes which are running perfectly well. We believe that the authority should focus on schemes that have problems rather than schemes which are running smoothly. That is why it will act in response to reports of suspected breaches of statutory obligation under both this Bill and the Pension Schemes Act 1993.

Amendments Nos. 59 and 60 would impose a requirement for schemes to submit annual returns to the authority, as the noble Lord said. I have explained that that would be an unnecessary burden on schemes. There would be the inconvenience of having to file the returns and an additional cost to the authority, which would fall via the levy, on the schemes themselves.

Amendment No. 84, which appears to be consequential to Amendments Nos. 59 and 60, would enable the authority to disclose to members or representatives of members any information contained in annual returns submitted to the authority. There is no specific need for that as OPRA is able to disclose information already in the public domain through Clause 94(2) (a).

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Amendments Nos. 71 and 80 introduce a requirement for the authority to draw up a programme of inspection visits and allow a JP to issue a warrant for an inspector to enter and search premises if the scheme fails to operate such a visit. The authority will be able to carry out on-site checks independently of any complaint or report being received. To require it to make such visits would be an unacceptable constraint on the authority's freedom to decide how it should undertake its responsibilities.

I suspect that the noble Lord will not be very satisfied with my reply. However, I hope that with that reply and the replies I gave earlier today I have underlined the fact that OPRA's role is not to monitor all 150,000 pension schemes, most of which are running perfectly effectively, but to intervene in those schemes where question marks have been thrown up by the trustees, the auditors or, as I explained earlier, any other persons who may have knowledge which they think should be drawn to the attention of the regulator for his consideration along with the decision as to whether or not it is a sufficiently serious matter for him to start investigating a particular scheme.


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