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Lord Mackay of Ardbrecknish: Would the noble Baroness like to tell me whether we are right in thinking that "Section 157" ought to have been "Section 152"? To be honest, that would be quite important if the noble Baroness were to force the matter to a Division. It means that I can take refuge in the ultimate bolthole of the amendment being defective. As I said, it would help us. We would certainly consider all that has been said.

Baroness Turner of Camden: Is the Minister saying that he is willing to consider what we have to say in the context of Section 152 rather than Section 157?

Lord Mackay of Ardbrecknish: I wanted to be clear that we were right in thinking that it was Section 152. As we do not disagree on what we want to do, I am reluctant to allow the Committee to proceed on the basis that I am totally opposed to looking at what has been said. I would certainly wish to take away all the points raised, including the one made by my noble and learned friend and other noble Lords, to see whether my advice is correct and that examples such as those that have been brought to us are adequately and safely dealt with. If the

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Committee is dissatisfied with what I eventually decide, there is Report stage at which to come back and have another go at me.

Baroness Turner of Camden: While the Minister was speaking, I took counsel from my noble friends. We are not anxious to push amendments to a vote or a Division, if it looks as though we might be able to reach agreement between ourselves on some way of giving protection to the people who will act as trustees and might be regarded as rather awkward and in need of special protection. When the Minister responded to me earlier, he said that special protection had been needed in other cases when certain types of behaviour by employers was unacceptable. I ask him to accept that the amendment acknowledges that there could be very unacceptable behaviour by employers. I believe that all sides of the Committee are agreed on that.

If the Minister is willing to say that he will look at what has been said in this debate and come back at Report perhaps with something to which we can all agree—we seem to have a measure of agreement between us—I certainly shall not press the amendment to a Division this afternoon.

Lord Mackay of Ardbrecknish: I am not sure that I can go much further than I already have gone. I should like to look carefully at what has been said. I should like to see whether the points that I made about protection are correct or whether the concerns of other Members of the Committee are justified. Obviously, if I am looking at that, I cannot promise one way or another to come forward inevitably with an amendment. I can certainly give the noble Baroness an assurance that we will take very seriously indeed everything that has been said today. If, in my view, a serious loophole has been opened up, we shall give serious consideration to how we can close it.

Baroness Turner of Camden: I thank the Minister for that statement. We shall look very carefully at the way in which this matter develops. Again, I thank all those who have participated in the debate. In view of what has been said this afternoon, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 [Exceptions]:

5.15 p.m.

The Deputy Chairman of Committees (Lord Murton of Lindisfarne): If the Committee agrees to Amendment No. 111A, I shall not be able to call Amendment No. 111B tabled by the noble Earl, Lord Buckinghamshire, because of pre-emption.

Baroness Hollis of Heigham moved Amendment No. 111A:


Page 7, line 15, leave out from beginning to ("and") in line 21, and insert:
("( ) a ballot of active and pensioner members has been carried out by the employer under the statutory consultation procedure,
( ) in that ballot a majority of members eligible and voting supported that alternative,

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( ) any complaint made to the Authority under the statutory consultation procedure has been considered and rejected, or action taken to rectify the position,").

The noble Baroness said: In moving this amendment I shall speak also to Amendments Nos. 116B and 158B.

This is a modest amendment but we believe that it is rather important. Two-thirds of all schemes, covering a third of members, have no elected or nominated member trustees and at the moment many of the rest will not contain one-third such trustees. In other words, after the passage of this Bill, most schemes will need to change, unless the employer and scheme members wish to keep the present trustee arrangements undisturbed; for example, where the scheme employs an independent professional trustee. That is their right, provided that members have been fully informed and fully consulted and that members' rights have been properly exercised. But will that be the case? I hope to persuade the Committee that this amendment will make that choice very clear.

Under the Bill at present, if the employer wishes to keep the existing arrangements of fewer than one-third trustees coming from scheme members, he must notify employees; and only if 10 per cent. of the staff require it he must then proceed to a ballot to ascertain their views. In other words, scheme members have to take the initiative to seek a ballot. We believe that it should be the other way round.

We believe that employers should be required to provide a ballot as part of the statutory consultation process itself. It should not be left to the energy of members to ask for a ballot. It should be the duty of the employer to provide one. Otherwise, how can the employer genuinely know members' views?

Perhaps I may use an analogy which I am sure will be familiar to the Committee. On a matter of such importance, we want, so to speak, the affirmative rather than the negative procedure when employees are perhaps being asked whether they wish to opt out of their legal rights under this Bill. We want to ensure that there must be a positive vote to relinquish rights rather than having scheme members merely trigger a vote because 10 per cent. of them have demanded it. I believe that that is only fair.

This is a very modest change but it ensures that people know what they are doing because they have balloted on the issue when they are asked or invited to forgo what would otherwise be their legal rights. That seems only fair. I beg to move.

Lord Finsberg: I hope that my noble friend will advise the Committee to reject the amendment. It seems to treat as incompetent, uneducated, second-class citizens those in pension funds and pensioners. It suggests that if they have a problem, they will not be competent enough to form part of the 10 per cent. who can ask for a ballot. Moreover, the amendment will involve in unnecessary cost every scheme of every employer, or mixture. I do not believe that that is an advantage to the pension fund.

Those who are in pension funds will, after all, not be coming to something that is totally new. If, in the past, they have been less than satisfied, they will be active in

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asking for a ballot and for the 10 per cent. to be forthcoming. If it concerns anything else, I still believe that individuals in a pension scheme or pensioners will have enough wit to say, "There is something that I should like to put right. I should like my chance of having a ballot." They would ask for it.

I hope that my noble friend will not be tempted into accepting the amendment. It is in fact a far more unnecessary—dangerous is not quite the word to use—amendment than those we have already discussed.

Baroness Seear: My name is also on the amendment. It is not about a vital principle, as perhaps those amendments that we have discussed previously have been. However, such things can go by default and we want to make sure that they do not do so. The noble Lord, Lord Finsberg, said that members will not be coming to something new. But the scheme could be a brand new one. People might not be very familiar with it.

This is not an issue of the highest level of importance. However, we want to make sure, particularly in the small schemes, where the organisation may not be very strong, that the employer cannot set up the kind of arrangement that he wants simply because the matter goes by default. That is all I want to say. I support the amendment.

Lord Monkswell: I hesitate to rise in this debate except to say this. We have just debated protection for employees who are members of boards of trustees, and there was general agreement that they should be protected from the pressure that may be placed upon them by an employer. We are now envisaging a similar situation in that the proposal by the Government suggests that there should be a form of trigger mechanism. The implication of such a mechanism is effectively to say to the employer, "We think there is something wrong with the scheme and therefore want a change". Exactly the same pressures arise. It may be a wider group of employees, but an employer may threaten that if an employee starts the trigger mechanism he will wind up the scheme.

That may prove to be a bar on employees becoming involved in schemes, seeking representation among the trustees and, through the trigger mechanism, ensuring that their pension scheme is operating satisfactorily. The provision therefore needs to be considered as part of the structure of safeguards that should be built into the Bill for the benefit of future schemes.


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