Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Monkswell: My Lords, I too am concerned about these amendments. I shall not repeat the arguments made by my noble friend Lord McIntosh—he expounded them very well. But I must declare an interest. I am married to a teacher who is a member of the teachers' superannuation fund. One of my concerns is the implication for members of public service pension schemes and what the Government can do if the amendment before us is agreed.

I am concerned about a situation where a public service pension scheme, for various reasons, develops a surplus of assets over liabilities. Once the benefits of the scheme have been approved up to the Inland Revenue limits and the surplus still exists, the Government would have a vested interest in winding up the scheme and effectively saying, "Let us have a different scheme or a different set of schemes for these people". They may encourage the members to believe that the new schemes are better than the old ones. The scheme is then wound up and effectively the Government pocket the surplus.

The private sector have engaged in such a practice for the past 10 or 15 years. It is well established and is effectively part of company takeover ploy. I am not sure that it is right for Government Ministers to make decisions in relation to the winding up of schemes. The whole record of this Government is that they are not concerned with individual employees and public service workers. They are not concerned with the public good and seem to be concerned only with the financial elements involved. In those circumstances, we must have grave reservations in relation to the way in which the Government utilise the powers that they are conferring on themselves by the amendment.

What are we to do? It is interesting that not only do the Government take powers to themselves to change statutes, as my noble friend Lord McIntosh pointed out, but they say also that there will be adequate scrutiny by Parliament by the utilisation of the negative procedure. It is perhaps not well known that one of the difficulties of dealing with the negative procedure is that one must obtain agreement through the usual channels—by and large that means the Government Benches—to debate the subject, whereas if the affirmative procedure applies, then the Government must table an order of some kind. That must then be debated or taken on the nod.

To introduce powers that can change statutes and that have the ability to change public service pension schemes without the express approval of Parliament is

13 Mar 1995 : Column 594

extremely dangerous. I hope therefore that the Government will think again on a number of these issues.

Lord Lucas: My Lords, I propose to end my remarks by giving some comfort to the noble Lord, Lord McIntosh. We believe that the procedures we have set in place are the right ones, given the specific nature of the public service pension schemes. Some of the schemes are set up by statute and therefore can only be amended by statute; in other words, we need a statutory means of dealing with them. Others—for instance, the teachers' pension schemes—are not funded schemes at all and therefore do not come within the scope of the problems mentioned by the noble Lord, Lord Monkswell.

We believe that the negative resolution procedure will properly cover all the circumstances in which the powers may be used. However, we shall be drawing the attention of the Select Committee to this clause and to these powers and we shall consider extremely carefully anything which it may have to say to us.

On Question, amendment agreed to.

The Earl of Buckinghamshire moved Amendment No. 21:


Page 5, line 5, at end insert:
("; and, unless the Authority consider that at the time when the order is made the scheme does not meet the minimum solvency requirement, an order may only be made under this section after consultation with each of the persons mentioned in paragraphs (a) to (c) (other than any on whose application the order is made).").

The noble Earl said: My Lords, Clause 10 deals with the wind up of schemes. If a scheme is no longer required or is to be replaced by a different scheme, an application for wind up can be made by the trustees, a manager, a person who has the power to alter the scheme, or the employer. I moved this amendment in Committee. I am bringing it back to the House because it is important that other interested parties should also be consulted. In Committee my noble friend the Minister gave assurances that OPRA would wind up a scheme only if it was deemed to be the most appropriate course of action. However, my noble friend took on board the argument that sometimes in the case of a surplus in a scheme wind-up may be in the short-term interests of those current members but not necessarily in the interests of the long-term members of the scheme. On that basis, my noble friend agreed that he would look at the issue again. I shall be very interested to know how his thoughts have progressed. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, this amendment attempts to introduce a requirement for consultation between the authority and those involved in the administration and management of the scheme before an order for wind up is made by the authority. This requirement would relate only to wind ups precipitated by application made to the authority by the employer, trustees, or any other person authorised by the scheme's own rules to amend the scheme. I appreciate that my noble friend's amendment is designed to apply checks and balances for applications for wind up orders, but I do not believe that the

13 Mar 1995 : Column 595

introduction of this extra bureaucracy would be helpful to the authority, to managers of the schemes, or to scheme members.

The purpose of this part of Clause 10 is to provide that orders can be made to wind up a scheme that is being replaced or is no longer needed and where the scheme itself does not have an adequate wind up power. This might occur where working practices are being restructured and where the pension scheme needs to be altered to reflect that process. I am sure that your Lordships will agree with me that this provision is essential for the efficient management of occupational pension schemes.

These powers are intended to be the same as those currently available to the Occupational Pensions Board under Section 142 of the Pension Schemes Act 1993. The power in that section is limited by Section 138 of that Act. Section 138 requires that an application cannot be entertained if wind up can be achieved in a different way or if it could be achieved only by an unduly complex or protracted process. But the introduction of a formal consultation process between managers of a scheme would be bureaucratic and unnecessary, especially since such consultation is likely to have taken place informally anyway.

I believe that the best way to address my noble friend's concerns may be to make an amendment which restores provisions similar to those in Section 138 of the Pension Schemes Act 1993. I shall therefore look carefully to see whether such an amendment is necessary. If it is, we shall bring it forward in another place. With that assurance I hope that my noble friend will withdraw his amendment.

The Earl of Buckinghamshire: My Lords, I am extremely grateful to my noble friend. It serves the purpose of moving amendments at this stage if we get the answers that we like to hear. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.15 p.m.

Lord Lucas moved Amendment No. 22:


Page 5, line 20, at end insert:
("(6) In the case of a public service pension scheme—
(a) an order under subsection (1) directing or authorising the scheme to be wound up may only be made on the grounds referred to in paragraph (c), and
(b) such an order may, as the Authority think appropriate, adapt, amend or repeal any enactment in which the scheme is contained or under which it is made.").

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 20. I beg to move.

Lord Boyd-Carpenter: My Lords, although this amendment was spoken to with Amendment No. 20 that does not exclude discussion now that the amendment itself has been put. On that basis I should like to say that the powers conferred, particularly in the final paragraph of the amendment, are very wide indeed. It is a question of whether the powers taken are confined entirely to the pension scheme concerned or whether, as I think it could be read, they go wider and involve the

13 Mar 1995 : Column 596

whole structure of the particular organisation of which the pension scheme was a part. Paragraph (b) of the amendment states that such an order may,


    "adapt, amend or repeal any enactment in which the scheme is contained or under which it is made".

It looks to me that that goes beyond the actual existence of the scheme and relates, or could relate, or could be construed as relating, to the whole apparatus of the organisation as part of which the scheme was made. The powers seem very wide. I do not want to detain your Lordships any longer than necessary but I would welcome some reassurance that the width of these powers, which I understand are to be exercised subject only to the negative procedure, is being reconsidered.

Lord McIntosh of Haringey: My Lords, I support what the noble Lord has just said. He is, I think he will recognise, expanding the argument which I made in speaking to Amendment No. 20. I was pleased to have, although I was too slow on my feet to say so, the assurance of the noble Lord, Lord Lucas, that these amendments will also go before the Delegated Powers Scrutiny Committee. That may go some way towards reassuring the noble Lord. But he is quite right that the power to repeal, in the extreme case,


    "any enactment in which the scheme is contained",

sounds very broad indeed. It may be that the enactment is extremely limited and needs to be repealed as a whole. But it may be that the enactment is a very much larger enactment; for example, one of the privatisation Acts. The idea that the Occupational Pensions Regulatory Authority should have the power to repeal one of those Acts might be pleasing to some of us, but I do not think it can be what the amendment actually intends.


Next Section Back to Table of Contents Lords Hansard Home Page