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Lord Lucas moved Amendment No. 177:


Page 63, line 12, at end insert:
("( ) Where by reason of the contravention of any provision contained in regulations made by virtue of this Part—
(a) a person is convicted of an offence under this Part, or
(b) a person pays a penalty under section 9,
then, in respect of that contravention, he shall not, in a case within paragraph (a), be liable to pay such a penalty or, in a case within paragraph (b), be convicted of such an offence.").

The noble Lord said: My Lords, in moving this amendment, I shall speak at the same time to Amendment No. 216. These amendments introduce changes to Clauses 105 and 135. Amendment No. 177 is concerned with breaches under Part I of the Bill and Amendment No. 216 with breaches under the Pension Schemes Act 1993.

These amendments provide that where a breach under Part I of the Bill, or the Pension Schemes Act 1993, attracts both a civil penalty and a criminal penalty, then someone who is required to pay a civil penalty fine in respect of such a breach cannot be prosecuted and convicted for the same breach. It also means that a person who is prosecuted and convicted of such a breach cannot also be required to pay a civil penalty fine in respect of it.

These amendments introduce a common sense clarification that is in line with natural justice and ensures that a person cannot be penalised twice in respect of the same breach. I beg to move.

On Question, amendment agreed to.

Clause 107 [Powers to modify this Part]:

Lord Lucas moved Amendment No. 178:


Page 63, line 35, leave out subsection (3).

The noble Lord said: My Lords, I spoke to this amendment with Amendment No. 151. I beg to move.

On Question, amendment agreed to.

Clause 109 [Consultations about regulations]:

The Earl of Buckinghamshire moved Amendment No. 179:


Page 63, line 42, after ("consult") insert ("organisations representative of employers and").

The noble Earl said: My Lords, at Committee stage my noble friend the Minister moved similar amendments. That was most welcome. I invite him to move a little further forward.

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If the Government intend to consult all interested parties on the minimum funding requirement, then it seems sensible to put on the face of the Bill the employer as an interested party. This amendment requires the Secretary of State to take account of the employer's view modifying the minimum funding requirement. It requires him to consider the effect on employers in varying the prescriptions governing time periods and method of calculation and to seek the agreement of both Houses of Parliament. It also requires him to publish the reasons for his decisions.

The amendment takes account of the need to re-examine the operation of the minimum funding regulations following experience of its operation. As such, it retains the proposed security for scheme members while minimising the danger of damaging error by providing a means of quickly rectifying unnecessarily stringent regulations. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, we firmly believe that there should be a statutory duty on the Secretary of State to consult about regulations. That is why we introduced Clause 109 during Committee stage. That clause requires the Secretary of State to consult people he considers appropriate. This will ensure that he consults those who have the relevant expertise, knowledge and experience to provide informed analysis and comment.

Current legislation requires my right honourable friend to consult the Occupational Pensions Board on all regulations to do with pension matters. But it does not require him to consult anyone else. In practice, the Government have traditionally consulted widely on pensions legislation, both primary and secondary, and we shall continue to do so.

We recognise that these are complex, technical matters and that it is sensible to draw on the vast fund of knowledge built up over many years by professionals and practitioners. Indeed, it is largely due to the extensive formal and informal consultation which has taken place since the PLRC published its report that we have been able to fine-tune many of the provisions in this Bill. Perhaps I might take this opportunity to express my gratitude to the many individuals and organisations who have contributed so constructively to our deliberations. I look forward to their continuing contribution, both as the Bill proceeds through Parliament and when we turn to secondary legislation.

Listing organisations which should be consulted carries significant risks. Once one type of organisation is specified on the face of the Bill, it would be necessary to list all types of organisations that it might be appropriate to consult. As noble Lords will appreciate, any such list is unlikely to be exhaustive. Rather than get drawn into such a debate, it seems infinitely preferable not to start any list at all.

As I have said, it has always been our practice to consult widely on occupational pensions issues, including with employers' and employees' organisations. We will continue to do so in the future. This clause already allows for effective consultation to take place and I hope that this, with our already

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excellent record in this area and what I have just said will persuade my noble friend to withdraw his amendment.

The Earl of Buckinghamshire: My Lords, I thank my noble friend the Minister for his very full reply to my amendment. The Government have an exemplary record as regards consultation over these issues. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 3 [Amendments consequential on Part I]:

Lord Lucas moved Amendment No. 180:


Page 105, line 32, leave out from ("1987,") to ("Occupational") in column 1, line 34 and insert ("at the end there is added—
"20. The").

The noble Lord said: My Lords, this amendment revises the format of the insertion into the table in subsection (1) of the Banking Act 1987 to fit in with the rest of that table. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 181:


Page 107, line 43, leave out paragraph 35.

The noble Lord said: My Lords, in moving this amendment, I shall speak at the same time to Amendments Nos. 214, 227, 228 and 237. Although not commenced, there is provision in existing legislation to require salary-related occupational pension schemes to increase the part of the pension in excess of the guaranteed minimum pension by the rate of price inflation to a limit of 5 per cent.

This provision is no longer required. Your Lordships will be well aware that this Bill requires all occupational pension schemes to index pensions in this way. Amendment No. 228 makes the necessary change to the legislation and Amendments Nos. 181, 214 and 237 simply make consequential amendments that are necessary as a result.

Amendment No. 227 is needed to make it clear that Schedule 6 covers general and minor consequential amendments. Originally, Schedule 6 made amendments consequential on Part IV of the Bill, but the schedule needs to go wider than that so that Amendment No. 228 can be included. I beg to move.

On Question, amendment agreed to.

Clause 112 [Interpretation of Part I]:

The Earl of Buckinghamshire moved Amendment No. 182:


Page 64, line 30, leave out from ("means") to end of line 32 and insert (", where pensionable service has not terminated, the entitlement under the scheme had pensionable service terminated, and, where pensionable service has terminated, the actual entitlement under the scheme.").

The noble Earl said: My Lords, this amendment deals with the definition of "accrued rights" in the Bill. I do not understand from the Bill—perhaps more importantly nor do some sections of the pensions industry—how we would ascertain what are accrued rights within defined benefit schemes and how they should be determined. To put it another way, the definition of accrued rights in the Bill is meaningless in the context of a defined benefit scheme because, in my opinion, it lacks a point

14 Mar 1995 : Column 758

in time by reference to which the rights are defined. As a result, it is not possible to ascertain under Clause 60, which deals with the powers to alter schemes, what rights have been acquired before the power is exercised. The amendment seeks to remedy that defect. I beg to move.

Lord Mackay of Ardbrecknish: My Lords, I have no objection in principle to what my noble friend Lord Buckinghamshire has proposed. Indeed, I will go further—I welcome his contribution on this matter. Since the Bill was published, we have ourselves realised that the definition of accrued rights, especially the use of the term "prospective rights", is not as precise and clear as we should like it to be. But while I readily acknowledge that the definition of accrued rights contained in Clause 112 may not be correct, I fear that the one contained in the amendment is also flawed.

Our aim is to provide a definition which will apply whenever the term accrued rights is mentioned or implied in the Bill. This occurs in relation to the minimum funding requirement; in the definition of cash equivalent transfer values; in the calculation of preferential liabilities on scheme wind-up; in assignment and loss; and in alterations to scheme rules. So the definition needs to be able to encompass all rights under the terms of a pension scheme to which a person would have been entitled on a given date had pensionable service terminated on that date. Such rights will include contingent benefits such as ill-health benefits and widow's benefits, but not discretionary benefits. I do not think that the amendment deals with all those matters.

We recognise how important it is to get an accurate and all-embracing definition. We want to get it right, and to this end we have invited various pensions organisations with the right expertise to help us. They include the Association of Pension Lawyers, the Association of British Insurers, the Society of Pension Consultants, the Institute of Actuaries, the Faculty of Actuaries and the National Association of Pension Funds, who together make up the Occupational Pension Scheme Joint Working Group. They all have day-to-day experience of dealing with these matters, and I am sure that they have a valuable contribution to make. We shall of course carefully consider any suggestions that they put forward. I hope that we can then introduce a suitable government amendment in another place which will give the required definition.

While I am grateful to my noble friend for his helpful amendment, I hope that he will feel able to withdraw it on the understanding that we have to put forward our own amendment for consideration once we have completed the consultations that I have mentioned.


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